Wolfgang Prock-Schauer, after just two days in charge at bmi, has already begun the restructuring process with the announcement of 158 job losses at the airline's low-cost operation. Bmibaby said today that 54 pilot and 82 cabin crew positions at Birmingham, Manchester and Cardiff airports would go. There would also be 22 management job losses.

The airline will consolidate its operations into East Midlands Airport and will expand the number of routes it operates from there. This will lead to 25 new jobs at the airport and staff at its other bases will be consulted on whether they want to move. Bmibaby's reduced presence at Birmingham, Manchester and Cardiff will result in its aircraft fleet shrinking from 17 to 12.

Lufthansa appointed Mr Prock-Schauer to turn around bmi, the former British Midland, after it took control of the struggling airline this year. Bmi lost £100 million last year and its losses this year could be twice that amount. Mr Prock-Schauer, the former head of India's Jet Airways, took over from Nigel Turner, the previous chief executive, on Monday.

Lufthansa has been considering a number of options for bmi this year including a potential sale. However, it has dropped those plans after it failed to generate sufficient interest in the loss-making carrier. Lufthansa now wants to restructure the airline before a possible sale next year.

One of the restructuring priorities has been bmibaby, which was founded in 2002 to offer low-cost flights from regional airports. Crawford Rix, managing director of bmibaby, said: “The aviation industry is facing its toughest time ever – it is experiencing record losses and remedial action has to be taken. bmibaby is no exception to this. We have to focus our efforts and activities on routes and services that we believe are the best fit for our business. We believe that having identified and by concentrating on the core business areas and reinforcing our efforts, we can ensure that bmibaby continues to provide its customers with the best possible competitive fares as well as an attractive range of business and leisure products.”

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