German airline Lufthansa has sold its British unit BMI for 172.5 million pounds ($271 million) to International Airlines Group (IAG), the holding company for the merged British Airways and Iberia.
Both companies confirmed the sale in a press release Thursday morning.
It follows a battle for loss-making BMI with rival airline Virgin Atlantic, which entered talks with Lufthansa earlier this month.
This will mean that IAG will gain more than 50 new landing slots at Heathrow, the world’s third busiest airport.
Willie Walsh, IAG chief executive, confirmed that there will be some job losses at BMI following the purchase. IAG does not plan to use the divisions bmi regional and bmibaby, so
Lufthansa has the option to sell off either before completing the deal.
Walsh said: "Buying bmi's mainline business gives IAG a unique opportunity to grow at Heathrow, one of our key hub airports.
"Given the scale of bmi's losses, there is an urgent need to restructure the business. Unfortunately, this will mean some job losses.”
The deal should complete in the first quarter of 2012, subject to clearance from competition authorities.