A head to head battle between all business class carriers Eos Airlines and Silverjet is looming after the former announced plans to start rival services on the latter's two main routes.
Eos, the US-based carrier, said it would start daily services from London Stansted to Newark New York in May.
This would be followed by a daily service from London to Dubai starting in July.
Both routes are currently served by UK-based rival Silverjet.
The moves came as Silverjet said TFB (Mortgages), a property company run by the Reuben Brothers, would not be converting a £10m loan into an equity stake in the carrier at 60p per share.
The moves caused the shares in the Luton-based airline to fall to 17.5p on the London Stock Exchange on Tuesday afternoon.
Under the deal with David and Simon Reubens, who operate in the metals and property industries, Silverjet must pay back the £10m loan by December 2009.
TFB said: "Because of recent market conditions, we have decided not to exercise our right to convert our loan to Silverjet into equity.
"Instead we will continue to work with the company and monitor its performance going forward.” Lawrence Hunt, Silverjet's ceo, said: "We have a strong relationship with the Reuben brothers with whom we structured a loan of £10m, at highly attractive rates which are highly beneficial to our business; and we are also working together on a number of joint projects relating to the future development of Silverjet.
"As ever, our primary focus is to continue driving passenger numbers and yields, thereby restoring shareholder value.
"Based on bookings made to date, we are highly confident that our February load factor will exceed 60% at an increased yield. Forward bookings beyond February continue to be strong."
Eos said the Newark service would be in addition to the 44 flights a week its runs between Stansted and New York JFK.
It president and ceo Jack Williams, said passengers were "eagerly anticipating" this new route while the airline's many passengers from the Middle East were a "perfect fit" for the new Dubai service.
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