Gol, the Brazilian low-cost airline, plans to relaunch the Varig brand as a dedicated business carrier serving domestic routes alongside its existing no-frills service.

The highly unusual move marks the first time a low-cost carrier has set up a dedicated subsidiary for premium traffic. Legacy airlines around the world – ranging from United and Lufthansa to All Nippon Airways – have created their own subsidiaries in recent years to stem the erosion of passengers to low-fare rivals.