International Airlines Group (IAG) and Deutsche Lufthansa last week reached an agreement in principle for the sale of British Midland to IAG.

The sale and closing of the deal remain subject to conditions including a binding purchase agreement, further due diligence and regulatory clearances. It is envisaged that the purchase agreement will be signed in the coming weeks and the aim is for the transaction to be completed in the first quarter of 2012.

Financial details of the agreement were not disclosed.

If IAG clinches the takeover it will increase its share of Heathrow takeoff and landing slots from about 45 percent to 53 percent.

Virgin Atlantic immediately raised concerns about the deal between BA’s parent IAG and bmi owner Lufthansa.

Virgin Atlantic says it also remains in the running to take over the loss-making Heathrow carrier.

The airline’s chief executive Steve Ridgway told The Sunday Telegraph that Virgin Atlantic has been assured by Lufthansa that the sale process is far from sealed.

Ridgway said that IAG will have a “massive competition mountain” to climb if it is to be successful in its bid for BMI.

“With government limiting growth at London Heathrow, they cannot afford to turn a blind eye to the deterioration of competition that would result from a BA purchase of BMI,” Ridgeway said in a statement.

Meanwhile, IAG chief executive, Willie Walsh, has said that he is confident of securing approval for the BMI acquisition from regulators in the UK and Brussels. He argues that Air France-KLM is already allowed to control 59 percent of slots at the Charles de Gaulle airport in Paris and 57 percent of slots at the Schiphol airport in Amsterdam, reported telegraph.co.uk .