“We have introduced new measures to address the profitability issue and we’re confident that their financial performance will be line with the business plan from spring 2013,” the spokesperson says.

“A full review of their performance is scheduled for September and we will assess the situation at that moment,” the spokesperson adds.

These new measures include capacity adjustments and changes to revenue management to increase yields, and will cover fuel costs, which are €60 million ($79 million) higher than initially budgeted because of rising prices.

Staff and aircraft productivity at the three provincial bases has increased 15-30%, as targeted, and passenger numbers in 2012 increased 1 million year-on-year, according to Air France.

Air France also is restructuring its domestic regional airlines, and will fold Airlinair, Brit Air and Regional into one entity with one CEO, Lionel Guerin.

Details of the new organization will be released at the end of the month.

Air France will increase its stake in Airlinair as part of the restructuring of its French regional operation. “It is a probable scenario that Air France will acquire full ownership of Airlinair,” an Air France source tells Aviation Week. Paris Orly-based Airlinair operates 24 ATR 42/72 turboprops.

Currently Air France’s wholly owned subsidiary Brit Air holds 39.86% of Airlinair and 60.14% is held by Financiere Linair, the company controlled by Lionel Guerin, who founded the airline in 1998.