The owner of British Airways, International Consolidated Airlines, on Thursday beat competitor Virgin Atlantic in the takeover battle for BMI, Deutsche Lufthansa’s loss-making airline.

IAG agreed to buy BMI for €206.8m in cash, but may end up paying less if Lufthansa fails to sell its small regional subsidiaries before the completion date. 

CEO of IAG, Willie Walsh, said: “Buying BMI’s mainline business gives IAG a unique opportunity to grow at Heathrow, one of our key hub airports.” Walsh added there will be job cuts in an effort to stem losses at BMI.

Reports suggest the sale will be completed in the first three months of 2012. 

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