Air France (AF, Paris CDG) has reached a provisional agreement with its largest pilot unions, Syndicat National des Pilotes de Ligne (SNPL France ALPA) and Syndicat des Pilotes d'Air France (SPAF), concerning the carrier's future plans for budget subsidiary, Transavia France (TO, Paris Orly).

Air France said last week that following intensive talks between company and union representatives, the framework for its planned budget regional European operations had been ironed out.

Among the most notable parts of the agreement are:

The limit of Transavia France's fleet will be extended from the current fourteen, as demanded by Air France pilots on the carrier's creation in 2007, to forty with effect from summer next year. Extending this limit will however require Air France, SPAF, and SNPL consensus.

Concerning the sensitive issue of pay grades and disparity between Air France and Transavia pilots, it was agreed that pilots flying for Transavia France are to be employed under Transavia France operating and remuneration conditions "to ensure the company’s competitiveness and its development as a complement to the Air France network".

"Two co-existing contracts (Transavia France and Air France) will be implemented for Air France pilots flying for Transavia France; These terms will provide pilots with dynamic and integrated career development, including a single seniority list, in response to high expectations on the part of pilots," a statement read.

In terms of pay, Transavia's salaries will be higher in a pilot's early career averaging EUR76'000 per annum gross for a beginner copilot, against EUR75'000 for one at Air France. However, the inequality is reversed later on with Transavia captains earning between EUR139'000 and EUR160'000 as compared to between EUR155'000 and EUR196'000 for a medium-haul Air France captain.

Air France management also agreed to drop a controversial clause from its pre-September strike announcement to the effect that Transavia, alongside Transavia Airlines (HV, Amsterdam Schiphol), would establish European bases using foreign subsidiaries. Pilots had expressed "grave concerns" about such a move which, they claimed, could lead to outsourcing.

Air France and Transavia will remain separate, individual operations with Transavia forbidden from operating out of Paris CDG and from offering long haul services. In addition, the agreement will allow for the duplication of services on 25 routes, with Air France operating from Paris CDG and Transavia from Paris Orly. The routes, however, are only guaranteed on condition Air France does not have to reduce frequencies on its existing operations. This applies mostly to European flights as well as to Algiers, Casablanca Int'l, and Moscow.

In the event that management and pilots reach another impasse resulting in a strike, no additional Air France flights with be operated on Transavia aircraft using AF flight numbers and vice versa. In effect, no Air France flight cancelled as a result of a strike can be offset by a Transavia flight.

Lastly, no other company in the Air France-KLM Royal Dutch Airlines stable, other than Air France and Transvia, may operate aircraft with 110+ seats from France. This in effect places a cap on the development of Air France's HOP! (France) (A5, Paris Orly) subsidiary.

The provisional accord is subject to ratification by the pilots at AGMs due to be held later next month.