Bmibaby is to cut its fleet of 17 aircraft to 12 in 2010, with the possible loss of 158 jobs.
The company said the move comes against a background of the worst economic recession and record losses in the aviation industry.
The airline said 54 pilots and 82 cabin crew positions at Birmingham, Manchester and Cardiff Airports are at risk of redundancy, plus an additional 22 management and support positions at bmibaby’s head office and airport bases.
Bmibaby said it has commenced discussions with staff and union representatives.
It said it is introducing a restructuring programme that will focus “activities and efforts on routes where there are clear indications and prospects for future growth and development”.
As a result of the restructuring programme there will be an increase in the capacity to the destinations it serves from East Midlands and the creation of 10 new pilot and 15 cabin crew positions.
bmibaby managing director Crawford Rix said: “Since the launch of bmibaby we have established ourselves as a leading player in the low cost airline market. However 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.”