Air France has branded claims it has abandoned plans to shelves the expansion of low-cost carrier Transavia “premature”.
French transport secretary Alain Vidalies told RMC radio earlier: “The Transavia Europe project has been abandoned by management.”
However, this has been dismissed by the airline.
The confusion comes against a background of continuing strike action at the carrier, with pilots now in the tenth day of a walkout in protest against the plans.
Pilots are concerned new recruits at the low-cost carrier would be forced to take inferior conditions, eroding their position at the long-haul carrier in the long-term.
The strike has been costing the airline up to £12 a day.
On Tuesday, Air France said it expected to operate just 46 per cent 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.