_Madhu Unnikrishnan madhu_unnikrishnan@aviationweek.com

_Madhu Unnikrishnan madhu_unnikrishnan@aviationweek.com
Aeromexico Granted Extension Of US. Route Authorities 
By the terms of the U.S.-Mexico bilateral agreement, Aeromexico must apply for permission to serve routes between the two countries.
American Reports $44 Million Net Income For January 

American Airlines reported $44 million in net income for January, after taxes and interest expenses were deducted.

The carrier, which is restructuring under Chapter 11, earned $2.09 billion in January, according to a filing with the U.S. Securities and Exchange Commission. Operating income totaled $91 million. American reported no restructuring charges for the month.

ICAO Can Create ETS By September, EU's Hedegaard Believes 

The EU is banking on the International Civil Aviation Organization (ICAO) to create a global, market-based system to combat aviation’s greenhouse gas emissions and believes the next six to eight months will be sufficient time for the U.N. body to do so, says Connie Hedegaard, European commissioner for climate action.

FAA Approves San Juan Airport Privatization

The FAA has issued its final approval for the privatization of Luis Munoz Marin International Airport in San Juan, Puerto Rico.

Russia, U.S. To Hold Bilateral Talks In August 

The U.S. and Russia will return to the negotiating table in late August to reassess the existing bilateral air services agreement, a source close to the State Department tells Aviation Week.

The two sides earlier this month resolved some overflight issues and granting more frequencies to U.S. carriers, although this agreement only is effective until early 2014, so new overflight frequencies must be negotiated, the source says.

House Hearing On AMR-US Airways Merger Focuses On Hubs 

Members of the House Judiciary Committee’s subcommittee on regulatory reform, commercial and antitrust law grilled American Airlines and US Airways executives on whether the new American would maintain all its hubs if the merger is approved.

ICAO High-Level Group Faces Looming Deadline 

The High Level Working Group (HLG) tasked by the International Civil Aviation Organization (ICAO) to evaluate market-based measures for aviation greenhouse gas emissions has yet to reach a consensus just weeks before it is expected to produce a proposal, several industry sources tell Aviation Week.

The HLG is scheduled to meet March 25-27 in Montreal to produce a emissions reduction package for the ICAO Council to consider in June. The Council then is scheduled a proposal to the full ICAO General Assembly in September.

Boxer, Sanders Introduce Climate-Change Legislation 

Sens. Barbara Boxer (D-Calif.) and Bernie Sanders (I-Vt.) have introduced a pair of climate-change bills that could raise the cost of fuel significantly for airlines.

The bills are similar to legislation introduced by Reps. Henry Waxman (D-Ore.) and Edward Markey (D-Mass.) in 2010 in that they would impose a carbon-dioxide tax on fuel and other substances whose use creates greenhouse gas emissions.

The bills next will be considered by the Senate Environment and Public Works Committee, which Boxer chairs.

FAA Warns Of Tower Closures, Furloughs 
Sequestration will force the closure of 100 low-capacity air traffic control towers and end the midnight shift at 60 more, a joint letter from the heads of the FAA and U.S. Transportation Department details.
FAA 787 AD Focuses On Battery Modifications 
WASHINGTON - The FAA today issued an airworthiness directive requiring modifications of the battery systems on Boeing 787-8s before the aircraft can resume operations. This is the first acknowledgement that a battery modification could allow the aircraft to return to service. (Photo: United Airlines)
ALPA Expects Sequestration Will Hurt ATC 

Air Line Pilots Association President Lee Moak warns that looming federal budget cuts could affect the national airspace system for years to come.

The budget cuts known as “sequestration” that are scheduled go into effect on March 1 could immediately decrease spending on NextGen initiatives, says Moak. But a more serious, long-term issue could be the attrition of valuable FAA technical staff, the union chief warns.

Aircastle Worried About Narrowbody Production Effect On Profits 

Increased production of narrowbody aircraft by both Airbus and Boeing and the potential influx of airframes from Comac and Bombardier are depressing prices lessors can command for smaller aircraft, says Aircastle CEO Ron Wainshal.

“We remain concerned about increasing production of narrowbodies and freighters,” Wainshal told analysts Feb. 21 during the lessor’s 2012 earnings call. “The supply is putting pressure on demand,” he continued, adding that this currently is compounded by continuing economic woes in Europe and slowing global trade.

Teamsters Seek To Represent American Mechanics 
The airline division of the International Brotherhood of Teamsters and the Teamsters Aviation Mechanics Coalition are trying to wrest representation of American Airlines’ mechanics and related workers from the Transport Workers Union.
EU ETS 'Stop The Clock' Action Could Be Profitable For Airlines 
U.S. carriers could harvest a windfall profit from unused carbon allowances now that the European Union has “stopped the clock” on applying the emissions trading system to international aviation. (Photo: Delta)
American, US Airways Merger Decision Could Come Feb. 15 

American Airlines’ board of directors by Feb. 15 could announce a decision on a proposed merger with US Airways.

The Dallas/Fort Worth International Airport-based carrier’s bondholders currently are bound by a non-disclosure agreement (NDA), but this expires on Feb. 15, and union sources say it is likely that the decision on the merger will be announced once this NDA ends. Last month, American Chairman and CEO Tom Horton said the decision would be announced within weeks.

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