The proposed tie-up between British Airways and American Airlines has hit a stumbling block after two senior US transport chief have been forced to rule themselves out of the decision-making process. Both the US transportation secretary and his deputy have stepped aside over the ruling whether to grant BA anti-trust immunity.

Qantas has become the latest airline to give a downbeat view of trading conditions despite being one of the few to post a profit – albeit small – for the first half of the year. The Australian flag carrier said the global outlook “remains uncertain” as it announced a fall in profits of 88% to £62.4 million. It follows numerous pieces of bad news for the aviation sector including a prediction by IATA that airlines are set to lose $11 billion this year.

British Airways has joined American Airlines and Qantas to try and save Japan Airlines from bankruptcy. The move follows news that Delta Airlines was also looking to inject cash into the ailing carrier and by doing so force it to exit the Oneworld Alliance, of which BA is a member.

American Airlines today announced it is adding a new service for passengers travelling between Manchester and New York (JFK). The new non-stop daily summer seasonal service is scheduled to begin operation on May 16th until September 30, 2010.

Travellers from the UAE now have greater access to the American market, following regulatory approval for a new codeshare agreement between the award-winning Etihad Airways and American Airlines. The agreement, which comes into effect this week, coincides with Etihad launching flights to Chicago on 2 September 2009.

American Airlines has reported deepening quarterly losses for the second consecutive year, as weak demand and falling fares drove sales sharply lower. Net quarterly losses, excluding non-recurring charges, sunk to $319m compared to a loss of $298m a year earlier. Group revenues in the second quarter fell 21 percent to $4.89bn and in the first six months by 18 percent to $9.7bn.