UPDATE 1-IAG picks Paris Orly as second base for low-cost carrier Level

* Airline to fly four routes from new Paris base

* Level to be profitable this year - CEO Walsh

* IAG could use Monarch’s Gatwick slots for expansion - analyst (Adds details, analyst comment)

LONDON, Nov 28 (Reuters) - IAG’s low-cost long-haul airline Level will base two aircraft at Paris Orly airport, the airline group said on Tuesday, its second base since launching this year, and analysts said that expansion into Gatwick may follow.

The new Paris base follows a strong start for the airline, which initially started operations in Barcelona to compete with the likes of Norwegian Air Shuttle and Wow Air in the growing low-cost transatlantic market.

“We’re delighted to launch flights from our second European city with four exciting new routes,” IAG Chief Executive Willie Walsh said in a statement.

Level will operate five aircraft in 2018, including two Airbus A330-200 aircraft based at Orly flying to Montreal, New York, Guadeloupe and Martinique from next July. One-way fares will start from 99 euros ($118).

Level flights from Paris Orly will be operated by staff who currently work for OpenSkies, IAG’s French airline, which will cease to operate at the end of next summer. OpenSkies staff will then solely operate Level flights.

Walsh said he expects Barcelona-based Level to be profitable this year, and has previously said that the airline’s fleet will reach 30 by 2022, meaning that further bases are likely to follow.

IAG is close to securing Monarch’s airport slots at London’s Gatwick airport, it said late on Monday, after the holiday-flight operator collapsed in October.

Analysts at Goodbody said that the slots could be used for further Level expansion, which could help it compete with Norwegian. Earlier this year Norwegian signed an agreement with easyJet to allow passengers to connect more easily onto their long-haul flights at Gatwick.

“To date (IAG) has been taking the fight to Norwegian at Gatwick using its BA brand... Level could offer an alternative brand in this battle,” the Goodbody analysts said in a note.

“IAG would be substantially strengthening its hand by further segmenting its offering on North Atlantic routes out of Gatwick, with this seen as potentially posing a serious challenge to Norwegian long-haul ambitions.”

IAG also said that Level would start a new route from Barcelona to Boston in March.

IAG also owns British Airways, Vueling, Iberia and Aer Lingus.

$1 = 0.8417 euros Reporting by Alistair Smout; editing by Jason Neely and Adrian Croft