Air France has denied that plans to expand its Transavia low-cost airline have been dropped following a 10-day strike by its pilots, reports BBC News.
The country's transport secretary, Alain Vidalies, had told RMC radio that "the Transavia Europe project has been abandoned by management".
But Air France said the announcement was "premature", and that it had only proposed to suspend the scheme.
The strike has been costing the airline up to 15m euros (£11.8m) a day.
The dispute is over local employment terms, which can be less generous at European hubs than at core Air France operations.
On Tuesday, Air France said it expected to operate just 46% of its flights on Wednesday as a result of the strike, in which over half of its pilots are involved.
The budget airline Transavia, owned by Air France KLM, currently operates a fleet of 30 planes and carried 6.5 million passengers in 2013.
Air France had been planning to expand the brand, and move some Air France jobs to the revamped airline.
Earlier this month, Air France announced its intention to more than double the number of passengers carried on Transavia by 2017, and expand its operations outside France.
On Monday, Air France offered to freeze plans to expand the budget airline, but the pilots' union SNPL rejected the offer, describing the move as a "smokescreen".
Read more of this report from BBC News.