Air France-KLM Group Chief Executive Officer Alexandre de Juniac said the carrier may be forced to scrap a plan to expand its low-cost Transavia unit as it fails to quell the worst pilot strike since 1998.

“If we’re not able to reach an agreement we’ll be forced, with a heavy heart, to withdraw the project,” de Juniac said, speaking on France Inter radio today about the plan to beef up Transavia to 100 planes by 2017. “It’s a pity.”

The main pilot union yesterday rejected the CEO’s offer to delay an expansion of Transavia as a “smokescreen” and called on members to demonstrate near parliament at 2:30 p.m. today. French Prime Minister Manuel Valls has called for an end to the labor action, saying “it is not understood by the French.”

Air France management yesterday said that they were prepared to curtail the expansion of low-cost unit outside France and the Netherlands until the end of the year. About 60 percent of Air France pilots have been off the job since last Monday, causing an operating loss of as much as 20 million euros ($25.7 million) a day.

Support for strike action is not waning even after eight days of walk-outs, the SNPL said. In a statement the eight labor union representing pilots, cabin grew and ground staff called on the government to take “all the necessary steps to put a stop to the dismantling” of Air France.

One Year In

Pilots are concerned that growth at Transavia could lead to a transfer of routes from Air France itself, mirroring a process at rival Deutsche Lufthansa AG, which is shifting flights to its Germanwings discount unit.

De Juniac, CEO for the past year, had previously said that with expenses at Transavia France still not low enough, a more competitive arm might need be established elsewhere in order to end short-haul losses and fend off the challenge of discount carriers such as EasyJet Plc.

The cost difference between a Transavia and regular Air France flight is 27 percent, according to de Juniac. While postponing growth plans for Transavia Europe, Air France demanded that pilots agree to accelerate the growth of the discount unit within France beyond the jets it operates today.

To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net. To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net. 

Photo Credit: A Transavia plane in Paris. Transavia