Air France has bought out Irish-based airline CityJet, completing its takeover of the company. No figures have been disclosed but it is understood that Air France paid Air Foyle approximately £1.5 million (€1.9 million) for the 66 per cent stake.

CityJet now becomes a subsidiary of Air France, but intends to continue operating its flights from Dublin to London City Airport and from Dublin to Malaga. It also operates several routes from Paris to London and other European cities for Air France.

Air France, which last year took a 25 per cent stake in the company, will recapitalise it and make further investments, according to CityJet's founder and chief executive, Mr Pat Byrne. He would not reveal the purchase price.

Mr Byrne, who is relinquishing his post as chief executive, will remain as chairman. He said last night that he was very pleased with the deal, adding that he believed Air France was the right partner for the company.

In a statement, Mr Bruno Matheu, senior vice-president, Network Management, Air France, said the move was in keeping with its strategy of developing traffic to its hub at Paris - at an affordable cost. "It is our intention that CityJet will remain an Irish-based and licensed airline and we are confident that this Irish/French mix is one which will continue to find favour with our passengers throughout Europe," he said.

Air Foyle, a private company, which is involved mainly in cargo transport, paid £4 million last year for a 50.1 per cent stake. As part of the deal, Air France provided a £2 million loan to CityJet, in return for a 25 per cent stake. The remaining 25 per cent was to be sold in a private placing, according to Mr Byrne, but this never occurred. Other existing shareholders, including private shareholders did not buy new shares and the 25 per cent shareholding reverted to Air France and CityJet, he said.

CityJet has had a very troubled history since its foundation seven years ago. It went into examinership three years ago with losses of £13 million and debts of £8.4 million. Creditors agreed to write off £6 million and the company was refinanced, with a £4 million cash injection.

Mr Byrne said he lost around £500,000 in the venture. Over the years his shareholding has been diluted from 15 per cent to zero. He said he was determined to stay with the venture "until the ship had been put in a safe harbour".

CityJet now has an annual turnover approaching £48 million and currently employs 320 people, according to Mr Byrne. He said the airline was still losing money, but was now on course to make a profit in the year from April next.

Meanwhile, CityJet is still awaiting word from the Competition Authority regarding a complaint it made about Aer Lingus which introduced its own service on the Dublin-London City Airport route in November. CityJet claimed the State airline was abusing a dominant position and trying to force it off the route by scheduling its flight times within a few minutes of those of CityJet.

The allegation, which has been rejected by Aer Lingus, is still under investigation, according to Mr Byrne.