The fate of French private airline Air Lib will be sealed this week when the French government will decide whether to write off the troubled carrier's debts.

Last week the French secretary of state for transport, Dominique Bussereau, received the troubled airline's latest restructuring plan and said he would "give a definitive reply as quickly as possible".

Air Lib has undergone several ownership changes and reorganisations since acquisition by British Airways in 1996. It submitted the new plan just hours before the 9 January deadline to try to win government concessions to allow it to continue operations.

However, prospects do not look good, as Bussereau complained that the plan did not appear to include a significant investment from potential Dutch backer IMCA. This has been a problem before: the French government refuses to write off a €30 million ($31.2 million) bridging loan unless IMCA gives a firm commitment to invest. Bussereau says the government's aim "has been to ensure this company survives, but not under any conditions".

Air Lib says the new plan involves IMCA taking a 50% stake and buying several Airbus aircraft. It will require the French government to write off a c110 million debt. Erik de Vlieger, president of IMCA, says he has contacted Airbus about buying 29 A320s to add to Air Lib's A340s, Boeing MD-82s and MD-83s, and McDonnell Douglas DC-10s.

Source: Flight International