Air France offers to scrap low-cost Transavia expansion plan

Air France has offered to scrap plans to expand its Transavia low-cost airline in Europe, in return for pilots returning to work immediately.

In a statement, it said the proposal would help "find an immediate outcome to this destructive conflict".

The company also offered "a renewed guarantee that there will be no relocation" of jobs.

Pilots have been on strike for 10 days and have grounded about half of the airline's flights.

They are unhappy at the lower rates of pay offered by the expanding budget operation compared with core Air France services, threatening to strike indefinitely unless the European expansion is scrapped.

The strike has been costing the airline up to 15m euros (£11.8m) a day.

Air France said it would instead develop its Transavia France project.

"Our Transavia project is a

100% pro-France project. It is about developing Transavia to encourage growth in France and quickly create more than 1,000 jobs in France (including 250 pilot jobs)," said the chief executives of Air France-KLM, Alexandre de Juniac, and Air France, Frederic Gagey in a joint statement.

"With the withdrawal of the Transavia Europe project, there is now no reason to strike because there are no longer any concerns about relocation.

"We therefore call on the striking pilots to return to work immediately," they said.

The union has yet to respond to the offer.

Air France pilots are protesting against a transfer of jobs by the airline to its low-cost European carrier

Earlier on Wednesday, Air France had said it expected to operate just 47% of its flights on Thursday as a result of the strike, in which over half of its pilots are involved.

The budget airline Transavia, owned by Air France KLM, currently operates a fleet of 30 planes and carried 6.5 million passengers in 2013.

Air France had been planning to expand the brand, and move some Air France jobs to the revamped airline.

Earlier this month, Air France announced its intention to more than double the number of passengers carried on Transavia by 2017, and expand its operations outside France.

On Monday, Air France offered to freeze plans to expand the budget airline, but the pilots' union SNPL rejected the offer, describing the move as a "smokescreen".

Air France's chief executive Alexandre de Juniac has said the strike is "disastrous" for the airline.

His warning was echoed by France's transport secretary Alain Vidalies, who said on Sunday that the fate of Air France was "at stake" in the dispute. The government has a 16% stake in the airline.

BBC Business