IAG's Willie Walsh has beaten Michael O'Leary in the race to launch a low-cost transatlantic air service, something the Ryanair boss has long plotted but never got airborne.
Aer Lingus owner IAG, headed by Willie Walsh, will begin offering cut-price inter-continental flights from June using a new airline to be branded "Level" that could operate more than 30 aircraft.
This year Mr Walsh said a decision had been taken not to use the Aer Lingus brand for the service, in part because it's less well known outside Ireland.
IAG's startup airline will initially fly from Barcelona, with routes to Los Angeles and Oakland in California, the Argentinian capital Buenos Aires, and Punta Cana in the Dominican Republic.
Prices will start from €99 each way. The plan is to add other European bases and Level could also serve Asia, IAG said.
Level will start with two Airbus A330 wide-body jets operated by IAG's Iberia unit, but an order for new planes will be placed next year and the brand will become a separate operation, Mr Walsh said at a media briefing.
IAG is following Lufthansa and Air France-KLM in adding low-cost long-haul flights in response to an emerging challenge led by Norwegian Air Shuttle - which will begin low cost flights from Ireland to the US this summer.
In 2015 Ryanair shelved its transatlatic plans, but only after chief executive Michael O'Leary had said several times that the group was exploring the possibility of a launching US routes through a separate company.
The new IAG division is being founded in Barcelona in order to tap connections provided by the group's short-haul budget airline Vueling, which is based there. Willie Walsh said that feeder traffic is vital for the model to work, with Spanish productivity improvements also an important factor.
Level will have its own livery and offer 293 economy seats plus 21 premium-economy berths.
The cheapest tickets will allow one free cabin bag, with an extra charge for checked luggage, food and Wi-Fi. (Additional reporting agencies)