The French government has extended Air Lib's licence to 31 January and given it until 9 January to repay a €90 million ($90.6 million) government loan. The reprieve comes despite France's civil aviation council, CSAM, recommending the licence not be renewed because of the airline's financial woes. Air Lib's licence was due to expire on 15 November.

The French transport minister's move came after Air Lib president Jean-Charles Corbet revealed the airline had found a potential investor in Erik De Vlieger, head of Dutch group Imca. Air Lib says De Vlieger "is looking to develop its air transport activities and is particularly interested in Air Lib Express" - the low-cost arm of Air Lib.

Imca, with an annual turnover of c400 million, has interests in Metropolis and KLM regional Air Exel. De Vlieger is considering splitting Air Lib from Air Lib Express to try to create Europe's third major low-cost airline.

But doubts linger over whether Air Lib can repay its debt to the government, which De Vlieger has stressed he will not do. Corbet, in an effort to show goodwill to the government, says he will lay off about 500 of Air Lib's 3,200 staff. Most of the cuts would be in the French West Indies, which are suffering an unprecedented slump in tourism, hitting Air Lib's routes to Guadeloupe and Martinique.

Source: Flight International