Flight Safety Information June 5, 2012 - No. 114 In This Issue EASA Poised To Settle on A380 Fix Crashes spur call to update U.S. firefighting aircraft fleet Crash toll remains unclear as Nigeria plumbs jet debris How do you know your airline is safe? PRISM Certification Consultants U.S. Pilots Find High Demand, High Pay Overseas Lagos plane crash: Nigeria leader in air safety promise 5 TSA workers fired, 38 more disciplined after investigation at Fort Myers airport Eclipse 550 twin-engine jet production begins FedEx Retires 24 Jets to Cut Costs as U.S. Shipments Fall Uruguay's Pluna Airline CEO warns of 'collapse' EASA Poised To Settle on A380 Fix The latest operator of the A380, Malaysia Airlines, plans to take delivery of its second superjumbo "shortly." Airbus and the European Aviation Safety Agency (EASA) have reached the final stage of consultation over a final fix for both retrofit and so-called forward fit of replacement wing rib feet for the A380 following discoveries of cracks in a relatively small number of the parts by several operators. If all goes as expected, the discussions with the EASA will end within days, according to head of A380 product marketing Richard Carcaillet, ahead of retrofit certification some time in the third or fourth quarter and deliveries of the first retrofit kits during next year's first quarter. However, Airbus expects to deliver 119 A380s before it rolls out the first airplane built with new wing rib feet installed during the normal course of production and under a "slightly adapted" manufacturing process in the first quarter of 2014. Airbus insists the cracking, which Carcaillet said developed on an average of between 12 and 14 rib feet out of some 2,000 in each wing, has not compromised safety and that each repair will take "a matter of days, not weeks" to complete. Carcaillet explained to AIN last week that the solution involves replacing the current wing rib feet-L-shaped brackets that attach the wing ribs to the skins made with the comparatively new, Alcan 7449 aluminum alloy-with rib feet made from slightly heavier, 7010 aluminum used in the A330. According to Carcaillet, the weight penalty will amount to a negligible 100 kilograms (220 pounds). To certify the final fix, Airbus will need to validate the conformity of the repair on its A380 flight-test aircraft, a process that will involve what Carcaillet characterized as "a few flights." Certification of the retrofit and forward fit would restore Airbus's full service design goal of 19,000 flight cycles without a need for further inspection. Carcaillet wouldn't comment on how the redesign might affect the timing of deliveries to specific customers. "It's a decision for [each] airline," said Carcaillet. "Either they want to start flying the airplane as soon as possible...They take it and have to inspect it after a certain number of cycles and then keep on inspecting it until the repair [is performed]. Or, they ask Airbus to incorporate what we call an interim modification before delivery, which gives us a longer interval to re-inspect the aircraft." So far Airbus has registered charges against the program of €264 million ($332 million) to cover retrofits to the 30 airplanes it plans to deliver this year. Nevertheless, the company continues to cite a 2015 break-even estimate. http://www.ainonline.com/aviation-news/ain-air-transport-perspective/2012-06- 04/easa-poised-settle-a380-fix Back to Top Crashes spur call to update U.S. firefighting aircraft fleet SALT LAKE CITY (AP) - Once a Cold War-era submarine-attack plane, the Lockheed P2V has for years been both a mainstay of the nation's aerial firefighting arsenal and a cause for concern. Flying in the turbulent, unforgiving skies above raging wildfires, the planes have crashed at least seven times from either mechanical problems or pilot error, causing 16 deaths, dating back to 1990 when they were slowly added to the nation's firefighting fleet. The latest in Utah that killed two pilots and a crash-landing by another one of the same planes in Nevada, both on Sunday, have renewed calls for the federal government to speed up efforts to modernize the nation's firefighting aircraft fleet used to drop fire retardant. All of it, just as the busiest part of the wildfire season begins in the West. "As the air-tanker fleet continues to atrophy, it's going to reduce the country's ability to get there early, which is why so many of these fires mushroom," Sen. Ron Wyden, D- Ore., chairman of the Forestry Subcommittee, said Monday. Wyden led a push in March by a group of senators from the West to get the U.S. Forest Service to bring newer planes into service. On Sunday, a tanker went down in western Utah as crews battled a lightning-sparked wildfire that jumped the Nevada border about 150 miles northeast of Las Vegas. Iron County (Utah) Sheriff Mark Gower said Monday it appeared a wing tip hit the ground in a rocky canyon. The plane practically disintegrated, leaving a 600-yard debris field, he said. Authorities said ground crews tried to keep the fire from overwhelming the wreckage to give officials enough time to confirm the pilots had died, but flames soon swept through. The men's bodies were eventually recovered later. The plane, owned by Neptune Aviation Services of Missoula, Mont., was built in 1962, according to federal aviation records, but had been modified to fight fires and was among only a handful of air tankers available nationwide. Another P2V, this one owned by Minden Air Corp. in Minden, Nev., was fighting a wildfire south of Reno on Sunday. Its crash-landing at Minden-Tahoe Airport was captured on video, with the plane dropping to its belly and sliding across the runway. No one was injured. The government previously had relied on C-130 cargo planes for firefighting efforts but started slowly adding P2Vs to the fleet in the early 1990s, and then began relying much more on the planes after two C-130 crashes in 2002. Tom Harbour, the U.S. Forest Service's fire and aviation operations director, said the agency has concluded that the nation needs up to 28 of the next generation of air tankers, those that can fly faster and carry more retardant. Overall, the Forest Service budgets $70 million a year on firefighting aircraft out of $2 billion overall fighting wildfires. Replacing the aging fleet will not happen quickly, Harbour said: A contract for three air tankers will be awarded this month, and four more will be added next year. Read more: http://www.azcentral.com/news/articles/2012/06/04/20120604crashes- spur-call-update-us-firefighting-aircraft-fleet.html#ixzz1wvNUeTBU Back to Top Crash toll remains unclear as Nigeria plumbs jet debris US citizens were among the 153 known casualties LAGOS, Nigeria - A crane hoisted the tail section of a commercial jet from the smoldering debris of a shattered neighborhood Monday in a search for the dead from a crash that killed all 153 people aboard and an unknown number on the ground. Apartment buildings, small businesses, and roadside shops were smashed to bricks and rubble Sunday when the Dana Air MD-83 plowed into the area about 5 miles short of Murtala Muhammed International Airport in Lagos. Pilots on the flight from Nigeria's capital of Abuja to its largest city of Lagos radioed the tower that they had engine trouble shortly before the crash, but the exact cause remained unclear. The weather was clear at the time. Some US citizens were aboard the flight, State Department spokesman Mark Toner said, but he could not provide a firm number. Others killed in the crash included at least four Chinese citizens, two Lebanese citizens, and one French citizen, officials said. President Goodluck Jonathan wept Monday as he visited the Iju-Ishaga neighborhood, where emergency workers labored. A backhoe clawed at the debris looking for the dead. Jonathan pledged to make air travel safer, but the crash called into question the government's ability to protect its citizens and enforce regulations in a nation with a history of aviation disasters. By nightfall, searchers with police dogs recovered 137 bodies, including those of a woman cradling an infant, according to Nigeria's National Emergency Management Agency. Rescuers acknowledged they still didn't know how many people died in the wrecked apartments and smaller tin-roofed buildings along the narrow streets of Iju- Ishaga. "The fear is that since it happened in a residential area, there may have been many people killed,'' said Yushau Shuaib, a federal emergency management spokesman. Lagos state, home to 17.5 million people, has grown rapidly in recent years and soon will be home to the most populous city in all of Africa. Massive migration and urban sprawl have brought residential neighborhoods to the boundaries of the airport. Boeing said in a statement on its website that the company is ready to provide technical assistance to the Nigerian Civil Aviation Authority through the US National Transportation Safety Board. Dana Air said an investigation was underway with US officials assisting the Nigerian government. On April 19, 2010, the same plane made an emergency landing in Lagos due to loss of engine power after a bird strike following takeoff, according to the Aviation Safety Network. The plane was exported to Nigeria in early 2009. It was first delivered in 1990 with the US registration number N944AS to Alaska Airlines and had two minor incidents while in the Seattle-based airline's service, according to databases of the Federal Aviation Administration and the Aviation Safety Network. http://bostonglobe.com/news/world/2012/06/04/crews-search-for-dead-after-plane- crash-nigeria/CdNXj2oQpKtV9PN5i27D7J/story.html Back to Top How do you know your airline is safe? Beyond a vague familiarity with the world's major airlines, most travelers know little about the hundreds of carriers transporting passengers across the globe. Sunday's deadly air crash in Nigeria raises questions about the safety of international airlines. So how do passengers find safety information? There are several things travelers should look for to gauge an airline's safety, according to Bill Voss, CEO of the Flight Safety Foundation, an international nonprofit organization. In short, you're looking for a Category 1 ranking from the U.S. Federal Aviation Administration and registration with the International Air Transport Association, an international trade group. Membership with a major airline alliance helps, and you likely want to avoid airlines banned by the European Union. The Federal Aviation Administration looks at international aviation regulators. The FAA program assesses the safety standards of the civil aviation authorities of countries with airlines operating in the United States. "We look at the ability of the aviation authority in the country to administer its aviation community in accordance with international regulations. We don't look at individual airlines," said FAA spokesman Les Dorr. Countries with aviation authorities that meet international standards receive a Category 1 ranking. Those that don't receive a Category 2 designation. Nigeria, the site of the crash that killed more than 160 people, has a Category 1 ranking. Twenty-five nations, nearly a quarter of those assessed, hold a Category 2 ranking, including the Philippines, Bangladesh, Barbados, Cote D'Ivoire, Ghana, Indonesia and Israel. The International Civil Aviation Organization, a U.N. agency, also focuses oversight on regulators rather than airlines. The agency has conducted mandatory safety audits of the civil aviation authorities of member countries since 1999. Most countries publish the audits, but it's not mandatory, "and the ones that you really want to see are the ones that don't publish," Voss said. Despite occasional catastrophic crashes, airline accident rates have seen "massive improvements" in the last few decades, he said. The global accident rate for commercial air service fluctuated between 3.9 and 4.6 accidents per million departures between 2005 and 2010, according to International Civil Aviation Organization. The agency's 2011 figures have not been released. In 2010, the global rate was four accidents per million departures. Africa had the highest regional accident rate in 2010 of 16.8, four times the global average, but Africa accounts for the lowest percentage of global traffic volume. North America's accident rate, 3.3 per million departures, was below the world average in 2010. The region had the highest number of accidents -- 35 -- but no fatalities. Europe also had an accident rate of 3.3 per million departures with 24 accidents, two of which included fatalities. The trade group International Air Transport Association does its own safety audits on air carriers. The organization's registry is searchable by airline. All of the association's more than 240 member airlines must meet audit standards to maintain membership. "(Airlines) who are IATA member carriers actually have a far better safety rate than the industry standard," Voss said. Dana Air, the Nigerian carrier involved in Sunday's crash, does not appear on the registry. Voss said the carrier may have chosen not to be audited or may not have passed. The cause of Sunday's accident in Nigeria is still unknown. The European Union's "black list" provides another safety benchmark. The EU takes a more aggressive approach to screening individual carriers and has banned more than 280 airlines from 25 nations from operating within the EU since 2006. African, Indonesian and Philippine airlines figure prominently on the EU's banned list, as do carriers in Kazakhstan and Kyrgyzstan. The EU also has a list of carriers subject to operational restrictions. No Nigerian airlines appear on either list. Membership in a major alliance, including Star Alliance, SkyTeam and oneworld, can also be considered a reassurance to nervous travelers, Voss said. Member airlines tend to monitor each other, reinforcing high safety standards. There are no guarantees, but air travel is still much safer than other means of transportation. "Particularly in the developing world, you have to look at how extraordinarily safe aviation is. Even though an airline might appear a little risky by your Western standards, it could easily be 1,000 times safer than taking the same trip on the road," Voss said. Read more: http://www.abc2news.com/dpp/lifestyle/travel/how-do-you-know-your- airline-is-safe#ixzz1wvUrMk9J Back to Top Back to Top U.S. Pilots Find High Demand, High Pay Overseas China Hiring 16K Pilots Over Next 3 Years (CNN) -- The pilot of the Nigerian jetliner that crashed in Lagos, the country's largest city, on Sunday was an American, said Oscar Wason, Dana Air's director of operations, on Monday. Wason did not identify the pilot by name or hometown, but he is among a legion of U.S. pilots now captaining jets for foreign airlines, said Kit Darby, an aviation consultant in Peachtree City, Georgia. "A lot of U.S. pilots are working overseas, more than ever before," Darby said. "It's pretty common." Darby said that as airlines have consolidated in the U.S., the job market for experienced airline captains has become "stagnant." Experienced captains are losing seniority, and it may take them 10 to 20 years to get a captain's position back, he said. So they turn overseas, where aviation is expanding and there is a clear need for the experience the Americans bring. They typically end up captaining jetliners with co-pilots and crew who are from their host countries or from other countries where aviation professionals are less experienced. The co-pilot of the Dana Air MD-83 that crashed Sunday was from India and the flight engineer from Indonesia, Wason said. "It's a challenging position, half trainer and half pilot," Darby said of captaining a foreign-flagged airliner. But the rewards can be substantial. Americans signing on to pilot jetliners in the Middle East, China and India can make well over $100,000 a year, plus add-ons like housing, according to Darby. He said a pilot working in Africa would probably made a bit less than those working in Asia or the Mideast but would still do well. "The big deals come with the captain's seat," he said. The Dana Air MD-83 that crashed Sunday is a fairly new plane by African standards and would probably provide a well-paying post to a captain, Darby said. An American pilot looking to work overseas may negotiate their own deals or be matched up with a foreign carrier through a recruitment service, he said. Wasinc International is one of those services. The company's website currently lists 34 pilot positions with carriers in China. For instance, Air China is hiring captains for Airbus A330 aircraft, and it will train. Pay is $4,000 a month during training and then $11,000 a month plus a $4,000 monthly living allowance once training is completed, according to the Wasinc ad. The website BestAviation.net lists 101 pilot or first officer jobs in locations including China, Lithuania, Indonesia, Mauritania and South Korea. In a report from February, Bloomberg said airlines in China will be hiring 16,000 pilots in the next three years, according to the Civil Aviation Administration of China. Shen Wei, a recruiter for China's Spring Air, told Bloomberg that China was a strong market for U.S. pilots. "Everyone is facing a pilot shortage," he's quoted as saying. "Foreign pilots are the quickest option." Back to Top Lagos plane crash: Nigeria leader in air safety promise Nigeria's President Goodluck Jonathan has said there will never be a repeat of Sunday's fatal Lagos plane crash, promising improvements to air safety. He was speaking as he visited the crash site where rescue workers are still trying to retrieve bodies. All 153 people on board, and an unknown number on the ground, were killed. An official told the BBC investigators have recovered both the flight data and cockpit recorders, vital for understanding what caused the crash. 'Major setback' The McDonnell Douglas MD-83, operated by Dana Air, crashed into a printing works and residential buildings on Sunday afternoon before bursting into flames. "We have been working very hard to improve the aviation conditions in this country, so this particular incident is a major setback for us as a people," President Jonathan said as he toured the crash site just north of the airport. "I am here with members of the national assembly, because we will thoroughly investigate this... at the end of the day, we will make sure that this will never repeat itself again in this country," he said. Correspondents say this could be a difficult challenge in a country with a history of major passenger plane crashes - this is the fourth crash in the last decade in which more than 100 people were killed. But the African Airlines Association says Nigeria has made significant improvements in the last five years, "maintaining world class standards of safety". "Nigeria has been used as a model of what can happen if you have a government determined to improve safety - by giving autonomy to the civil aviation authority to do whatever is necessary to improve safety within the country," Elijah Chingosho, the secretary general of the association, told the BBC's Focus on Africa programme. "I hope the president will ensure that the investigation of the cause of this accident is thorough and then they can learn lessons from there which should be implemented as soon as possible and fully." Efforts to retrieve bodies and clear debris from the area continue as the country began three days of national mourning on Monday. 'Working tirelessly' The BBC's Sam Olukoya at the crash site says Sunday's scenes of chaos have been replaced by better co-ordination by rescue workers. "The search and rescue and recovery has been going on steadily. Today, a large number of bodies have been recovered. More are still in there, and they're working tirelessly to get them out," Tunji Oketunmbi, the spokesperson for Nigerian Accident Investigation Bureau, told the BBC. The cause of the crash remains unclear. Both the aeroplane's black boxes have been recovered, according to Mr Oketunmbi. "These are very vital to our investigation, they will help us lots in determining the causes of the accident," he said. Aviation Minister Stella Oduah said that the pilot contacted the Lagos control tower just before crashing to say the plane was experiencing trouble. Indian-owned Dana Air, which has yet to make an official statement about the cause of the crash, has set up a 24-hour hotline for relatives. "Our thoughts and prayers are with the families of guests who were involved in the Dana Air mishap. May the souls of the deceased rest in peace," its website says. Dana Air says it operates to cities around Nigeria out of Murtala Muhammed Airport in Lagos. The airport is a major hub for West Africa and saw 2.3 million passengers pass through it in 2009, according to the most recent statistics provided by the Federal Airports Authority of Nigeria. http://world.myjoyonline.com/pages/nigeria/201206/87775.php Back to Top 5 TSA workers fired, 38 more disciplined after investigation at Fort Myers airport FORT MYERS, Fla.(AP) - Five Transportation Security Administration workers at a southwest Florida airport have been fired and another 38 suspended after an investigation found they failed to perform random screenings last year. The 43 disciplined workers, a combination of front-line screeners and supervisors, represent about 15 percent of the roughly 280 TSA employees at Southwest Florida International Airport in Fort Myers. The News-Press reported Monday that it's one of the largest disciplinary actions TSA has taken in the agency's 10-year history. The TSA said that during a two-month period last year, as many as 400 passengers who underwent routine screening at the airport never got additional random checks. About 3.8 million passengers flew through the airport last year. Back to Top Eclipse 550 twin-engine jet production begins ALBUQUERQUE, N.M., 5 June 2012. Eclipse Aerospace Inc., manufacturer of very light jets (VLJs), has begun initial production of its new model Eclipse 550 twin-engine jet. Eclipse Dealers from more than 30 countries attended and signed agreements for the purchase of new Eclipse 550 Jets slated for delivery in 2014 and early 2015. Eclipse is now armed with an established supply chain, a new FAA production certificate, and a certified airframe, says a representative. Eclipse plans initial low-volume production with the first aircraft taking approximately 12 months to complete as the balance of the production line is re-tooled and validated during the process. Full production for an estimated 50 to 100 aircraft per year is expected in 2014, paced by market demand, according to officials. During the official launch, Eclipse dealers representing more than 30 different countries were on hand as the management team and Board of Directors for Eclipse Aerospace signed the fuselage of the first production aircraft, Serial Number 1001. The Eclipse production team also mated the forward keel assembly to the fuselage. The new model Eclipse 550 twin-engine jet is built upon the Eclipse 500 but will offer auto-throttles, synthetic vision, enhanced vision, and a redundant flight management system. First deliveries are expected in mid-2013. http://www.avionics-intelligence.com/articles/2012/06/eclipse-550.html Back to Top FedEx Retires 24 Jets to Cut Costs as U.S. Shipments Fall (BLOOMBERG) FedEx Corp. (FDX) (FDX) retired 24 jets to cut capacity in the U.S. domestic Express division (FDX) as a slowing economy saps shipping volumes for the operator of the world's largest cargo airline. Taking the Airbus SAS (EAD) and Boeing Co. (BA) (BA) freighters out of service added to five jets grounded last quarter and planned retirements of 21 more in FedEx's 2013 fiscal year. FedEx is seeking to reduce costs in the U.S. part of the Express unit, which includes moving packages by air. "The domestic Express market is the most challenged from a volume standpoint in the FedEx portfolio," said David Ross, a Stifel Nicolaus & Co. analyst in Baltimore. FedEx needs to shrink "the domestic Express network to kind of match what we see as kind of lower long-term volumes." The move resulted in a non-cash impairment charge of 26 cents a share in the quarter that ended May 31, Memphis, Tennessee-based FedEx said yesterday in a statement. "Along with the decisions to retire these 50 aircraft, we are also developing detailed operating and cost structure plans to further improve our efficiency," Express Chief Executive Officer David Bronczek said in the statement. "We expect to provide additional information on these plans in the fall." FedEx said in the same statement that it was raising its quarterly dividend (FDX) 7.7 percent to 14 cents a share, payable July 2 to shareholders of record as of June 18. Quarterly Volumes Average daily package volume in FedEx's domestic Express business dropped 4 percent in the fiscal third quarter. Operating margins in the Express unit have failed to recover to pre-recession levels even as revenue in the last fiscal year reached the highest in at least a decade. Ross, who rates FedEx shares (FDX) a buy, said he doesn't expect growth in domestic volumes for "the next several years." Orders to U.S. factories unexpectedly fell in April for a second month, pointing to a deceleration in manufacturing, the Commerce Department said yesterday. That followed the May 31 report that U.S. gross domestic product grew at a 1.9 percent annual rate in the first quarter, down from a prior 2.2 percent estimate. The Express division is FedEx's largest. The company's other businesses include a ground package-delivery unit and FedEx Freight, a so-called less-than-truckload carrier that moves goods from more than one customer in each trailer. FedEx fell 0.1 percent to $85.20 at the close in New York, before the company's announcement about the freighters and the dividend increase. The shares rose 2 percent this year through yesterday. Retired Freighters The planes affected by the retirement are 18 Airbus 310-200 jets and six Boeing MD-10- 10 freighters. The Airbus planes have two engines and the Boeings have three. Both models are out of production, and FedEx said most "are currently parked and not in revenue service." The move includes 43 jet engines, FedEx said. The $134 million cost for the retirements was recorded in the quarter that ended May 31, according to FedEx, which typically reports results (FDX) from the fourth quarter of its fiscal year in June. "It's certainly a positive sign, in our opinion, that they're addressing it and that they are kind of lowering the fleet size," Ross said in a telephone interview. FedEx had 688 aircraft as of Feb. 29, including 397 jets, according to the company's statement. Back to Top Uruguay's Pluna Airline CEO warns of 'collapse' MONTEVIDEO, Uruguay (AP) - Brazil's slowing growth and Argentina's bewildering trade and currency restrictions are dragging down the profits of some of the region's airlines, which tend to be a reliable indicator of economic misfortune. In Uruguay, the national airline Pluna is resisting a $30 million government bailout offer, saying that unless politicians provide more protection from unfair competition, "everything we built will collapse." That warning came in an unusually frank letter that became public Monday after CEO Matias Campiani sent it to Pluna employees. Campiani, who asked his workers to stay optimistic, work hard and "don't forget to smile for our passengers," blamed Uruguay's neighbors, competitors and politicians for his company's difficulties. Airlines worldwide face higher fuel prices and tighter profit margins, but some are suffering more than others as competitors merge to cut costs and squeeze out smaller competitors. Brazil's TAM and Chile's LAN each reported a 22 percent plunge in first-quarter profits, citing rises in fuel costs and other expenses among other factors. Another Brazilian airline, GOL, laid off 1,200 people to cut costs. Aerolineas Argentinas continues to bleed money, receiving more than $200 million in subsidies during the first quarter of this year alone. "The price that airlines are paying for fuel is still very high so airlines have been pressured by costs. There has also been a worldwide and regional tendency towards mergers. This allows for lower costs for clients but it pressures margins for less efficient airlines that have a hard time competing with major carriers," said Jorge Sepulveda, who watches LAN for the EuroAmerica brokerage in Santiago, Chile. Pluna, the plucky airline of little Uruguay, is particularly vulnerable since it competes with Argentina's heavily subsidized national airline and Chile's LAN, which this month completes its merger with Brazil's TAM to create the region's largest airline, LATAM. Twenty-five percent of Pluna's shares are state-owned and 75 percent are held by an investment group, LeadGate, which specializes in turning around struggling companies in emerging markets. "We're going through strong turbulence," Campiani wrote. "All the aviation in our region is suffering from big problems, due to the major slowdown of economies that were growing at gigantic steps and now have stopped." He blamed Brazil, where economic growth slowed to 2.7 percent last year after booming at 7.5 percent in 2010, and he cited "the restrictive policies applied by Argentina" for Pluna's change of fortune, which has come so suddenly that it still hasn't shown up in quarterly reports. Pluna just had its best summer vacation season ever, flying nearly full planeloads of Argentines from Buenos Aires to the Uruguayan beach resort of Punta del Este. But that traffic has collapsed in the last few weeks due to draconian currency controls imposed by Argentina's government on its citizens, who have long used Uruguay as a place to shelter and hide their wealth from tax collectors. "These Argentine currency controls have significantly reduced our traffic and made it impossible for us to bring money from Pluna Argentina to Pluna Uruguay," Campiani said. Other frustrations abound: The Argentine government has refused to let Pluna fly to more destinations inside Argentina, even though Uruguayan politicians allowed Argentina's state-owned domestic carrier, Austral, to fly inside Uruguay. And because of shortcomings in Uruguay's air traffic control, the newspaper El Observador reported, Pluna can't fly close to the coast, increasing the cost of its Buenos Aires-Montevideo route by 30 percent. All of these factors have contributed to Pluna's losses, but it was the abrupt disappearance of Argentine passengers in the last few weeks that prompted the letter, said a Uruguayan executive in a position to know about the airline's negotiations with the government. The executive, who insisted on speaking anonymously because of the sensitive nature of the bailout, said options under discussion include bringing in new investment, taking on more debt, reducing costs and finding ways to boost revenue. But improving its situation isn't something Pluna can accomplish alone, he said. "For months now, the government has said it wants to invest more and the private partner is saying that it has no problem with investing more, as long as some of conditions change so that Pluna can be more competitive," he said. The lack of access to Argentine destinations, which are now dominated by Aerolineas Argentinas and Austral, runs counter to a South American trade agreement that Argentina signed along with Uruguay establishing reciprocal access to each other's destinations. The executive said the member countries confronted Argentina on this point during their last summit, but the government of Argentine President Cristina Fernandez still refuses to comply. Pedro Apezteguia, a top official at Uruguay's economy ministry, told The Associated Press that the government will do all it can short of giving preferential treatment to Pluna or any other company. As for Argentina's restrictions, "it's a sovereign country," he said. "There's little the Uruguayan government can do about the resolutions of the Argentine government." Campiani said Pluna has fallen victim to a price war as Aerolineas Argentinas and TAM sell tickets for Buenos Aires-Sao Paulo flights at just $180, compared to $300 a year ago, despite higher costs. But these larger carriers also face cutthroat competition: Brazilian budget airlines Trip and Azul now plan to merge, angling for position in the battle for their country's expanding middle class. Ricardo Marenco, duty manager for Pluna at Montevideo's gleaming new international airport, said Monday that he was relieved to get such an honest accounting of the company's challenges from its CEO. "It's a feeling of support," Marenco told The Associated Press. "Without a doubt, before the letter there was a general feeling of deep concern, and now people are less anxious, and sticking together. Not just with him, but with the group, with our fellow employees." Curt Lewis, P.E., CSP, FRAeS, FISASI CURT LEWIS & ASSOCIATES, LLC