Prosecutors at the US department of justice have begun an investigation into possible collusion among the airlines to limit seating. The move comes just two years after the same department approved a wave of mergers, saying the combination would benefit consumers.

For the ninth consecutive month, U.S. airlines have improved their on-time performance and delivered the best-ever June baggage-handling results, Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, announced today.

Contractors have been told to stop work on critical airport modernisation projects around the United States after Congress failed to pass legislation giving the Federal Aviation Administration the authority for work to continue. Dozens of “stop work orders” have been issued for major projects designed to build and modernise control towers and other aviation infrastructure from coast to coast.

British Airways has said it is “pleased” with an agreement to pay $89.5m in settlement for a civil lawsuit in the US over fixing the price of air cargo. The deal follows an investigation by the Department of Justice into a breach of anti-trust rules within the air transport industry between 2000 and 2006.

President Barack Obama has unveiled a $50 billion programme to rebuild America’s roads, railways and airport runway. In a move that echoes Franklin Roosevelt’s “New Deal” that helped the States recover from the Great Depression, Obama is pinning hopes on initiative kickstarting the spluttering U.S. economy in the run-up to the mid-term elections in November.

The United States will hand over the first batch of four upgraded F-16s to Pakistan this week, giving the latter’s Air Force the capability to conduct night operations and use precision-guided munition in its operations against militants in the country’s northwest.