Budget airline BMI Baby will be grounded as of September, its owner IAG has admitted.
IAG, which also owns British Airways, bought BMI from Lufthansa in April, is said to be putting as many as 800 jobs at risk as it seeks to jettison the parts of BMI it does not want.
IAG previously indicated that neither BMI Baby nor BMI Regional would be part of IAG's long-term plans for the airline.
BMI Baby, which has been losing an average of £25m a year, is still open to offers from outside parties, although such an option is believed to be unlikely to occur.
In a letter to his staff, BMI Interim Managing Director Peter Simpson said: "BMI Baby has delivered high levels of operational performance and customer service, but has continued to struggle financially, losing more than £100m in the last four years."
"To help stem losses as quickly as possible, and as a preliminary measure, we will be making reductions to BMI Baby's flying programme from June. We sincerely apologise to all customers affected and will be providing full refunds and doing all we can with other airlines to mitigate the impact of these changes."
In a statement released on May 4th, the firm said: "Progress has been made with a potential buyer for bmi Regional, but so far this has not been possible for bmibaby, despite attempts over many months by both Lufthansa and IAG. Therefore, yesterday, bmibaby started consultation to look at future options including, subject to that consultation, a proposal to close in September this year."
Some flights will be grounded from June, with the final flight taking place on September 9th 2012.
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