DHAKA: Air France has dropped plans to expand its Transavia low-cost airline, the government has said, following a week-long strike by its pilots.

The country's transport secretary, Alain Vidalies, told RMC radio that ‘the Transavia Europe project has been abandoned by management’, reports the BBC.

But Air France said it was ‘premature’ to announce that the Transavia project had been withdrawn.

The strike has been costing the airline up to 15m euros a day.

The dispute is over local employment terms, which can be less generous at European hubs than at core Air France operations.

BDST: 1415 HRS, SEP 24, 2014