THE investment bank called in to help with the potential sale of Castle Donington-based airline BMI has begun work.

German air operator Lufthansa owns BMI and has confirmed it is considering selling all or part of the business after it made losses of £105 million in the first half of this year.

It is understood that Lufthansa has called in New York-based investment bank Morgan Stanley to help with any potential sales.

And a source has told the Derby Telegraph that the bank is behind the sale of six of BMI's take-off and landing slots at Heathrow to International Airlines Group (IAG).

It is not yet known how any of this could affect the 527 people BMI employs at its Donington Hall head office.

Top aviation expert John Strickland, of JLS Consulting, formerly employed by British Midland Airways and British Airways, said Morgan Stanley would have been employed to make sure Lufthansa "get the optimum financial result".

He said: "They would be advising on major acquisition activities, giving assistance with negotiations and looking at different financial options."

Mr Strickland said he felt the process of dealing with BMI and its subsidiary BMI Baby, which flies from East Midlands Airport, would move "quickly over the next few months".

Lufthansa would not confirm that it was using Morgan Stanley but a spokesman said: "We are exploring different options regarding BMI.

"We have brought in different companies to advise us on those options."

He added: "It's our policy not to comment on anything that has not been decided on so as not to promote further speculation."

Mr Strickland said Lufthansa were in a difficult position when it came to talking about the possible sale.

He said: "They would regard it as unhelpful to them and their workforce to be issuing frequent messages."

A BMI spokeswoman said any questions about the issue should be put to Lufthansa.

In August, the firm said it expected a return to profitability in the "medium term".