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Thursday, 6 February, 2003, 09:49 GMT
French airline bail-out fails
Air Lib jet
Air Lib flights have been grounded indefinitely
Talks to save the second largest airline in France Air Lib have collapsed.

Its licence to fly has expired and passengers have been left stranded.

The only potential rescuer, Dutch investment group Imca, pulled out of the deal blaming plane maker Airbus for not offering a special rate on 29 new aircraft.

"The government...deplores the fact that the negotiations could not be concluded despite all the efforts that it has made for months, and that were pursued until late in the night," the French travel ministry said in a statement.

Alternative travel arrangements are being organised by the government and Air France to help stranded passengers around the world.

Air Lib used to be part-owned by the bankrupt Swissair, which pulled out in July 2001.

Swissair's failure to pay an agreed exit fee of 1.3bn French francs ($174m; 122m) were the beginning of the airline's current troubles.

Airbus blamed

Air Lib, formerly known as AOM/Air Liberte, can no longer fly after its operating licence expired on Wednesday.

Imca had planned to relaunch the airline and repay the 120m euros (79m; $130m) it owes the French government and the European Development Fund.

But the plan was contingent on being able to purchase 29 Airbus A319 planes for the same price paid by UK-based low-cost airline Easyjet for 120 planes.

No announcement has been made regarding the airlines 3,200 employees.

The government said their future is the responsibility of the company directors and commercial court.

Air Lib flew to the French Antilles, Algeria, Cuba and to destinations in Europe and France.

See also:

14 Jan 03 | Business
21 Jan 02 | Media reports
05 Oct 01 | Business
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