Last year BA pumped pounds 195m into the struggling airline. It received preference shares that could be converted into USAir shares at dollars 19.50.
But USAir has steadily lost altitude. This week the shares dived below dollars 7, prompting the fear that the world's favourite airline will have to write down its investment in its next results, covering the year to end-March.
BA, which has the option of investing a further pounds 290m in USAir over the next five years, sees the American link, which gives it unrivalled access to US airports, as a crucial part of its bid to become the biggest global carrier.
The airline is due to announce its results next month. Before any distortion caused by the US link profits are expected to emerge at pounds 300m against pounds 185m.
The shares drifted 3p to 416p. There was extensive option activity with 648 calls and 626 puts registered.
The rest of the stock market also fretted about transatlantic developments.
The surprising tightening of US monetary policy, which demoralised shares on Monday, continued to create unease and in volatile trading the FT-SE 100 index swung from a gain of 7.3 points to a fall of 24.5, ending 10.2 down at 3,128.
Government stocks recovered from falls of up to half a point, ending up to pounds 3 8 higher. The Bank of England announced a pounds 2bn auction, lower than many expected, next week.
Some chunky lines of stock came on offer. Most were absorbed comfortably but some were withdrawn because they were unable to command the desired price. Cazenove did, however, easily get away five million shares in RTZ, the resources group. They were placed at 830p with institutions. The price fell 15p to 835p.
Amstrad, the electronics group, was another actively traded with UBS said to be involved. The shares fell 2.75p to 32.25p.
Ashanti, the Ghanaian goldfield, made the expected impressive debut, closing at dollars 20.75 after touching dollars 21. Lonrho, with a 43 per cent interest, held at 154p.
Rolls-Royce rose 7p to 193p as securities houses turned supportive. Smith New Cout was one to rate the shares a buy. United Technologies, the US group owning the Pratt & Whitney aero engine group, created the excitement by reporting a 66 per cent income increase.
But British Aerospace, still unsettled by the interest of foreign shareholders, dipped 11p to 471p. The overseas stake has been cut to just below the 29.5 per cent ceiling. But until the restriction is eased the market fears more forced sales.
Asda, the supermarket chain, fell 1.75p to 56.25p as Hoare Govett increased the sector gloom by sharply cutting its profit forecasts. It has chopped its estimate for the year ending this month by pounds 20m to pounds 165m. Next year's figures have also been reduced.
NatWest Securities caution also ruffled the supermarkets, with with J Sainsbury down 6p to 359p and Tesco 1.5p to 212p.
SG Warburg, the investment group, was a casualty of a downgrading by rival Barclays de Zoete Wedd. It has cut pounds 25m from its forecast, which now stands at pounds 295m. Warburg fell 14p to 238p.
Johnson Fry, the financial group, fell 33p (after 38p) to 250p on continuing disappointment with its figures, announced on Monday.
Eastern Electricity was particularly weak in a dull sector. The shares fell 16p to 640p as the support of the company's buy-back programme was removed.
Glaxo Holdings steadied, up 6p at 664p, as Smith said buy and Societe Generale Strauss Turnbull put out hold advice. SGST is looking for profits this year of pounds 1.96bn with pounds 2.04bn next.
London International Group fell 8p to 121p following its rationalisation programme which, it admits, will make a refinancing necessary.
TI Group slipped 3p to 414p. Investment presentations ae scheduled for tomorrow.
Associated British Foods remained weak on talk it may only receive pounds 10m for its Baker's Oven retail arm. There had been talk of pounds 50m. The shares fell 12p to 584p.
Boddington, the pubs group, rose 5p to 265p on Hoare Govett support but Greene King, the East Anglian brewer, weakened 11p to 479p.
The FT-SE 100 index ended another volatile session down 10.2 points at 3,128; the FT-SE 250 index was lowered 8.1 to 3,805.9. Turnover was 769.5 million shares with 26,328 bargains. The account ends on Friday with settlement on 3 May.
George Weston Holdings, one of the private companies of the Weston family, which runs Associated British Foods, has slashed its interest in Clyde Petroleum. Hoare Govett, the company's broker, sold 30 million Clyde shares at 33p. George Weston now has 6.86 per cent. There was heavy trading in Clyde last week with rumours of US selling. The price held at 36p.
Upton & Southern, the ambitious but lossmaking stores group which has taken over the Reject Shop chain for pounds 2.3m and raised pounds 4.5m through a rights issue, is attracting heavyweight institutional support. Mercury Asset Management has disclosed a 14.81 per cent interest and two other institutional investors have reported share stakes. Upton shares held at 34p.
BLP, a wood laminates group, held at 145p as it started to escape the attentions of its own employee share ownership plan trust. The Takeover Panel decreed in 1992 that the trust must bid for BLP. It did at 26p a share, lifting its holding to 48 per cent. Yesterday it sold 750,000 shares at 142p and intends to sell more. Proceeds went to BLP, which loaned the trust the cash to buy.