Ambitions for a pan-European low-cost carrier persist at Air France-KLM, despite the group having abandoned its plan to build up its Transavia subsidiary as a budget airline with bases outside France and the Netherlands.

That proposal was dropped after it ignited a two-week strike by Air France pilots in September. Instead, Transavia France will be expanded and, from its Paris Orly base, will serve European routes previously operated by Air France. Meanwhile, Transavia's Dutch arm is shifting focus from charter to scheduled flights at Amsterdam.

Transavia will be playing in a "different league" to thoroughbred low-cost carriers such as EasyJet and Ryanair which operate throughout Europe with bases across the continent, said Air France-KLM finance chief Pierre-Francois Riolacci during a results briefing today.

But he says Air France-KLM will return to its objective of gaining a foothold in pan-European low-cost operations at a later stage. "Unfortunately, we have been delayed [by the opposition of Air France]," he says.

While he insists that there are "no plans on the back-burner today", Riolacci sees partnership with a budget carrier as an "idea". Co-operation under a joint venture structure could be "very efficient", he adds.

Scrapping of Transavia's pan-European expansion plans has freed up investments worth "several hundred million" which had been been allocated to that project, says Riolacci. These funds will now provide the group with "fresh air" for cost-cutting initiatives in 2015, he says.

Air France-KLM has plans to expand Transavia France's fleet from 16 Boeing 737s for summer 2015 to 21 aircraft the following summer. By 2019, the fleet is to reach 37 aircraft and operate from all French airports except Air France's Charles de Gaulle hub.

However, the expansion plans depend on the approval by members of French pilot union SNPL. Air France-KLM reached the agreement with union leadership in early October.

If it is approved, Riolacci says the SNPL deal does not pose any limits on the potential expansion of Transavia.

Source: Cirium Dashboard