FAA readying drone test programme

The FAA is soliciting public comment on the selection of test sites in the agency's ongoing effort to integrate unmanned air vehicles (UAV) into national airspace. The FY2013 re-authorization, the Congressional funding bill that keeps the FAA running, mandates that the organization set up six UAV test sites by early February, 2013."What we're trying to do right now is get public comment," says the FAA. "We're saying, ok, here's how we figure things should work. Are we right, should we add anything else?"

Neither the test regime nor the test site locations have been decided, but language within the bill stipulates that the test programme will run for five years. UAVs operating in US airspace are restricted to small operating areas set aside specifically for their use. While heavy UAV users include the Department of Defense, various law enforcement agencies and research institutions, stringent airspace regulations prevent the commercial operations long forecast for unmanned aircraft.

The FY2013 FAA reauthorisation bill mandates that the agency draw up a comprehensive plan to integrate UAVs into the national airspace within 270 days of enactment, or September 2013. A proposed rulemaking plan for UAVs weighing under 2kg (4.4lb), operated by government or law enforcement entities, is due "in late spring."

Other language in the reauthorisation states that UAVs are to be integrated into national airspace by September, 2015, but details remain open for interpretation.
"The act mandates that we have safe integration, not full integration, into the NAS by 2015," says the FAA.

Flight Global

Ex-Im Bank Financing Still In Airline Crosshairs

President Barack Obama late last week, during an appearance at a Boeing facility, weighed in for the first time on U.S. Export-Import Bank (Ex-Im) reauthorization, urging Congress to approve funding legislation. Despite this, U.S. airlines are pressing ahead with their lawsuit to block a recent Ex-Im Bank-financed deal.

The administration is touting export credit agency (ECA) financing via Ex-Im Bank as a crucial way to boost U.S. manufacturing competitiveness and to create jobs. The bank last week announced a $740 million loan guarantee to suppliers, including companies that work with Boeing. “Ex-Im is proud to have America’s No. 1 importer, Boeing, join with us in supporting the company’s small business suppliers in the use of our supply chain financing product,” says Ex-Im Bank Chairman Fred Hochberg.

However, Airlines for America (A4A) asserts that Ex-Im loan guarantees put U.S. carriers at a competitive disadvantage. In a suit filed in the U.S. District Court for the District of Columbia last year, A4A sought to block Ex-Im financing for Air India to buy 30 Boeing aircraft. In that suit, A4A claims the Ex-Im Bank had provided $52 billion in loan guarantees to non-U.S. carriers in the past 10 years, which came at the cost of 4,100-7,500 airline jobs. Furthermore, A4A claims a loan guarantee to financially struggling Air India could put U.S. taxpayers on the hook should the carrier default (Aviation Daily, Nov. 17).

“Before providing subsidized financing to a foreign airline, the Ex-Im Bank is required by law to consider the adverse impact on industries and employment in the U.S., as well as the likelihood of repayment,” an A4A spokesman tells Aviation Week. “We are merely asking for Ex-Im to ensure a level playing field in the global aviation market by following its statutory mandates to ensure that U.S. taxpayer-backed loan guarantees to our foreign competitors do not harm U.S. airlines and their employees,” he adds.

Default on an Ex-Im loan has not historically been a concern, says Philip Baggaley, analyst for Standard & Poor’s, which, like Aviation Week, is a unit of The McGraw-Hill Companies. “Ex-Im has an excellent track record.” Ex-Im loan guarantees finance new aircraft, which are high-value assets, and due to the way the loans are typically structured, financially struggling airlines tend to liquidate these assets last, Baggaley says.

“These are not bad credit loans.”

Furthermore, Ex-Im’s aircraft financing has been a net contributor to the U.S. Treasury, Baggaley says. “This is a money-making enterprise for the U.S. government, and not a drain on the Treasury at all.”

Aviation Week  

Boeing, Citi Bank N.A. Partner on Export-Import Supplier Financing Program

Photo Credit: Boeing Images

SEATTLE, WA -- Boeing (NYSE: BA) has become the latest U.S. exporter to help its eligible small-business suppliers gain access to affordable financing through participation in a Supply Chain Financing Program guaranteed by the Export-Import (Ex-Im) Bank of the United States.

Boeing is notifying several hundred qualifying U.S.-based suppliers that system testing is complete for the new financing program, to be operated by Citibank N.A. (Citi), allowing sign ups to proceed and payments to flow. 

The Ex-Im program, first offered in 2009, allows small businesses involved in exporting non-military goods to receive attractively priced working-capital financing. It is done through early payment of their accounts receivable, in this case from Boeing, in exchange for a small discount fee paid to Citi for those receivables accepted for the program. The program is part of Obama Administration's National Export Initiative to double U.S. exports within five years.

At a time when economic recovery continues, the Bank's program helps inject liquidity into qualifying small businesses, providing faster access to needed cash flow. Ex-Im provides a 90 percent guarantee of the eligible invoices while a lender, such as Citi, bears 10 percent of the risk.

"Increasingly Boeing has called on small business to help us in sustaining export-related jobs. The Supplier Financing Program is a great tool to encourage this key growth area to prosper," said Tom Dillon, Boeing corporate finance director who led the financing program's implementation.  "Small business can truly join larger exporters in working together to grow much needed jobs supported by demand for American products the world wants."

The Boeing supplier program was authorized in September 2011 with Ex-Im Bank's approval for an initial $740 million capacity. "Ex-Im is proud to have America's number one exporter, Boeing, join with us in supporting the company's small business suppliers using our supply chain financing product. Eligible companies will be able to more quickly turn their accounts receivable into cash, helping them power more sales and supporting American jobs," said Fred P. Hochberg, Chairman and President of Ex-Im Bank.

Participating suppliers select accounts-receivable invoices they want to sell to Citi which, if accepted, are paid in a day or two instead of on the longer due dates. Capital flows to small businesses faster, and at a lower cost, as a benefit of being a supply partner to a major U.S. exporter.

"Citi is pleased to be a part of this very important initiative in partnership with Ex-Im Bank and Boeing.  We fully appreciate the role of small and medium-sized businesses (SMEs) in the growth of the U.S. economy.  The SME market is one of the keys to sustaining economic growth and stimulating the trade supply chain, globally," said Craig Weeks, Global Head of Trade Product Sales at Citigroup.  He adds, "This program represents Citi's continued commitment to the U.S. economy by providing the financing required for credit-challenged sectors." 

Boeing is offering the program to its aircraft-related suppliers domiciled in the U.S. that qualify under Ex-Im Bank's guidelines for the program. At least half of the outstanding value of the purchased receivables is expected to be from suppliers meeting U.S. Small Business Administration qualifications. The company could expand supplier participation at a later time.

Boeing Media

Coming Soon: Era Of UAS?

Washington DC --- The new FAA re-authorization bill that was signed into law this week by President Obama (PDF) creates a fast track for the integration of civil unmanned aircraft systems into the national airspace.

The legislation states that the FAA and the UAS industry must work together to develop a "comprehensive plan" by mid-November that will safely achieve the full integration of UAS by Sept. 30, 2015. Deadlines for certain smaller systems are set even sooner. For example, first responders will be allowed to fly small UAS weighing 4.4 pounds or less within 90 days. And within six months, the FAA must designate six test ranges where the UAS can fly to develop their sense-and-avoid capabilities.

Within one year, small UAS under 55 pounds will be allowed to fly in the Arctic regions of the U.S., 24 hours a day, at an altitude of at least 2,000 feet. By mid-2014, small UAS that weigh under 55 pounds will be allowed to fly in the national airspace system. "Technology is advancing to the point where we now know these systems can reliably fly," said Michael Toscano, president of the Association for Unmanned Vehicle Systems International. "The next step is to work on the regulations that govern the rules of the sky to ensure that unmanned aircraft do no harm to other manned aircraft or to people or property on the ground." The legislation says that all UAS must have a "sense and avoid capability," and standards will be set for the licensing of operators. The FAA also will be required to study the causes of accidents involving UAS.

Avweb

Lockheed Martin Emerges Largely Unscathed in Pentagon Budget

Budget scorecard: Lockheed up, General Dynamics down

The Obama administration's new military spending plan is good news for defense-aerospace giant Lockheed Martin, but bad news for combat truck and submarine builders, defense and Wall Street analysts say.
The $525 billion Defense Department budget plan features some weapon program terminations and changes. Analysts say Lockheed fared the best, while General Dynamics took a hit.
Pentagon officials made only minor changes to the F-35 fighter program, keeping intact plans to buy more than 2,400 models. That move gives a major boost to Lockheed, analysts said.

[Three Political Grenades in Pentagon's Budget.]

"Lockheed Martin appears to be the biggest winner in the Pentagon's new spending priorities, despite a slowing in the rate at which its signature F-35 fighter programs will ramp up," said Loren Thompson of the Lexington Institute. "The Pentagon has confirmed its plan to buy all 2,443 F-35s … rather than slashing production goals or eliminating one of the three variants."

That is one reason Wall Street, which has grown leery of defense firms as annual spending has shrunk, continues to judge Lockheed's stock with high marks. Morgan Stanley issued a white paper this week after the Pentagon's Monday budget roll-out that concluded Lockheed stock "is expected to be in line" with the financial firm's projections over the next year.

There are other reasons Wall Street is looking kindly upon Lockheed. The Pentagon's budget endorses the Navy's Littoral Combat Ship program and "fully funds every satellite program Lockheed is building," Thompson said. The spending plan also provides classified "funding for a new constellation of spy satellites that the company was awarded a contract for last fall," Thompson said.

Another winner in the budget plan is Raytheon.

Morgan Stanley is projecting Raytheon's stock will perform "in line" with projections. The firm "suffered only minimal damage" in the 2013 Pentagon budget, largely because it has positioned itself well through its electronics business, Thompson said. As the military relies more and more on upgrading existing platforms, Raytheon will be in line to do that work.

[Pentagon Chief Panetta: U.S. Will Do 'Everything' to Stop Iran.]

Among the losers were the makers of some Navy ships, like General Dynamics, which makes nuclear-capable submarines. Jim McAleese, who runs a defense consultancy based near Washington, ranked GD at the bottom of his winners-and-losers lists.

Other losers were heavy truck makers like Oshkosh, analysts said.
"Army ground [vehicle] programs were hit particularly hard," McAleese said. The Army canceled an effort to upgrade its Humvee fleet, and cut hundreds of millions from a number of wheeled and tracked combat vehicle programs.
"Oshkosh bet the farm on Army programs, but it is finding the Army is having a very difficult time following through on any of its plans," Thompson said.
McAleese, in a briefing for Wall Street, noted the Army's decision to fully fund its Joint Light Tactical Vehicle program is the "lone bright spot" in the spending plan for combat truck manufacturers.
But the list of companies mulling a bid for that multimillion-dollar tender have yet to formally declare whether they will even compete.
Why? "Because the Army," Thompson said, "simply has an awful track record on its procurement plans."

US News and Reports  

With President's Signature, FAA Reauthorization Official

After five years of trying to get a long-term FAA funding bill passed, President Obama's signature on Tuesday was the last step required to create a new four-year authorization bill. The $63.6 billion bill, which runs until 2015, aims to provide consistent funding and support to help upgrade to NextGen.

"This is a great day for our National Airspace System," said Paul Rinaldi, president of the National Air Traffic Controllers Association. "This four-year bill will provide the funding stability we need to develop and train our next generation of controllers along with the next generation of equipment and procedures."

Besides providing the long-awaited funding for NextGen, the bill accelerates the integration of drones into the domestic airspace, and makes it harder for airline workers to unionize. General aviation groups were generally pleased with the bill, which left out user fees and requires no tax increase for avgas or jet fuel. The bill also makes it possible for the government to create an incentive program to help general aviation pilots equip for NextGen, authorizes $13.4 billion for airport improvement projects, and allows airports to grant access to adjacent property owners.

Avweb

Obama Budget Would Cut Airline, Airport Funding

The new Obama administration budget proposal, released on Monday, had general aviation advocates worried about user fees, but other aviation sectors have also found cause for concern. The Air Line Pilots Association was unhappy about proposed cuts of $36 million from the Federal Air Marshal Service and $13 million from the federal flight deck officer program, which trains volunteer pilots to carry firearms on board.

Lee Moak, president of ALPA, said funding for the FFDO program is already "minimal," and any further reduction "could very well lead to its ultimate demise." Airlines would face increased security fees, as well as a $100 departure fee to help cover the cost of the air traffic control system. Funding for improvements at medium and large airports would be cut by 27 percent.

 Airline travelers, under the proposal, would pay up to $25.5 billion in fees over the next 10 years, with the goal of covering the costs of aviation security through user fees "and not by the general taxpayers," according to the budget plan. However, $18 billion of those fees would go to pay down general government debt, not to provide security, according to The Wall Street Journal. It's widely expected that most of these proposals will be rejected by Congress, and the budget plan will never be enacted in its current form.

Avweb

Obama To Visit Boeing Plant Friday, Formally Nominates 3 To NLRB

WASHINGTON -(Dow Jones)- President Barack Obama on Friday will visit a Boeing Co. (BA) plant in Washington state, where last year a labor dispute erupted over concerns that the Obama administration was meddling with business decisions at an uncertain time for the economy.

The White House, in a statement Monday, said Obama will visit a union-operated Boeing plant in Everett, Wash., "where he will continue to discuss his blueprint for an economy built to last based on American manufacturing and the importance of manufacturing imports."

His visit to the plan will come just days after unveiling a $3.8 trillion budget that was infused with populist proposals that play well with unions such as taxing the wealthy and billions in new spending to upgrade the nation's ailing infrastructure.

Last year, the National Labor Relations Board accused Boeing of trying to illegally transfer union work from a plant in Washington to a nonunion facility. That moved caused a backlash from Republicans, the business community and GOP presidential hopefuls, who said that the Obama administration was meddling in business decision.

President Obama said during the dispute that the NLRB is an independent agency, and speaking in general terms urged labor and management to come to an agreement.
The two sides settled in December of last year, with Boeing agreeing to build a retooled version of 737 Max at a union plant in Renton, Wash., rather than another state. In exchange, the union dropped opposition to

Boeing's use of a new, nonunion plant in South Carolina to assemble Dreamliners.
The plant the president is visiting is a union-operated plant where the company's new 787 Dreamliner is assembled.

The president's budget, in addition to billions in spending on roads, railways and runways, also includes money to boost spending on advanced manufacturing and programs to train high-skilled workers. Those ideas will likely play well with union workers, who also donate heavily to the president's campaign.

Separately, President Obama formally nominated Terence Francis Flynn, Sharon Block and Richard F. Griffin Jr. to be members of the NLRB. They already serve on the board, as President Obama appointed them during the Senate recess in early January.
They will need confirmation by the Senate to serve for full terms. Flynn is a Republican, while Block and Griffin are Democrats.

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