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Air France digs in on remains of low-cost plan, strike continues

PARIS (Reuters) – Air France-KLM sought on Friday to rescue what remains of its low-cost airline expansion plan and shore up its chief executive’s authority as a damaging strike by French pilots entered a twelfth day.

In a statement, Europe’s second-largest network carrier said a union demand that pilots hired by the low-cost arm Transavia should get full Air France pilot pay and conditions “totally opposes the principles of this model.”

“The board has confirmed that the company can only develop under economic conditions that are compatible with the low-cost model,” Air France said in a statement which noted management had the board’s “full support”.

Chief executive Alexandre de Juniac is under severe pressure to bring an end to the strike, which has grounded over half his company’s flights and is costing up to 20 million euros ($25.5 million a day.

He ceded ground this week, first postponing plans to have Transavia hubs outside France employing staff on local conditions, then, under public pressure from the government, abandoning those plans completely.

Pilots are still holding out for a single contract. Talks with the unions are due to resume on Friday afternoon, spokesmen from Air France and the main pilots’ union SNPL said on Friday.

The government is a 16 percent shareholder in the group and sits on the board. A transport ministry official declined on Friday to comment but referred back to a call made on Wednesday by Transport Minister Alain Vidalies for the strike to end.

(Reporting by Andrew Callus and Gregory Blachier; Editing by Mark John)

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