Julian Moxon/PARIS

The merger of French airlines AOM, Air Liberté and Air Littoral into a single carrier to compete with Air France has been delayed until the end of the year, as Paul Reutlinger, president designate, struggles to control costs and solve social and technical issues.

The October launch has been put off, indicating that the problems faced by Reutlinger and his team are more severe than first believed. He says the two shareholders, SAirGroup and Marine Wendel, have decided the three operations will almost certainly need recapitalisation. The airlines suffered significant losses last year and these are likely to continue this year because of high fuel prices and internal inefficiencies.

Reutlinger has made it clear that he plans to mount a major cost cutting programme and review fleet and route policy. Initial moves include a decision to split the three airlines' operations into a Paris-based regional and a southern France-based airline. All aircraft will, however, have the same colour scheme and operate under a new name, yet to be decided. Reutlinger says he is allowing three years to complete the restructuring.

Meanwhile, the French civil aviation authority, the DGAC, confirms it sent a letter to AOM in late August requiring the airline to put right "serious dysfunctions...regarding operating safety". The move, considered highly unusual, follows incidents during the summer involving excessive exhaust gas temperatures on the General Electric CF6-50 engines powering its ageing DC-10 fleet. This caused delays and flight cancellations at the busiest time of the year.

According to the DGAC, AOM has responded by increasing monitoring of all excess parameters and reducing readings of the quick access recorder, which collects major engine and airframe data, from 10 days to five. "We have accepted that," says the authority, adding "there is no question of any major safety issue."

Source: Flight International