The scramble for precious slots at London Heathrow Airport has spurred a bidding war for struggling UK carrier BMI. Virgin Atlantic Airways has told Lufthansa, BMI’s owner, that it will be able to close the deal more quickly than the International Airlines Group (IAG), which launched a bid for BMI in November. IAG is the holding company for the merged British Airways and Iberia.

Opponents of the IAG bid argue that BA already controls too many Heathrow slots and this issue could see it challenged, and even blocked, by anti-trust authorities in the UK. So while IAG’s larger balance sheet would suggest that it might be offering more cash to the German flagcarrier for BMI, the Virgin counterbid might win out on the grounds that it would clear the antitrust issues more smoothly.

Whoever takes over BMI will need to deal with losses, which for the first nine months of 2011 totaled just over $200 million. Still to be resolved is whether the successful bidder would also have to shoulder BMI pension fund liabilities of approximately $280 million.

Lufthansa has indicated that it would like to complete the sale of BMI during the first quarter of 2012. However, according to financial analysts, the bidders may be content to let the matter drag on during the generally slow winter season, rather than have further losses on their books.

The question of how UK anti-trust authorities may view the question of which carrier ends up with BMI’s Heathrow slots will likely be viewed in the context of the European Commission’s plans to allow slot trading and impose a “use-them-or-loose-them” policy under its new Airports Package.

BMI, which is part of the Star Alliance, currently operates 48 routes in the UK, Europe, Central Asia and Africa and employs 3,604 people. Its 44-strong fleet includes aircraft ranging in size from the Embraer ERJ-135 to the Airbus A330-200.