HUNDREDS of staff at Castle Donington airline BMI are facing an uncertain future after being told jobs will be axed if a deal to buy the business goes through.

Yesterday, it was announced that International Airlines Group, the owner of British Airways, had agreed a binding deal to buy BMI from Lufthansa for £172.5 million.

IAG chief executive Willie Walsh said that jobs would have to be axed at the troubled airline, which reported losses of £105 million in the first half of this year.

BMI employs more than 3,600 staff, 537 of whom are based at the airline's head office at Donington Hall.

Aviation expert John Strickland, director of JLS Consulting, said: "It is difficult to say how many jobs would go at BMI once the deal goes through.

"Mr Walsh has said he would like to keep high-quality jobs, so I imagine this would include staff such as pilots and engineers.

"But cabin crew and customer service staff may be more vulnerable."

Mr Walsh said: "Given the scale of BMI's losses, there is an urgent need to restructure the business.

"Unfortunately, this will mean some job losses but we will secure a significant number of high-quality jobs here in the UK and create similar new jobs in the future."

Mr Walsh could not confirm how many jobs would go at BMI but said fewer posts would be lost than if the airline had been closed.

Mr Walsh said the BMI brand could continue to exist or could be integrated into British Airways.

A question mark also hangs over two other BMI businesses – BMI Baby and BMI Regional.

BMI Baby, which is also based at Castle Donington, is one of the largest operators at East Midlands Airport, with more than 30 routes.

The low-cost airline also operates out of Birmingham.

BMI Regional offers short-haul flights from East Midlands, Aberdeen, Edinburgh, Glasgow, Leeds Bradford and Manchester.

Lufthansa has the option to sell both businesses before the IAG deal is completed.

If Lufthansa does not sell BMI Baby before the deal is completed, IAG said the price it would pay would be subject to a "significant" reduction.

The takeover, which is subject to regulatory clearance, should go through within the next three months.

IAG, which also owns Spanish airline Iberia, has been keen to acquire more take-off and landing slots at Heathrow. BMI has 56 slots at the London airport, operating flights to Europe, the Middle East and Africa.

If the deal goes through, IAG will own more than 53% of the slots at Heathrow.

Rival airline Virgin, which also spoke to Lufthansa about acquiring BMI, plans to ask the competition authorities to block the deal.

It has expressed concern over IAG's dominant position at Heathrow.

In a statement, chairman Sir Richard Branson said: "BA is already dominant at Heathrow and their removal of BMI just tightens their stranglehold at the world's busiest international airport."

A spokesman for Virgin said: "We will be asking the competition authorities to stop this deal and to protect the many millions of passengers on routes where BA and BMI currently compete.

"With Heathrow sewn up, BA can use its monopoly power to force up prices at the expense of the consumer."