BMI to shed 600 more jobs as losses mount

Struggling airline BMI is to cut almost a seventh of its workforce and close its final salary pension scheme as it struggles to reduce its losses.

The airline, sold to the German carrier Lufthansa earlier this year, said it would cut around 600 jobs from its 4,500 workforce, as it suspends seven services operating out of Europe and nine aircraft from its fleet of 39 planes.

Flights to Brussels, Tel Aviv, Kiev and Aleppo will be suspended at the end of the year, and BMI plans to drop its service to Amsterdam from March. Flights to Palma and Venice which operated last summer will not do so again in 2010. BMI also plans to return two A330 aircraft it has leased, which suggests it is giving up its ambition, at least for now, to expand into the long-haul market. The closure of its pension scheme will affect 1,000 current members of the defined benefit plan.

The company, which has also recently announced 160 job losses at its low-fare operation bmibaby, said it would try to avoid compulsory redundancies, and blamed the economic slowdown for its problems. Airline analysts believe it could lose as much as £200m this year.

A spokesman for BMI said: "Once stabilised, the business can then be grown again in the years ahead when the economic environment improves and market demand justifies it."