Bmibaby is set to be sold to new German owners rather than to British Airways as part of the sale of its parent, bmi.
The budget arm of bmi, which is currently owned, with its legacy airline sibling, by Germany's Lufthansa, is expected to be snapped up by the German turnaround business Intro Aviation, the latter's chief executive said.
That will trigger bartering over the final sale price of bmi: when BA's owner International Consolidated Airlines Group announced its £172m acquisition of its smaller rival, it said if Lufthansa sold off bmibaby, the final price would be "significantly" lower.
"We have expressed our interest and the whole procedure is now beginning," Intro's boss Peter Oncken told Bloomberg. "The books are being opened and we are looking at the business in detail. We will see if it can be restructured."
Intro Aviation has previously bought and turned around former British Airways unit Deutsche BA and Germany's LTU.
Bmi last night said that other parties are also still interested in the low-cost arm.