Air France has said it is suspending until December its
plan to develop its budget carrier, Transavia, in an effort to end a pilots'
strike over the move.
The decision was announced by the airline's boss, Alexandre de Juniac, as
the dispute entered its eighth day.
The strike is the airline's longest since 1998 and has been costing the firm
15m euros (£11.8m; $19.3m) a day.
Mr de Juniac said the aim was to allow time for "a thorough
dialogue" and provide guarantees for unions.
He told Le Monde newspaper the strike was "disastrous" for the
airline.
But he added: "This arrangement must not call into question our
ambition to develop Transavia, which is one of the key sources of growth for
the Air France-KLM group."
On Sunday, France's Transport Minister Alain Vidalies said the fate of Air
France was "at stake" in the dispute.
Pilots are protesting over the firm's plan to expand Transavia because they
fear it will drive down their wages.
"There must be a positive approach in this situation, otherwise I think
that it's the fate of the company that could be at stake," Mr Vidalies
told France Info radio.
"The low-cost [sector] is not a choice, it's an obligatory move, that's
reality. I think pilots are fully aware of this," he said.
On Monday, Air France expects to operate 41% of its flights.
On Sunday, the pilots' union, the SNPL, called on the French government to
intervene and help resolve the dispute.
"Talks have reached a complete impasse," the SNPL said in a
statement. "Management is playing for time, waiting for the movement to
weaken."
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