Just weeks after its President Laurent Magnin announced his openness to partnering Air France (AF, Paris CDG), French leisure specialist XL Airways France (Paris CDG) has now been linked to a possible merger with another French operator, La Compagnie (B0, Paris Orly).

Quoting informed sources, La Tribune newspaper says exclusive talks are already underway over a deal which could see XL Airways buy La Compagnie, which would then be paid in XL Airways shares. Once completed, La Compagnie's owners (who have not been named) would gain control of XL Airways and its Héliades tour operator unit.

XL Airways had considered Air Austral (UU, St. Denis de la Réunion) as potential partner before settling on La Compagnie, the report said.

Neither side has commented on the talks.

The French press has speculated about the proposed tie-up given the two airlines operate in vastly different markets. For its part, La Compagnie operates VIP-configured B757-200s on transatlantic flights between France and the United States while XL Airways specializes in leisure/budget longhaul flights to the Caribbean, the United States, and the Indian Ocean using A330 widebodies.