Virgin Atlantic boss Sir Richard Branson has warned that fares could rise and flights could be cut if the owner of British Airways takes over BMI.

He said the proposed takeover by International Airlines Group (IAG) would "take British flying back to the dark ages".

Virgin has submitted a formal complaint to the European Commission about IAG's plan to buy BMI, of Castle Donington, from Lufthansa for £172.5 million.

IAG is interested in BMI's 56 landing slots at Heathrow, the world's busiest airport.

As part of the deal, IAG has asked Lufthansa to sell its lower-cost company, Bmibaby, before the larger takeover is complete, by the end of March.

BMI employs 1,000 people in Leicestershire.

Virgin said if the takeover was approved, three key domestic routes – between Heathrow and Aberdeen, Edinburgh and Manchester – would become BA "monopoly routes".

The company said about two million domestic passengers would face price increases.

Sir Richard, the airline's president, said: "For years, pioneering airlines have fought to provide consumers with more choice and lower fares.

"This move will see BA unravel all of this progress."

IAG said it was confident regulatory authorities would approve the deal. It said: "BMI is a massively loss-making airline.

"Selling it to IAG offers the best solution for British consumers and UK plc, securing more jobs than if the airline was broken up and sold off for its Heathrow slots.

"This deal is the only option for safeguarding services to the UK regions."

IAG said there was "healthy competition" at Heathrow, with more than 80 airlines operating from the airport.