All of Air France's short-haul services will from next summer be operated by a new subsidiary called Hop Air France.
The move brings together staff from both Air France and its regional subsidiary Hop.
The resulting Hop Air France "structure" is designed to bring the group's short-haul routes back into profitability within three years.
Frédéric Gagey, Air France's chairman and CEO, said: "The short-haul activity is in competition with trains, cars, and low-cost airlines. We need to restructure our company to be even more responsive, market-oriented and close to our customers.
"Hop provides a response adapted to the specific characteristics of the short-haul carrier activity and the travel needs of our customers. I am counting on the efforts of all staff to achieve the ambitious targets for this business."
A statement from Air France said: "There will be no modification, transfer of employment contracts, or transfer of the teams based at Roissy or elsewhere in France."
In September, Air France offered to withdraw the roll-out of its low-cost subsidiary Transavia in Europe in a bid to end a two-week pilots' strike (see news, September 25).
The national carrier unveiled its Hop regional branding at the beginning of last year (see news, January 2013).