The French government says the country’s flag carrier Air France has buried plans to launch a Europe-wide low-cost subsidiary, which has been at the heart of a two-week strike.
“The Transavia Europe (budget airline) project has been abandoned by management,” France’s transport secretary, Alain Vidalies, said on Wednesday.
The airline, however, said it is still “premature” to say it has scrapped the plan.
“There is no change in the negotiations to suggest that this project has been withdrawn,” Air France spokesman Cedric Leurquin said later in the day.
The pilots’ strike has so far grounded thousands of Air France flights. According to the airline, the stoppage “has had disastrous consequences for customers, employees and the company’s finances.”
The pilots are outraged by lower payments proposed at Transavia compared with Air France’s mainline business.
The carrier has said its plans to run more Transavia flights at the expense of other Air France operations are part of attempts to regain ground in the European low-budget travel market already dominated by other airlines like Ryanair and EasyJet.
The pilots, however, say the carrier’s intention to base Transavia crews around Europe will lead to job losses in France.
They are concerned that the management could replace them with low-income pilots working for Transavia.