Air France has offered to withdraw the roll-out of its low-cost subsidiary Transavia in Europe, if its striking pilots return to work "immediately".
The airline has this week come under increasing pressure to resolve the industrial action that is costing it up to €15 million a day.
On Monday, the carrier's CEO Alexandre de Juniac offered to suspend the expansion of Transavia until December. He described that offer, which was instantly rejected by pilots' unions, as a "final proposal".
But now Air France has said it will undertake the "immediate withdrawal of the Transavia Europe project" and "the further development of Transavia France in competitive economic conditions and accompanied by the safeguards as discussed in the negotiations so far".
De Juniac said today: "Our Transavia project is a 100 per cent pro-France project. It is about developing Transavia to encourage growth in France and quickly create more than 1,000 jobs in France (including 250 pilot jobs).
"With the withdrawal of the Transavia Europe project, there is now no reason to strike because there are no longer any concerns about relocation.
"We therefore call on the striking pilots to return to work immediately."
The strike by Air France pilots is protesting plans to transfer jobs to Transavia.
France's transport minister Alain Vidalies said the strike could place the airline "at stake".