dropped its bid yesterday to acquire a multi-million dollar stake in USAir, according to airline and tourism officials.

However, they did not think the Island would suffer as a result of the offer being withdrawn -- provided USAir remained strong.

"A marriage between two big players in the Bermuda market would certainly have been a good thing,'' BA local manager Mr. Philip Troake said.

"The last thing Bermuda needs right now is another carrier going out of business. The two together would have created an even stronger presence in Bermuda.'' Mr. Troake declined to speculate on other possible benefits.

But Tourism Minister the Hon. CV (Jim) Woolridge said a BA-USAir merger would have given Bermuda's efforts to attract Eueropean visitors a boost by creating a new link with the continent.

USAir could have flown from Europe to Charlotte, North Carolina and then on to Bermuda, he said.

Mr. Woolridge agreed that the overriding benefit of a merger would have been the strengthening of USAir, which he said was "badly in need of refinancing''.

However, he noted there was still a possibility of BA coming up with a way to "prop up'' the airline.

BA officials stated yesterday they would explore other possible business combinations with USAir while USAir officials were confident the carrier would survive without the injection of BA's cash.

Mr. Troake said the only real losers as a result of the deal falling through were American travellers.

"They will continue to be subject to the pricing whims of the Big Three,'' he said. Delta, American and United -- all of whch serve Bermuda -- are considered the "Big Three'' American carriers.