Lufthansa is buying a controlling stake in bmi, for a sum believed to be around £320 million.

The German carrier, which already owned 30% of the airline, is buying the 50.1% share owned by Sir Michael Bishop.

Analysts now expect Lufthansa to make a bid for the remaining 20%, currently owned by SAS.

The deal will see Lufthansa become the second largest airline operating out of London Heathrow, behind British Airways. Bmi controls 11% of landing and take-off slots at the airport.

Throughout its network, Bmi employs around 4,300 people, with a fleet of 54 aircraft on both scheduled and charter services, and flew 10.6 million passengers in 2007.

Lufthansa said it plans to complete the deal no earlier than January 12. It refused to confirm the amount it had paid for the extra 50% stake.

Speaking to analysts as the airline unveiled its third quarter results today, Lufthansa chairman and CEO Wolfgang Mayrhuber said: "Ahead of us lies a challenging and doubtlessly difficult time, which for various reasons can change the course of the entire industry as well as that of Lufthansa.

"We know that new challenges await us, daily. They only spur us on and we welcome them. We are equipped with a stable management, outstanding specialists and a service-oriented team, who work willingly and well with partners. That is Lufthansa attribute. "