It bothers us to read this - but the case seems straightforward. Even if the new law does not exclude EADS and NG's KC-45 from the competition, it is quite amazing to see Congress blatantly add an industrial component to the selection process. This is going to force the Pentagon's hands - no matter how they work it.

But, let's say that the Power8Plus decision leads to an A330 plant in Alabama - what then? EADS gets a factory set up in a $ cost environment. They get tax breaks from the state. This means production from such a plant is as American as Honda's Ohio minivans. EADS wins already because the world seems to want more A330s anyway. You can be sure that this thinking is going on inside EADS and Airbus with lots of cheering from their new friends in Mobile.

Meaning that the new law would be superfluous - like so many of them. Of course the Pentagon may select the KC-45 again anyway. Congress' xenophobes will throw their hissy fits. A taste of the Alitalia imbroglio comes to America. What a huge waste of time and money. The new tankers will arrive just in time to help the USAF bring back all their toys from far flung battles. Waste, waste and more waste.

In other news --

• Boris Johnson's smart move at City
• EADS 1H08 - wow
• USAF shakeup - what's up here?
• China's airline stall
• OpenSkies, the new SilverJet?
• WestJet triples profit

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Delta Air Lines does it again -- This story is too awful - take a look. Meanwhile you will be paying double for that second bag. Where does the madness end?

In other news --

• Forza Alitalia
• Lufthansa's strike starts to bite
• China discovers consumerism
• Labor trouble at Boeing
• Fuel costs hit Russia's airlines

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Anschluss again -- Lufthansa will meet bankers today to pick an adviser for the possible acquisition of a stake in Austrian Airlines, the daily newspaper Die Presse said today. Die Presse said Lufthansa's chief executive, Wolfgang Mayrhuber, an Austrian, has invited bankers to present their proposals for a Lufthansa move on the loss-making carrier controlled by Austria's government. The newspaper did not say where it got the information. Lufthansa declined to comment.

Austrian Airlines has hired The Boston Consulting Group to evaluate its options after it reckoned that rising fuel prices would lead to a net loss of up to €90m this year. Sources say BCG will recommend a partial sale to another airline and that it would find most advantage in a tie-up with Lufthansa, Aeroflot or Air France-KLM. We have been touting Lufthansa as the "natural" partner for months now. The report will be presented to Austrian Airline's supervisory board on Monday.

So the Germans move again, once more under the leadership of an Austrian. Odd coincidence nobody else is mentioning. And no we don't think there is any dark thing happening here - its just a coincidence.

In other news --

• Qantas incident
• Ratings agencies down on airlines, especially LCCs
• ATA wants access to SPR

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Might this be the world's best looking 767?

Picture credit: Aviation Partners Boeing It looks like this is the way the plane was always mean to look, doesn't it?

Take a look at this story and realize that the TSA provides many people in the media with a full time job these days. The agency is so poorly run, and has plainly the lowest cost, least competent people under employment. TSA always responds that since its been on the job, there have been no terrorism incidents.

Well maybe that's true - even terrorists have a limit to how much abuse they will tolerate it seems. Clearly any terror attack attempts on a US airport is easy to undertake. That these have not occurred is probably testimony to the FBI. But here we are, under the heavy handed, fumbling, groping and bumbling TSA. It really is outrageous.

Everywhere else in the travel industry, simplification is the new order. But here we have this monster, called DHS, that seems to grow incessantly. Nothing seems to be able to stop it. It has this huge budget and is in effect a giant "back box" where what goes on inside is hard to discern. So much for transparent government.

Pray that terrorists don't decide to test DHS. We know of nobody outside DHS that would be confident in its ability to thwart anything other than air travelers from getting through airport security.

In other news --

• Amazing Allegiant
• Now India slows down
• Mexicans cancel routes and flights
• EasyJet results

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United Airlines parent UAL said on Tuesday it reached an agreement in principle with a frequent flier miles partner and a credit card processor that will increase the airline's liquidity by $1.2bn. UAL agreed with its Mileage Plus co-branded bank card partner, Chase Bank USA, and Paymentech, one of its credit card processors, to extend the term of their agreements.

United Airlines will receive $600m from Chase related to the advance purchase of frequent flier miles and the extension of the contract. United also expects the transaction will improve cash flow by $200m in the next two years. The level of reserves that United is required to maintain under its credit card processing agreement with Chase and Paymentech has been reduced, resulting in the release of $350m in previously restricted cash, UAL said.

What UAL has not told us is how many miles it pre-sold to Chase and at what price. For example, it sold $600m worth of miles at 5 cents per mile or at 10 cents per mile - that makes a huge impact. Furthermore, how will it ensure Chase can get seats on flights for those miles? Since we know these issues you could assume so does Chase. The first impression here is that the banks are easing UAL's burden by reducing reserves; you would think they see UAL as less risk for default.

However, on balance you would also need to know more details about this deal. Its interesting the details that have come out so far are all from UAL - not the banks. We suspect that if the banks were to make an announcement of their version of the deal, it will sound rather different. The only sector of the US economy doing nearly as badly as the airlines is the banking sector. Draw your own conclusions from that.

In other news --

• C-17B
• China slows down
• Heathrow expansion "flawed"
• Gulf LCCs make an impact

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American has flown a Boeing 767-300ER which has been newly modified with Aviation Partners Boeing Blended Winglets on 20 July 2008 for the first time. The aircraft flew a ferry flight from Kansas City, Missouri to San Bernardino, California. In San Bernardino two months of certification and winglet performance testing for the aircraft will be undertaken.

American Airlines performed the modification of the aircraft at its Kansas City Maintenance Base. Blended Winglets are manufactured by GKN Aerospace, which is based on the Isle of Wight in the UK, for Aviation Partners Boeing.

Aviation Partners Boeing estimates that the use of the winglets on the 767-300ER could save up to 6.5% on fuel consumption through reducing the drag created by traditional wingtip vortices. At this time we can find no photograph of the plane. The picture above is the only one we found.

In other news --

• Africa's aviation success
• B-52 crash
• iPhone trumps BlackBerry
• The bad news keeps coming
• Another one bites the dust
• Picking over the bones at Midwest

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Lufthansa has published a new issue of its 'Balance' sustainability report giving a broad sweep of the group’s activities, the advances it has made and its future objectives in the environmental, business, societal and social fields.

Since 1991 Lufthansa has steadily decoupled growth in transport performance from resultant CO2 emissions. While transport performance has increased by 232% over the past 17 years, fuel consumption grew 121%. Thus almost half the growth in the group’s air traffic has been achieved without additionally burdening the environment.

In 2007, the actually average fuel burn in the Lufthansa fleet was exactly 4.32l/100km. Ongoing fleet renewal has contributed notably towards reducing specific fuel consumption. An aircraft, such as an A340-300 burns around only 3.5l/100km.

How good is this fuel consumption for the A343? Renault Clio: 5.5-6.5l/100km; Toyota Yaris: 5,7l/100 km and Mitsubishi Signo: 8l/100km. These cars offer very good consumption figures. Yet the A343 is about half their consumption level. In fact, Honda's Insight hybrid achieves the extremely low fuel consumption rating of 3.4l/100km - about the same as the A343.

In other news --

• Qatar wants more Boeings - not the one's you're thinking of though
• Russia gives Pentagon excellent news
• Austrian gets new suitor - maybe
• Qantas starts to shrink - bye bye 777-300ER

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How about this for a funny Friday story? This is a direct quote from a Russian news source.

"Russian air carrier S7 Airlines has faced an unordinary claim by the West-Siberian procuracy: it found filling in plane tickets in the English language, including the dates, routes, and the passenger’s surname, to be violation of the law for customer rights protection, the Constitution, and a number of other legal acts.

According to the procuracy, “absence of information in Russian, which is the state language of the RF, on the plane tickets violates passengers` rights for getting valid and quality information about the transportation conditions”.

The procuracy has rendered a decision that S7 Airlines must rectify the violation. However, the perspectives of such rectification look vague due to the Russian air carrier is doing nothing but sticking to the world common practice. In the majority of countries English is the main language plane tickets are filled in: it helps to avoid misunderstanding at international flights and lets passengers understand what is written on plane tickets of any country."

OK, we think "procuracy " is really bureaucracy "unordinary" should perhaps be extraordinary. Anyway, its true English is not the language of the Russian Federation. As the story plainly shows. Hope you enjoyed the giggle.

In other news --

• SAA in touble - again
• Flybe swipe at MOL - if you play with mud...
• Aircell talks up 4G
• JSTARS getting much older
• A buyer's market - airplane leasing firms looking strong

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Malaysia Airlines have announced the airline has ordered 35 737-800s. The order is valued at more than $2.6bn at current list prices. The airline also acquired purchase rights for an additional 20 737-800s. The order brings the total number of 737s ordered past the 8,000th mark, was recently posted on the Boeing Commercial Airplanes Orders and Deliveries Web site attributed to an unidentified customer.

As of June 30, the 737 logged more orders than any other commercial jet model in history. Boeing has more than 2,200 unfilled orders for the 737NG with a retail value of more than $160bn at current list prices.

How's that for a forty year old design? We'd say pretty remarkable.

In other news --

• SuperJet's secret sale - we think Air France
• Continental's results
• AMR and Delta results
• US Airways pilots and fuel loads - scary or not?
• Ryanair cuts Stansted fleet 25% - blames BAA, surprised?

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And we all thought the problem was solved, right? After all, are we not now in the period where the first batch of planes are rewired and the regular wiring is in place going forward? Dream on it seems. See this FT story.

Its clear from the story that the Franco-German entente is not quite there yet. Jean-Pierre Guizerix leads the French team is quoted as saying “We are in deep shit.” Ah, yeah. Then throw this little gem into the mix - "at least 60 per cent of the Germans were not even Airbus people but temporary staff drafted in from outside." Wow! now this is news. We have not seen this anywhere before. Can Airbus seriously think that this is the solution?

Reading the rest of the piece simply makes us happy we don't have any EADS stock. Clearly the A380 assembly is a mess - still.

In other news --

• China's air traffic slows sharply
• Northrop's CEO on tanker - dire consequences
• Air China order - where is Boeing on this news?
• ATA on NY ATC - but its not the whole story

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Russia may form a joint venture with China for development of MS-21. United Aircraft Construction Corp CEO Alexei Fedorov said at Farnborough yesterday that China has a program called "Big Passenger Jet" which means that MS-21 and its Chinese analogue may become competitors. This may turn a reason for the parties to arrange creation of a joint venture. Sounds like wishful thinking.

The MS-21 is a joint effort so far between YAK and Ilyushin. The genesis of this plane dates back to 2005. It has changed shape a few times too. The aircraft will be able to carry 132-174 passengers. Planned first deliveries are for 2012. But being Russian, this could change.

In other news --

• The rail/air mash up
• CSeries - brave move, watch out Embraer
• F-22ski?
• Northrop's tankers - 4 ready by 2009 - where's the Boeing?

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EADS CEO Lois Gallois says they are watching airlines in the US and India carefully but sees no need to panic. This comes from a piece in today's FT.

But despite the brave face, things are not comfortable at Airbus where the insider trading mess just keeps on going. Despite the bravado, how can anyone seriously expect the investigation (which now has touched 17 executives) assume that the subject does not consume inordinate numbers of hours that should be used elsewhere?

That said, Airbus placed some big orders over the last two years with start ups in India and SE Asia. Hence its huge backlog of work. But much of this can evaporate as airlines start to go away - as SRB predicts. Indeed SRB thinks a large US airline could easily close - anyone else want to offer better names than United or US Airways? And who do you think is exposed more there? Why the nice people from Airbus of course; especially at US Airways.

Which brings us back to that word panic. The dollar slump has not bottomed out; the tanker deal looks real iffy now. Perhaps there is no panic (after all EADS and Airbus have some serious shareholder support don't they?) - but along with investigations and seriously softer markets, sleepless in Toulouse sounds more accurate than sleepless in Seattle.

In other news --

• German mergers
• Boeing wins Fly Dubai order
• Boeing vs. Pentagon - again, can you believe this?
• Pratt gets a boost
• Bombardier makes its first Farnborough splash in a while

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It never ceases to amaze us how powerful the blogging community has become. If you ever wanted to see the "network effect" at work, look no further. Readers may remember the last big one; during the last Lebanon War a Reuters correspondent doctored images to make the bomb damage look much worse than it was.

Well here we go again. How come its bloggers that get this done? Hello? Is the "old media" awake?

Anyway, besides the media doing its Lemming thing, the Iranians have been caught out. Not that they will care much - they have made it clear that they are sending a message. Too bad they did not add another dozen launches in the same picture. The "big idea" here is that they have so many missiles, they can test all day and still have enough to defend themselves. Of course that is if you buy the fact these devices are for defense.

In other news --

• Biomimicry - yes you need to know this
• Russians at Farnborough
• Biofuels accelerates
• Late - the new normal
• Boeing's 2008 outlook
• T5 still taking hits

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Bloomberg reports on a meeting the FAA had about this matter. All this talk is good - but how is the 8/24 hour rule being enforced? Pilots we spoke to say that routinely their days are over 8 hours and that that time is only really defined to be flying time. The hours before and after are excluded and typically could nearly double the period out of the available 24.

Watch for a fight over a better definition of "duty time". This comes at a terrible time for pilots - many of whom are about to get laid off once again. This means many pilots would rather work harder but stay employed. Clearly we are about to see a clash between market reality and rule making once again. The airlines would rather keep "duty time" defined as flying whereas pilots want that definition broadened.

In other news --

• Air France passengers love OnAir
• Its official - we are near bottom in US airline/passenger interaction
• Composite demand to soar
• A30X?
• Prospects for world tourism - white paper

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Mary Schiavo's book was panned by those inside the beltway - the insiders take a dim view of any criticism. Well, guess what? Here comes another one.

How come these people go on about how broken the system is? Sure any air traveler can tell you about dingy airports, filthy planes, awful service ad nauseam. But what are we going to do? America simply too big for train rides. There is no way to go from coast to coast other than by air.

So we expect an FAA that works - and by and large it does. Despite budget trouble and political infighting, there are dedicated people who "move tin" constantly and safely. They are unseen (but heard on channel 9). Airlines may come and go, but these people keep the system working with old technology and often lousy pay and benefits.

In fact, it seems that what we have here is yet another example of why and how the commercial aviation system in America works - it works most of all because there are literally millions of people in this business who, despite logical reasons for decamping, slog on, dedicated to an industry they love. But for these amazing humans, the American economy would grind to a halt. Without its commercial aviation sector working, often bumbling along, America couldn't work.

In other news --

• Singapore tries again
• Want to invest with SRB?
• EU airline June traffic numbers

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Here's a remarkable story. The fact that some laptops go missing is astounding - but that only a third are reclaimed is even more eye popping. Most go missing during the TSA process (no shock there) .

The lost data is something of a concern. How many of us have our personal data living on somebody's laptop? Think about that for a moment. Your bank, your credit card, your who knows what could all be on a lost laptop someplace. We have virtually no control over this information. Is this a lawsuit waiting to happen? How does one prove a stolen identity has been enabled through a lost laptop? <-p> One would think that laptop users around the world would employ some means to make access to the machines restricted via passwords. (Note to self) Any suggestions?

Full report is here.

In other news --

• China's police
• RAF runs out of transport
• Houston missile story update
• ANA goes for the A380
• Another order leaks

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Today's news

Yes folks, the power of the entrepreneur in America lives. Demonstrating the never ending desire to make money from flying people around, this airline has come out of the shadows. Take a look. Its a neat idea and clearly a niche. But then niches tend to grow and with everyone shrinking, this is possibly a great time to find a niche.

If this idea works - and we think it can - might not the idea be replicable elsewhere? The answer is likely to be yes it can. Now the scramble will be to identify other city pairs like this. The turboprop market appreciates the pick up for sure.

In other news --

Oil at $146

Being a commercial pilot in America

AA, BA & Iberia

A sign of the times? AA's latest numbers.

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Today's news

Quieter engines -- Word reaches us that a researcher at the University of California, Irvine, has come up with an idea of how to make jet engines quieter. Dimitri Papamoschou says that that most of the noise in the engine is caused by the turbulence in the fastest-flowing air exiting the engine. This can be quietened by directing the noise upwards through separating the air into two channels of different speeds away from the ground.

Bottom line -- Papamoschou found that in NASA created simulations, this technique could successfully reduce the amount of noise coming to the ground by more than 6 decibels. Decibels are on a logarithmic scale, so this is considerable, every drop of 3 decibels equals halving of noise. A "silenced" engine would produce about a quarter of the acoustic energy of a conventional one and so be significantly quieter.

In other news --

Global in-flight Internet approaches

Maybe we were not too far off on China's aviation trouble

Austrian for sale

L'Avion is now L'OpenSkies

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Today's news

Naughty China, again -- How about his little gem? "A recent analysis of web sites pushing malware (software that helps hackers steal data) revealed that half of them are connected with just ten ISPs, and six of those ISPs are in China." Oh but of course there's more.

Chinese Internet access is highly policed by a special force of some 30,000 police technicians. In China and its Internet, one doesn't do something the government does not want. So, you ask, how do these criminals manage to survive in such a heavily policed Internet? Well you should ask and the answer is - just like in Russia - the naughty people and the police are hard to separate.

Try this - create a free blog site and then publish something about China's politics. The reaction won't be long in coming. It is common to come across vandalized web sites of organizations that push democracy in China, or protest the restrictions on the Chinese Internet, or say anything the Chinese officials do not like. The Russians did the same thing in Estonia last year.

And those nice people at Airbus are building a factory in China. Airbus believes they won't be taken for a ride like McDonnell Douglas or Embraer. Right.

In other news --

Another view on the tanker fracas

Africa's aviation

Hello George Soros, welcome to commercial aviation

Humbert follows Forgeard

IAG aviation consulting services comes out of the box

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