Air France resumes talks with pilots as strike deepens

The decision to pick up negotiations which hit an impasse earlier this week came as government urged a rapid solution to the longest strike in 16 years, which is costing Air France up to 20 million euros ($25 million) a day.

We must "find a solution in the coming hours", Prime Minister Manuel Valls said, warning the 10-day strike was endangering Air France, Europe's second-largest flag carrier.

As pressure mounted on management and unions to end the deadlock, confusion erupted after Transport Minister Alain Vidalies told French radio the airline had scrapped plans to expand its Transavia budget subsidiary.

"The Transavia Europe project has been abandoned by management," Vidalies told RMC radio.

But within minutes, an Air France spokesman told AFP it was "premature" to say the airline had buried the plans to develop its budget subsidiary, which it sees as vital to survive in the cut-throat world of low-cost aviation.

"There is no change in the negotiations to suggest that this project has been withdrawn," a spokesman told AFP.

"The proposal on the table remains to freeze this project and to begin a wide dialogue with social partners between now and the end of the year, as management announced on Monday," added the spokesman.

An Air France spokesman later confirmed a return to the negotiating table "to reach a rapid resolution to the conflict", without giving further details.

The pilots are striking in protest at the airline's plans to further develop Transavia, which currently serves holiday destinations across Europe and the Mediterranean.

The pilots, who can earn up to 250,000 euros a year, fear management will eventually seek to replace Air France flights with those operated by Transavia, where pilots earn considerably less.

"If abandoning or postponing the Transavia project allows for a solution to the crisis, it is the right solution," said Valls.

The confusion between the government and management of the airline -- which is nearly 16 percent state-owned -- appeared to mirror the disruption that has gripped air travellers in France for more than a week.

As in previous days, more than half of Air France flights were cancelled nationwide but the situation at some regional airports was much worse, with 80 and 70 percent of flights scrapped at the southern airports of Nice and Toulouse respectively.

However the strike was not universally supported. Hundreds of Air France employees rallied in front of company headquarters on Wednesday demanding that pilots get back to work.

"I don't understand the intention of my fellow pilots, I don't understand why they are striking against growth," said Jerome Cormouls, captain of an Airbus A320.

In what it described as a "last" offer to break the deadlock, as the strike stretched into a second week, management on Monday offered to put the Transavia project on hold until December.

But unions dismissed this as a "smoke screen" that would not protect jobs in France.

The strike is already the longest at the airline since 1998 and management warned it will have a major impact on profits.

Unions have threatened to extend the action until Friday if their demands are not met and pilots marched through Paris in uniform on Tuesday.

The government has called several times for the strike to be halted, with Valls previously warning that the image of France was at stake.