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Air France continues review of CityJet's future

Air France is no closer to a decision on its future strategy for Irish subsidiary CityJet, with the mainline carrier still considering a range of options - including divestment - for the loss-making regional operation.

Speaking on a third-quarter earnings call on 31 October, Phillipe Calavia, Air France-KLM chief financial officer, said CityJet is still not at break-even and had recorded a "slightly negative" operating result in the period ended 31 September.

CityJet will remain outside of Air France's new regional structure, which groups together its Brit Air and Regional brands. "We will see what its future will be within the group or not," Calavia says. "We have an ongoing process of reviewing the strategy and positioning of this Irish airline within the group."

Air France-KLM additionally took a €168 million write-down on the goodwill of VLM, the Dutch Fokker 50 operator purchased by CityJet in 2009.

Calavia, meanwhile, acknowledges the new regional division faces renewed competition in the French domestic market. He points to Spanish low-cost start up Volotea, which began operating from bases in Nantes and Bordeaux in June. "It is more of a challenge than an opportunity for us," says Calavia. "It is one of the challenges we face when we are building up our new regional organisation."

Volotea competes against Regional on routes to Lille and Strasbourg from Bordeaux, and Lille and Montpellier from Nantes.

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