Budget carrier XL Airways seeks rescue deal with Air France By Reuters

PARIS (Reuters) – French airline XL Airways has called on Air France (PA:) to discuss a rescue deal to avert the collapse of the budget carrier that halted ticket sales and payments last week.

XL Airways, which has said it needs 35 million euros ($38.6 million) in fresh financing, requested in a statement on Sunday a meeting with Air France and the French authorities in the coming hours before a court is expected to put it into receivership on Monday.

In an interview with Le Journal du Dimanche, also published on Sunday, XL Airways’ Chief Executive Laurent Mignan said his airline could become Air France’s low-cost offer on long-haul routes.

An Air France spokeswoman declined to comment.

Air France, France’s historic national carrier, is part of the Air France-KLM group.

XL Airways operated four Airbus A330 aircraft and provided mainly long-haul flights to the Caribbean, the United States and France’s Reunion island.

XL Airways’ woes follow similar issues at French airline Aigle Azur. Aigle Azur’s unfolding bankruptcy is the latest among smaller European airlines struggling to contend with higher fuel costs and stiff low-cost competition.

($1 = 0.9077 euros)

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