Air France will convert subsidiary airline Transavia into a low-cost carrier, according to a report in La Tribune newspaper.
An announcement is expected to be made on October 4.
AF's plan would see it slim down its operations at Paris Orly in favour of handing over a number of routes to Transavia.
The move could reportedly happen as early as next year, although details of the routes in question are not yet available.
The size of the Transavia fleet will be almost tripled in size over the next five years to 30 B737-800s. At the same time, the Air France fleet at Orly will be cut by some ten aircraft.
Details of the routes in question are not yet available and it is unclear whether Air France will allow Transavia to compete with its core routes out of CDG.
But, notes La Tribune, there lies a rocky road ahead. Air France pilots who are transferred to Transavia will have to work harder for less money in line with LCC employment conditions.
In addition, Transavia currently contracts out its ground-handling operations to other companies, in order to keep costs as low as possible, and this practise will continue at Orly.
There would therefore be less work available to Air France staff at Orly and this will not sit well with the carrier's unionised workforce.
The news comes just days after a leaked report showed AF's trade unions had complained to the French prime minister about the threat to their jobs from foreign LCCs (see news, September 4).