NABUCCO PIPELINE

Northern Iraqi gas production from the Pearl Production Co. could be available in five years to feed into the Nabucco gas pipeline and supply Europe, Austrian oil company OMV AG (OMV.VI) said Friday.

"Pearl is very important because they have access to a major gas field. It has the capacity to produce an important part of the supply of Nabucco," said the company's Chief Executive Wolfgang Ruttenstorfer at a press briefing in London. "The gas is there and could be available in five years."

OMV owns a 10% stake in Pearl.

The 3,300 kilometer Nabucco pipeline is an ambitious project that aims to open a new supply route for Central Asian and Middle Eastern gas to Europe via Turkey, Bulgaria, Romania, Hungary and Austria. The project has the backing of the European Union, which sees it as a way to reduce dependency on imports of Russian natural gas.

OMV, Germany's RWE AG (RWE.XE), Turkey's Botas, Bulgarian Energy Holding, Romania's Transgaz and Hungary's MOL Nyrt. (MOL.BU) are members of the Nabucco consortium. They plan to decide whether to proceed with the project in the fourth quarter of 2010, with operation due to commence in 2014.

Gas fields in northern Iraq could be developed in several years and linked fairly quickly to Turkey through an inexpensive feeder pipeline, Ruttenstorfer said. He added that he is confident that political tensions over energy exports from the Kurdish region of Iraq will have been resolved within the time frame of the Nabucco project.

The economic downturn that has left Europe with a surplus of gas has not fundamentally changed the viability of Nabucco, said Ruttenstorfer. "We are going to have an oversupply of gas in Europe for the next three to five years," he said, but after that the region will see its need for gas imports rising again.

The downturn has also had little impact on the projected EUR7.9 billion cost of the pipeline, said Ruttenstorfer.

Partners in the Nabucco consortium will need to secure around half of the pipelines planned 31 billion cubic meter a year capacity in order for the project to get the go-ahead as scheduled for the fourth quarter of 2010.

In addition to Iraq, around half this gas will probably have to come from Azerbaijan, so the decision from BP PLC (BP), Azeri state oil company Socar and their partners on whether to proceed with the second phase of the Shah Deniz gas project will be crucial, Ruttenstorfer said.

Many Nabucco consortium members are talking to the Azeris about gas supply, he said.

Ankara and Baku should resolve issues related to the price for natural gas in order to move forward with the Nabucco gas pipeline, U.S. officials said.

Richard Morningstar, the U.S. special envoy for Eurasian energy, warned that Nabucco companies could look for alternative options if Baku and Ankara cannot resolve their issues, the Azeri Press Agency reports.

"A failure to find an agreement would lead energy companies to search for different routes," he said.

Baku has considered raising the price of the gas purchased by Ankara from the Shah Deniz gas field.

The offshore Shah Deniz field has the capacity to produce 318 billion feet of gas from its initial phase, with another 706 billion cubic feet expected from Phase 2 by 2012.

Partners to the Nabucco gas pipeline for the European Union aim to diversify the regional energy sector by courting Central Asian and Middle Eastern suppliers to the project.

Morningstar told an audience at the European Policy Center in Brussels that outstanding price negotiations were moving forward, but the importance of a resolution could not be underestimated.

"We strongly encourage Turkey and Azerbaijan to agree on pricing terms because the agreement is needed to win the trust of the participating companies in the Nabucco pipeline project," he said.

Nabucco partners are eyeing Azerbaijan, Turkey and Iraq as potential suppliers for the project. Morningstar stressed that Iranian gas is not a consideration.

"Territorial integrity of Azerbaijan is as sacred as our own integrity.

The signed protocols will promote the restoration of relations between Armenia and Turkey and pave a way to peace and ensure territorial integrity of Azerbaijan. The protocols have already been submitted to the parliament and it is for parliament to decide when to ratify them", ANS-TV quoted Turkish FM Ahmed Davutoghlu as saying answering the question of the Turkish deputy from opposition People’s Republican Party Janan Aritman.

"The events that occurred in the Caucasus in August 2008, proved that the situation threatening to security, stability and interaction, is prevailing in the region. In this view, we have proposed the Caucasus Stability and Cooperation Platform and invited all the countries which are parties to the conflict, including Armenia, to join the platform. We have initiated a dialogue with Armenia which has accelerated recently. The Turkish-Armenian protocols signed on October 10 are not harmful for the Azerbaijani interests", he said.

Janan Aritman asked whether Nabucco project will be stopped with the opening of the Turkish- Armenian border. When answering the question, Davutoghlu said Nabucco project has nothing to do with normalization of relations with Armenia.

Kazakhstan wants to leave politics out of the equation and make a profit when dealing with the transport of hydrocarbons, the country’s foreign minister told five visiting western journalists at his lavish ministry in Astana. “The fundamental principle from which we are proceeding on exporting our resources is the principle of economic feasibility - no politics there. We have exported and will be exporting in any direction that is profitable for us,” Kanat Saudabayev said on 23 November. He was responding to a question from New Europe on whether the energy-rich former Soviet republic had any preference over Russian, Chinese or EU-bound projects competing for its rich oil and gas resources.
The relatively new foreign minister reminded that the Turkmenistan-Kazakhstan-China gas pipeline is due to be inaugurated on December 15 and there is already an oil pipeline from western Kazakhstan to western China. Kazakhstan also exports its oil through a whole system of pipelines running through Russia (CPC). Moreover, Kazakhstan ships oil through the Aktau-Tbilisi-Ceyhan pipeline system.
“Given that we will be producing 170 million tons of oil out of which 130 million tons of oil will be available for exports it is in our deep interests to see the multiple export pipelines realized,” Saudabayev said. The bulk of the new volumes would come from Kashagan’s massive oil field, which plans to start commercial production around 2015. “Kazakhstan is and has been turning into a more significant player on the energy market for the European consumers and we will continue to export oil resources through those means that are profitable for us. Kazakhstan as a partner has always been distinguished by its reliability and predictability,” Saudabayev said.
The question is how this oil will be transported. There are several options, including the expansion of the CPC pipeline to Novorossiysk and also using the route to China.
Regarding the issue of bypassing the crowded Bosporus, the Burgas-Alexandroupolis oil pipeline seems to have stalled. Russia seems to prefer the Samsun-Ceyhan pipeline route through Turkey due to foot-dragging by Bulgaria but also to lure Turkey into supporting the South Stream gas pipeline over Nabucco, Chris Weafer, chief strategist at Uralsib bank, told New Europe from Moscow.
“I assume that both by-pass pipes will eventually be built to cut congestion in the Bosporus. Russia will want to send more shipping with non-oil cargos via the narrow channel as it expands the economy and operations at Novorossiysk port. So it needs to divert as much oil into pipes as possible as quickly as possible,” Weafer said. Kazakh President Nursultan Nazarbayev supported Samsun–Ceyhan during his latest visit to Turkey.
Asked by New Europe if Kazakhstan was economically interested in the Nabucco pipeline, Kazakhstan’s Minister of Economic Affairs and Budget Planning Bakhyt Sultanov said that his country is interested in different ways to export its oil and gas resources. “In the case of Nabucco the main question is resources. If we’ll have resources we can sell through Russia, through Nabucco, though our partners,” he said at the sidelines of a forum to discuss Kazakhstan’s OSCE chairmanship and its priorities.
For now, it seems as if Nabucco has been out-maneuvered by Russia and China and is in real danger of having nowhere to turn to for gas supplies. “The commercial case for South Stream and Nabucco looks increasingly unsound,” Weafer said. “They are both now political projects.”

DUBAI OVERBLOWN

Dubai media and several business leaders rallied to support the Gulf Arab emirate's efforts to manage its debt crisis, saying problems have been exaggerated and the impact of restructuring overblown.

Riad Kamal, chief executive of Arabtec ARTC.DU, said he had no doubt about Dubai's commitment to settle its debt.

"Dubai should be given time to restructure its debt. I'm not going to lose sleep over this issue," he said.

The crisis began on Wednesday when Dubai, part of the United Arab Emirates federation, asked to delay payment on billions of dollars of debt issued by conglomerate Dubai World and its main property subsidiary Nakheel, developer of palm tree-shaped islands that once attracted celebrities and the super-rich.

"I am very relaxed. Dubai has never defaulted and it will not default," Khalaf Al Habtoor, chairman of Al Habtoor Group, told Reuters by phone. "I am confident the government will meet its commitments and help the companies."

An executive at Emirates NBD ENBD.DU, one of the region's largest banks, also sought to minimise the impact, saying: "It's business as usual and there's nothing to worry about."

Nevertheless, Dubai's share index fell 5.9 percent in early trading, while DP World DPW.DI plunged 14.9 percent when UAE markets opened for the first time since the debt repayment delay was announced. Abu Dhabi's bourse also declined, losing 7.1 percent to 2,703 points.

The president of Emirates airline told London's Sunday Telegraph in an interview that he was shocked by the global fallout, but said: "Dubai will navigate itself out of this, as will we." He said the carrier would not be affected.

The English-daily Khaleej Times newspaper said the Dubai government had taken a hard look at the way Dubai Inc. operates, and will fix what has not worked.

"The need to restructure Dubai World is for real, and the decision to go ahead with it indicates maturity on the part of the emirate's decision-makers," the paper said in an editorial.

Khaleej Times defended the goverment from critics who said the announcement, made just before a four-day Eid al-Adha holiday, had undermined Dubai's credibility and transparency. "The timing of the announcement of a possible six-month delay in repaying the group's debt can be debated by market-makers, but not the intention behind it," it wrote.

OVERBLOWN

Some bankers and investors also believe last week's Dubai World restructuring announcement was blown out of proportion.

"The crisis itself has been exaggerated. It is very much localised in one sector and one group. It has been escalated to a much bigger issue," Suresh Kumar, chief executive of Emirates NBD capital said.

Ajman Bank AJBNK.DU, one of the UAE's smallest banks, said it would pursue its plan to open a Dubai branch in December.

"Since the start of the global crisis, this is not the first time a postponement has been announced in a world economy like Dubai," Ajman Bank's acting CEO Ali Alshaqoosh Al Mueen told Reuters. "The decision will certainly have been taken after a thorough review of all resulting benefits and outcomes."

Some executives at international banks active in the region also voiced confidence in Dubai.

Michael Geoghegan, HSBC Group chief executive, said in a statement at the weekend he was "confident that the leadership of Dubai and the UAE will overcome any short-term issues they face, which appear to have been somewhat sensationalised, and continue to lay the foundations for sustainable growth."

Mounir Husseini, Deutsche Bank's chief country officer for the UAE and Qatar, said in an email statement: "It is clear to me that the leadership of Dubai, supported by Abu Dhabi, is committed to taking the right steps for the UAE."

Amid a global financial-market rout, Dubai's announcement Wednesday that it would seek to delay debt payments represents the latest setback for the city-state's ruler, Sheik Mohammed bin Rashid Al Maktoum.

Last week's market mayhem was compounded by a lack of transparency from Dubai over the standstill request. A five-paragraph statement from the Dubai Department of Finance provided few details. A spokesman for the department said he couldn't comment further. A spokesman for the ruler's court didn't respond to a request for comment.

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Associated Press

Sheik Mohammed bin Rashid Al Maktoum, front right on Nov. 15, was briefed as Dubai World's troubles emerged.

Late Thursday night, Sheik Ahmed bin Saeed Al Maktoum, a senior Dubai finance official and the chairman of the Emirates airline, said in a statement that the standstill announcement had been carefully planned and promised more details this week. "This is a sensible business decision," he said.

Over the last several decades, Dubai's debt piled up as government-related companies borrowed to fund development at home and acquisitions abroad. Bankers and credit analysts assumed government support from Sheik Mohammed -- and from the federal government in Abu Dhabi -- if they ever overextended.

But when the global financial crisis hit, foreign investors fled Dubai's property market, a pillar of the economy. Unease over Dubai's debt turned into global concern, and the cost of insuring Dubai debt against default started to rise sharply. Developers, many of them state-owned, saw their cash flow disappear. Buyers, who could put as little as 10% down, stopped paying installments. Builders started complaining about missed invoices.

In February, Dubai orchestrated a novel $20 billion bond program, of which the first $10 billion tranche was fully subscribed by the U.A.E. central bank.

Dubai said it would use the money to meet its own debt obligations and unpaid bills by developers. The U.A.E. offered more, but Dubai turned down the offer, according to one person familiar with the situation.

But just as investors started to breathe easier because of the big show of federal support, Sheik Mohammed dumped his new finance chief with no explanation.

Still, Dubai made its debt payments on time. In June, Dubai World, the biggest of Dubai's corporate entities, brought in restructuring outfit Alix Partners Ltd. to advise on an overhaul.

In mid-October, Dubai World said it would shed thousands of jobs and launch a major cost-cutting effort. Selling assets quickly wasn't a real option. Many of the company's businesses were still valuable but illiquid, according to a person familiar with the situation. The company wanted to avoid a fire sale, this person said.

Amid the restructuring effort, Sultan Ahmed bin Sulayem, the chairman, was aloof, according to this person. His deputy, Jamal bin Thaniah, appointed chief executive in October, took on a more active role, this person said. Mr. Sulayem hasn't responded to requests for comment. A spokesman for Dubai World said he wasn't available.

A $3.5 billion sukuk, or Islamic bond, was coming due in December. While Dubai World signaled in the spring that a debt restructuring was an option, investors and analysts continued to expect a bailout.

In a letter to employees of Dubai World earlier this month, Mr. Sulayem said the Dubai government had assured the company "full support as an iconic company serving its role in the government's vision for the future."

A Dubai World spokesman declined to comment on the letter, except to say the company would continue to communicate with staff about the restructuring. "A restructuring process has been under way for some time and it continues," he said.

Earlier this month, Dubai's top officials gathered for a meeting of Sheik Mohammed's royal court, according to a person familiar with the situation. At Zabeel Palace, surrounded by manicured gardens, statues of prancing horses, and flittering peacocks, Sheik Mohammed was briefed on the extent of Dubai World's troubles, this person said.

In the days that followed, Sheik Mohammed announced the removal of several top economic advisers from key positions. Then on Wednesday, Dubai announced it had raised $5 billion in debt commitments from two Abu Dhabi-controlled banks. Investors interpreted the move as another indication that the federal government would come to Dubai's rescue if needed. Two hours later, Dubai came out with its standstill announcement.

U.S. stocks fell more than 1 percent in a truncated session on Friday as a possible debt default by a Dubai state-owned conglomerate led to fresh concerns about the global financial system.

The sell-off was broad, with selling concentrated mainly in the financial and commodity-linked sectors as investors trimmed positions in areas of the market most sensitive to economic uncertainty.

That hit stocks like aluminum producer Alcoa Inc , down 2.6 percent, and Bank of America , down 3 percent.

But after a slide of more than 2 percent at the open, the flight to less risky assets seemed to be subsiding, helping the major U.S. stock indexes ease back up off their lows. The U.S. dollar, which had jumped sharply as investors looked for a safe haven, pared gains and commodity prices stabilized.

The news out of the Middle East coincided with the desire by many investors to lock in 20 percent year-to-date gains in the S&P 500 after a terrible year in 2008.

"It is at least an early indication of whether investors believe this is one-time bad news or the tip of something really bad," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "Right now, it looks like investors are taking the optimistic stance."

The Dow Jones industrial average <.DJI> dropped 154.48 points, or 1.48 percent, to end at 10,309.92. The Standard & Poor's 500 Index <.SPX> fell 19.14 points, or 1.72 percent, to 1,091.49. The Nasdaq Composite Index <.IXIC> lost 37.61 points, or 1.73 percent, to 2,138.44.

For the week, the Dow dipped 0.1 percent, while the S&P 500 edged up 0.01 percent and the Nasdaq slipped 0.4 percent.

Volume was light on the day after Thanksgiving. The U.S. stock market shut on Friday at 1 p.m. (1800 GMT), which was three hours shy of its normal closing bell, but the number of declining stocks still towered over those advancing.

Standard & Poors Puts Four Dubai Banks on Credit Watch

Dubai banks Emirates Bank International PJSC, National Bank of Dubai, Mashreqbank PSC and the Dubai Islamic Bank PJSC have all been put on credit watch by Standard & Poor's rating agency after the city state's largest corporate entity, Dubai World, asked creditors for a six-month standstill on debt repayments.

The agency has placed its CreditWatch on the the 'A-' long-term rating for the four banks while affirming its 'A-2' short-term ratings on Emirates Bank International, National Bank of Dubai and Mashreqbank.

"The rating actions reflect the large exposure these banks have to Dubai World and Nakheel, and more generally to Dubai-based government related entities, and the risks that the standstill agreement would pose to these banks," said S&P credit analyst Mohamed Damak.

"This comes at a time when the deteriorated economic environment, including the fall of real-estate prices, has already started to weigh on the financial profile of these banks," he added.

Asset quality indicators are also expected to worsen as some of these banks have exposure to Ahmad Hamad Al Gossaibi Brothers and Saad Group, which defaulted on their obligations earlier in 2009.

Dubai's Woes Shake U.A.E. Region

Investors remained rattled, two days after the government said it would take charge of restructuring its corporate flagship, Dubai World, and asked creditors to accept delayed payments.

The dollar and the yen roared higher Friday as the fallout from the Dubai debacle continued to resonate through global financial markets. Proving that gold doesn't always benefit during bouts of risk aversion, gold fell 4% along with a decline in crude oil and a drop in equities.

Meanwhile, equities markets across Asia fell sharply Friday. Japan's Nikkei 225 Average fell 3.2% to 9081.52, its lowest close since July. In Hong Kong the Hang Seng Index plunged 4.8% or 1075 points to 21134.50, led down by banking stocks. HSBC Holdings shares in Hong Kong fell 7.6% and Standard Chartered shares closed down 8.6% on news the banks were directly exposed to Dubai's debt problems.

European shares, which droped sharply Thursday, rebounded from early session lows Friday ahead of the U.S. stock market open, suggesting that the selloff on Dubai World's debt worries was overdone. The U.S. stock market is reopening Friday after the Thanksgiving holiday on Thursday. (See complete markets updates at WSJ.com/markets.)

A Wednesday announcement of a six-month standstill in debt payments took investors and analysts by surprise. It followed months of positive moves and comments from government officials suggesting Dubai and the federal government of the United Arab Emirates were willing to step in to plug financing holes.

"The most negative effect of [the] announcement is a major shock to confidence in the U.A.E. and the region more generally," said Richard Fox, a credit analyst at Fitch Ratings in London. "People will now question government support."

Amid a scramble by international bankers and analysts to assess global exposure to Dubai, the company said Thursday that its cash-generating ports division, DP World, wouldn't be included in the restructuring.

Company executives and representatives didn't respond to requests for comment. Sheik Ahmed bin Saeed al Maktoum, head of Dubai's finance committee, said in a statement Thursday that "our intervention in Dubai World was carefully planned and reflects its specific financial position," according to Zawya Dow Jones. "We understand the concerns of the market and the creditors in particular. However, we have had to intervene because of the need to take decisive action to address its particular debt burden," he said, promising more details next week.

Dubai's standstill request is one more troubling development for international banks, which turned in recent years to the oil-rich Middle East as a source of income. Both local and international banks also are licking their wounds from the debt troubles this year of two big family-run Saudi Arabian conglomerates, which owe more than 100 lenders a conservatively estimated $15 billion.

Dubai World is seeking a six-month moratorium on interest payments, a person familiar with the matter said. During that time, it could negotiate with creditors a restructuring that would pare liabilities, which include $20 billion of loans and bonds coming due in the next 18 months, according to estimates. If the lenders don't agree, Dubai World will default on the notes, the person said.

The banks with the greatest exposure to Dubai World are Abu Dhabi Commercial Bank and Emirate NBD PJSC, people familiar with the matter said. Executives at the two banks weren't available for comment Thursday.

Among the international banks that have large exposure are the U.K.'s Royal Bank of Scotland Group PLC, HSBC Holdings PLC, Barclays PLC, Lloyds Banking Group PLC, Standard Chartered PLC and ING Groep NV of the Netherlands, the person said.

RBS has lent roughly $1 billion to Dubai World, another person said.

Barclays's exposure to Dubai World is roughly $200 million, and that exposure is effectively hedged, according to people close to the matter.

Despite the surprise, people close to the banks said they still believe Dubai, or its neighboring emirate, Abu Dhabi, won't risk tarnishing their images further by leaving foreign creditors in the lurch, and will agree to a reasonable plan.

Standard & Poor's put four Dubai's banks on credit watch because of their exposure to Dubai World. The cost of insuring against a Dubai default rose to $547,000 a year per $10 million in debt from $318,000 on Tuesday, according to CMA, a credit-data provider.

Holders of a $3.5 billion sukuk, or Islamic bond, issued by Dubai World property subsidiary Nakheel, due next month, face the most immediate threat. Nakheel bonds dropped from about 110 cents on the dollar before the news Wednesday to about 70 cents.

Investors assumed that the cash coming from the United Arab Emirates would give Dubai ample ability to pay off the Nakheel bond, and Dubai also had sent signals that it was willing to support its corporate entities.

A problem now, observers said, is that the circumstances behind Dubai's moves are murky, making it hard to gauge the exact risk to the bonds and Dubai's own general creditworthiness.

"The uncertainty may drag on for some time yet, before we have a clear idea as to how issues will be resolved," said Huw Worthington, an analyst at Barclays Capital in London.

On Wednesday, the government of Dubai said in a statement that it appointed Deloitte LLP to spearhead an overhaul of the company, effectively sidelining current management. All year, Dubai World has been shedding jobs and cutting costs. That didn't appear enough for government officials.

A spokeswoman for the Dubai government's Department of Finance said on Wednesday that "the Dubai government decided it needed to take a more proactive role."

Dubai World Chairman Sultan Ahmed bin Sulayem would remain in place, she said.

Dubai World has served as Dubai's main driver of growth, operating a globe-spanning ports and transportation group and spearheading real-estate and infrastructure projects at home and abroad.

Real-estate subsidiary Nakheel built Dubai's iconic palm-tree-shaped island, packed with luxury villas and hotels, many still under construction. With little oil, Dubai financed much of this with debt.

Sony Bets On 3-D To Drive TV Sales

Sony Corp. expects new 3-D compatible televisions will account for up to half the TVs it sells in roughly three years, as it outlined details of its effort to prop up its slumping electronics business.

Hiroshi Yoshioka, Sony's executive deputy president and the head of its consumer products and devices group, also said the company is holding talks with several auto makers to enter into the promising but crowded market for lithium-ion car batteries. He didn't name the auto makers. Most of a $1 billion investment in battery technology over the next few years will go toward car battery development, he said, adding that Sony has also increased staffing in that area.

A Sony Corp. 3-D television and videogame demonstration in October.

the Japanse company offered last week, when Sony outlined plans to rely heavily on 3-D technology and online content to reach an operating profit margin of 5% in the fiscal year ending in March 2013.

Sony has already said it targets revenue of more than one trillion yen (about $11.4 billion) from 3-D related products, including televisions, disk players and game consoles, in that fiscal year. The company plans to introduce a 3-D compatible television next year, and Mr. Yoshioka said Thursday those types of sets will account for between 30% and 50% of all televisions sold by the fiscal year ending in 2013. The technology lets viewers choose to watch in the current two-dimensional mode or three dimensions on their TVs while wearing special glasses.

Sales results will depend on available 3-D content, Mr. Yoshioka said, adding that he sees strong potential in videogames. Sony said 3-D television models will be priced at a premium, but it says the glasses required for viewing would be the most costly part for Sony, not the actual production of the television.

In batteries, Sony plans to play up the products' safety. Mr. Yoshioka said the batteries that the company developed after its battery problems of the past enabled Sony to create a safer product. Sony and a number of other companies were plagued in recent year by instances of batteries in consumer products like notebook computer catching fire.

Sony believes the market for batteries is big and promising enough for it to enter, even if it is currently lagging other manufacturers. "We have lots of room," said Mr. Yoshioka. Sony says it currently has about 2,000 employees working in the battery business, but plans to increase that figure.

Under Chief Executive Howard Stringer, Sony is moving to shake up a company plagued by shortcoming in the content and software side of the business and high costs on its manufacturing side. It has forecast an operating loss of 60 billion yen (about $684 million) for the current fiscal year, but Mr. Stringer said the company is striving to break even through cost cuts and other initiatives.

Chinese economic growth

China's top leaders pledged Friday to continue focusing on economic recovery next year and to maintain a basically accommodative policy stance, a statement that will likely reassure domestic businesses and financial markets that it supports continued growth.

The assurance comes amid growing calls from economists for Beijing to start scaling back its moderately loose monetary policy as the economy has staged a robust rebound.

While saying it will continue its monetary policy stance and active fiscal policy next year, the Political Bureau of the Communist Party, or Politburo, has nonetheless left itself some wiggle room.

"We will maintain the continuity and stability of macro-economic policy," the Politburo concluded in a meeting chaired by President Hu Jintao, according to a report on the state television Web site.

"We will maintain our basic macro-economic policy stance, managing well the intensity, pace and focus of implementing policy...to increase the stability, balance and sustainability of economic growth."

As part of efforts to improve the composition of economic growth, the Politburo said it will pay closer attention to transforming how China grows and to economic restructuring, and will also work to boost domestic consumption next year.

The renewed emphasis on restructuring comes as economic growth has returned to pre-crisis levels. The Politburo said the recovery trend has continued to firm.

Despite signs of stabilization in the global economy, U.S. and Chinese academics have urged Beijing to rely less on exports to the U.S. and more on domestic consumption for economic growth, an objective Beijing has also said it shares.

China will also maintain "reasonable" investment growth next year and improve policies to encourage private-sector investment, the report said. Because public investments have driven the rebound in growth this year, economists say a further pickup in private investment will help sustain growth even after the stimulus program ends at the end of next year.

Additionally, China will improve its policies to stabilize external demand for Chinese products and seek to expand imports, in an attempt to promote a steady increase in foreign trade, the report said.

The government will nurture new sectors, including the services industry, encourage the participation of smaller firms in the economy, and increase its efforts to support innovation in China, as part of broader economic restructuring.

It will continue to improve its policies to help farmers and "do a good job of regulating the market for agricultural produce," the report said. Food prices can be major driver of inflation in China as they have a large weighting in the consumer price index, though the statement didn't mention inflationary risks.

Toyota, Sony, Exporters Are on ’Edge of Cliff’ on Yen

Toyota Motor Corp., Canon Inc. and Sony Corp. are among Japanese exporters that may miss their forecasts as the yen strengthens more than they anticipated, eroding their earnings from cameras, televisions and cars sold overseas, investors said.

Toyota, Sony and Canon, which generated more than 70 percent of revenue outside their home country last fiscal year, had projected the yen would average 90 to 95 to the dollar in the current period, based on their latest financial statements.

Canon Chief Executive Officer Fujio Mitarai, who heads the nation’s biggest business lobbying group, said Japan is “standing on the edge of a cliff” as the yen trades at its strongest against the dollar in 14 years, climbing to as high as 84.83 today. The stronger yen may widen the earnings rift between Japanese and South Korean manufacturers after Samsung Electronics Co. and Hyundai Motor Co. reported record quarterly profits.

“Intervention is necessary,” said Koichi Ogawa, chief portfolio manager at Tokyo-based Daiwa SB Investments Ltd., which manages $39.4 billion in assets. “Companies may be forced to cut their forecasts if the yen continues to gain further.”

The Topix Electric Appliances Index, which includes Sony, Canon and Panasonic Corp., fell as much as 3.5 percent and led the broader Topix index lower. The Topix Transportation Equipment Index tumbled as much as 3.1 percent to a four-month low.

‘Breaking Point’

Japan’s electronics companies lose a combined 31.8 billion yen ($369 million) in annual operating profit for each 1 yen appreciation against the dollar, according to a Daiwa Research Institute Ltd. estimate of 44 companies in September.

“We’re at a breaking point,” said Jesper Koll, chief executive officer of hedge fund TRJ Tantallon Research Japan. “There’s a point beyond which businesses don’t work.”

Canon’s Mitarai told reporters today Japan needs “urgent steps to counter this critical situation.” Canon would lose 4.4 billion yen in sales and 2.5 billion yen in operating profit in the three months ending Dec. 31 for every 1 yen gain against the dollar, according to the company.

“If the stronger yen becomes a long-term trend, it may affect our earnings,” Mami Imada, a Tokyo-based spokeswoman at Sony, said by phone today.

Limited Immediate Impact

Sony’s Imada and Sharp Corp. spokeswoman Miyuki Nakayama said the impact on earnings may be small for the current fiscal year because they use forward contracts to hedge currency risk. Panasonic probably won’t be affected through the end of the year even if the yen were to stay at 85 per dollar, spokesman Akira Kadota said.

Still, Panasonic PresidentFumio Otsubo told a government panel yesterday that he didn’t want to look at newspapers because of the strengthening yen and weakening South Korean won.

Should the Japanese currency stay at about 85 yen to the dollar, Toyota’s operating loss may widen by 90 billion yen in the fiscal second half and force the world’s largest carmaker to move more manufacturing outside Japan, said Mamoru Kato, an auto analyst at Tokai Tokyo Research Center in Nagoya, central Japan.

Yuta Kaga, a spokesman at Toyota, which estimated the yen will average 90 yen against the dollar during the six months ending March 31, said the current exchange rate may push down earnings. The company’s annual operating profit, or sales minus the cost of goods sold and administrative expenses, is reduced by 30 billion yen when the Japanese currency rises 1 yen against the dollar, according to the company.

Japan vs. Korea

The currency appreciation may spur corporate bankruptcies early next year by hitting domestic demand-based industries in Japan, said Nobuo Tomoda, an official at Tokyo Shoko Research Ltd. “While personal spending is in a slump amid deflation, companies such as retailers and services industries may struggle to survive.”

A stronger yen weighs on prices by making imports cheaper, pressuring domestic producers to discount goods to avoid losing customers.

Not all carmakers may reduce their estimates. Honda Motor Co., Japan’s second-largest automaker, and Nissan Motor Co. based their second-half earnings forecasts on the assumption the yen will trade at 85 to the dollar.

Korean Exporters Helped

The won has fallen 20 percent against the dollar and 37 percent against the yen in the past two years, helping South Korean exporters gain U.S. market share from Japanese rivals.

Sony and Panasonic, the world’s two largest makers of consumer electronics, have eliminated more than 48,000 jobs since September last year, as they struggle to compete against Samsung, Asia’s largest maker of chips and flat screens. Suwon, Korea-based Samsung reported record profit in the second quarter, citing a global economic recovery that spurred a rebound in prices.

Toyota and Honda, Japan’s two biggest automakers, have said they may increase overseas production as the stronger yen makes exports less competitive. Japanese carmakers have lost market share to South Korea’s Hyundai, which posted a record profit in the second quarter.

Shift Production Overseas

Toyota Executive Vice President Takeshi Uchiyamada said last month the company must “think about producing overseas what is now being produced in Japan.” Nissan, Japan’s No. 3 automaker, will fully use its production capacity in the U.S. and Mexico in the “very short term,” Nissan Chief Executive Officer Carlos Ghosn said at last month’s Tokyo Motor Show.

“An impact would be inevitable if the yen strengthens more,” Shigeru Jibiki, a spokesman for Mitsubishi Motors Corp., said today. “We’ll continue to cope with the situation by promoting cost reduction.”

“We’re not very concerned about a higher yen,” said Megumi Tezuka, a spokeswoman at All Nippon Airways Co., Japan’s second largest airline, which projects the local currency will average 95 yen a dollar in the fiscal second half. “We may have a drop in revenue but that should be covered by cheaper purchasing costs from abroad.”

Jet kerosene, priced in dollars, was ANA’s largest operating expense last fiscal year, accounting for 25 percent of its air transportation costs, according to the company’s figures.

Dubai’s Debt-Payment Delay

Ten-year Treasury yields fell to the lowest level in eight weeks as the yen strengthened to a 14-year high versus the dollar, boosting speculation the Bank of Japan will intervene in the currency markets. Treasuries headed for a third weekly gain as economists forecast the Federal Reserve will keep interest rates near zero until the third quarter of next year. U.S. markets were shut yesterday for the Thanksgiving holiday.

“There is a spike in risk aversion and Dubai was the trigger for that,” said Karsten Linowsky, a fixed-income strategist at Credit Suisse AG in Zurich. “It’s bullish for Treasuries and this will likely dominate today.”

The yield on the benchmark 10-year note fell 8 basis points to 3.20 percent as of 10:18 a.m. in London, according to BGCantor Market Data. It slid earlier 12 basis points to 3.15 percent, the biggest decline since Oct. 30. The yield has declined 17 basis points this week. The 3.375 percent security due November 2019 rose 21/32, or $6.56 per $1,000 face amount, to 101 16/32.

Dubai World, the government investment company burdened by $59 billion of liabilities, will ask all creditors for a “standstill” agreement as it negotiates to extend debt maturities, Dubai’s Department of Finance said two days ago in an e-mailed statement.

Stocks Slide

The MSCI World Index of shares slid 0.7 percent today after dropping 1.4 percent yesterday. Futures on the Standard & Poor’s 500 Index dropped 2.5 percent.

The cost of protecting European corporate bonds from default rose, according to traders of credit-default swaps.

Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings increased 23 basis points to 564, according to JPMorgan Chase & Co. prices at 7:18 a.m. in London. The index is a benchmark for the cost of protecting bonds against default and an increase indicates a deterioration in perceptions of credit quality.

Japan’s currency rose to 84.83 per dollar today, the strongest since July 1995, increasing concern the nation’s monetary authorities will intervene to curb further appreciation of the currency.

“People are scared and concerned about possible intervention,” said Yasutoshi Nagai, chief economist at Daiwa Securities SMBC Co. in Tokyo. The BOJ may sell the yen “and buy Treasuries, which will be a plus for Treasuries.”

Yen Intervention

Japan’s most recent intervention took place on March 16, 2004, when the central bank sold the yen. Finance Minister Hirohisa Fujii said on Nov. 26 the government needs to take action on “abnormal” currency movements, and Prime Minister Yukio Hatoyama said the same day the yen’s appreciation was due to weakness in the dollar.

Demand for Treasuries increased this week as Fed policy makers indicated the benchmark lending rate would remain near zero “for an extended period” as long as inflation expectations are stable and unemployment fails to decline.

“Most members projected that over the next couple of years, the unemployment rate would remain quite elevated and the level of inflation would remain below rates consistent over the longer run with the Federal Reserve’s objectives,” according to minutes of the Fed’s November meeting released Nov. 24.

Yield Curve

The difference between rates on 10-year notes and Treasury Inflation Protected Securities, or TIPS, which reflects the outlook among traders for consumer prices, narrowed to 2.14 percentage points from 2.19 percentage points last week.

The difference between two- and 10-year rates, known as the yield curve, widened 4 basis points to 2.56 percentage points today, according to data compiled by Bloomberg. Two-year year yields tend to follow what the Fed does with interest rates, while those on longer-maturity securities are more influenced by the outlook for inflation.

Treasuries of all maturities have gained 1 percent so far this month, according to indexes compiled by Merrill Lynch & Co.

The securities have handed investors a loss of 1.5 percent in 2009, headed for the first decline since 1999 as President Barack Obama borrows record amounts to fund spending programs and service deficits. U.S. marketable debt totaled $6.95 trillion in October, after climbing to a record $7.01 trillion in September.

Asian Markets and Dubai Worries

Stock markets fell across Asia on Friday as investors, spooked by news that Dubai was seeking to suspend some debt repayments, piled out of assets they considered risky.

The Hang Seng index in Hong Kong sagged 4.8 percent and South Korea’s key market gauge, the Kospi, fell 4.7 percent. The Nikkei 225 index in Japan and the Taiex in Taiwan dropped 3.2 percent. Banking shares were among the worst hit amid concerns about potential exposure to Dubai’s billions of dollars in debt.

Stock markets in Europe also headed lower during the morning, extending the falls they had suffered during the previous session. And Wall Street — which had been closed Thursday for the U.S. Thanksgiving holiday — was also set for a rocky day when markets reopen Friday.

The root of the latest turmoil was a surprise announcement on Wednesday from Dubai, one of the seven members of the United Arab Emirates, that it was asking banks to allow its main investment vehicle, Dubai World, to suspend its debt repayments for six months.

The announcement — the global high finance equivalent of a homeowner asking the bank to allow six months of skipped mortgage payments, presumably because the homeowner was out of cash — sowed fear of a contagion of instability that could roil markets that are only now recovering from the near cataclysm of the last year.

“This has sent shockwaves through the markets, even though the problems in Dubai have been known about for two years,” Emil Wolter, a Hong Kong-based strategist the Royal Bank of Scotland, said by phone from Paris.

“But it is not the trigger for a brand-new crisis. Yes, the magnitude of the situation is dramatic for Dubai. But Dubai is not America — and a property crisis in Dubai will not cause the same global crisis as a property crisis in the States.”

Still, the news stunned investors and caused markets around the world to swoon even as analysts struggled to explain which fears of contagion were legitimate and which were overwrought.

Some market experts noted, for instance, that while banks that have lent money to Dubai World could suffer significant losses if the company were to default on all or part of its $59 billion debt, worries about the sovereign debt of Middle Eastern countries swimming in oil reserves were unfounded.

Paul Schulte, head of multi-strategy research at Nomura in Hong Kong commented in a note on Friday: “Dubai was a carbon copy of Thailand’s disastrous foray as an ‘international financial center’ in the 1990s. Happily, the U.A.E. has oil. Thailand did not.”

Christopher Davidson, an expert in Gulf politics at Durham University in Britain, said Thursday: “Dubai was fairly much the worst example of overextension. It had the worst debt per capita in the world by far. I would like to put it down as a really enormous white elephant that doesn’t have much in common with the regular economy of a regular state.”

Still, in the mentality of the market, guilt by association can be a powerful force. Referring to the unexpected move by Dubai World, Mr. Davidson said, “It will tarnish the reputation of the Gulf region a bit, and it will certainly make investors more bearish again about emerging markets.”

Bank shares were among the worst hit by the global nervousness amid concerns that some might have sizeable exposures to the affected debt.

In Hong Kong, HSBC and Standard Chartered — British banks that both have large operations in the Middle East — fell 7.6 percent and 8.6 percent, respectively. Both declined Friday to comment on what exposure they had to Dubai, and Standard Chartered added that it would issue a statement “if there was anything material to disclose.”

Mr. Schulte said he believed the two banks had “insignificant exposure to Dubai.”

Like many Western consumers during the good times, Dubai gorged on debt and borrowed too much to finance a building boom that has gone bust in the downturn. When credit markets froze last year, Dubai, like Iceland, found itself overextended. But Dubai, which has little oil, was backed by its Arab emirate neighbors. At least that is what investors had assumed.

The shock announcement on Wednesday upended the assumption that Dubai would stand behind Dubai World and that other emirates, especially Abu Dhabi, would stand behind Dubai.

Saud Masud, head of research at UBS in Dubai, said Thursday that negotiators would feel pressure to reach some kind of deal to present to the markets before trading in the region resumes next week after the Eid holiday. The Dubai government’s total debt is estimated at about $80 billion, of which, Mr. Masud estimated, about two-thirds is held by local investors.

Mr. Schulte of Nomura commented in his note that, in his view, “it is not a matter of when but at what price Abu Dhabi will bail out Dubai.”

And Mr. Wolter of RBS said he believed Abu Dhabi would have no choice but to ultimately come to Dubai’s rescue. Until that becomes clear, though, he said, markets would remain extremely nervous.

On Friday, the price of oil, already undermined by the uncertain outlook for global recovery, fell to below $74 per barrel.

On the foreign exchange markets, the Japanese yen briefly hit ¥84.82 to the dollar — its strongest level against the U.S. currency in 14 years — prompting the country’s finance minister, Hirohisa Fujii, to say that he was “extremely nervous and watching the market carefully.”

“There’s no doubt the market has moved too far in one direction. Moves right now are extreme, and it would be possible to take appropriate measures,” he added, according to Reuters.

The dollar’s weakness has been broad-based, but is causing especial jitters Japan, whose economy is still struggling to emerge from a deep recession. A strong yen — which makes exporters’ good more expensive for consumers in the United States — is something Japan’s export-oriented economy can ill afford.

By late afternoon in Tokyo, the dollar had recouped some ground to trade at around ¥86.30, but it remains strong in comparison to earlier this year.

The dollar has fallen against Japanese currency for years, in part because of longstanding worries about the United States’ chronic trade imbalances and debt.

At the same time, the yen often strengthens in times of uncertainty, when Japanese investors tend to pull back on overseas investments and move their assets back to Japan. This explains why the yen has continued to appreciate despite the fact that the Japanese economy is in a deep funk, and interest rates there are ultra-low, said Patrick Bennett, a strategist at Société Générale in Hong Kong.

Mr. Bennett said he expected politicians to “ratchet up their tone” before potentially intervening in the markets. At the same time, he said, many exporters had by now learned to live with a stronger yen, meaning that the fall-out for them — and the overall economy — may not be as overwhelmingly negative as is commonly believed.

BRITISH AIRWAYS

After the markets closed on Thursday night, the British Airways board marched into a meeting in its head office, close to Heathrow, for what would prove to be a defining moment for the airline.

Earlier in the day, the board of Iberia had met in Madrid to agree the terms of a deal with the British carrier, 16 months after the two sides had announced that they were in merger talks. BA chief executive Willie Walsh had previously suggested that corporate governance – the make-up of the board – had been a sticking point in the discussions. But the talks accelerated after a change in management at Iberia over the summer. Antonio Vázquez, who took over the Spanish carrier, sold tobacco firm Altadis to Britain's Imperial Tobacco in 2008 and has a reputation as a dealmaker.

It also seems likely that huge losses incurred by both airlines had sharpened the focus of the two companies on getting a deal done. After little more than an hour, the BA board emerged and the agreement was in place. An announcement was put out by 8.30pm that evening.

The two sides hope the deal will return the combined group to profitability, allowing them to slash costs and improve buying power on the likes of fuel and aircraft, generating savings of €400m (£357m) a year. It would also create potential for higher revenue by offering a far wider range of routes to passengers, combining BA's strength across the Atlantic with Iberia's network across South America. "Consolidation is happening in our industry and it is critical that BA starts participating in that," Walsh said on Friday.

That is, if BA can sort out its pension deficit – thought to be about £2.6bn. Its schemes are subject to a valuation later this year, after which pension trustees and BA management will need to negotiate how much cash the airline needs to pump in to keep them afloat. Even then, the agreement will need rubber-stamping by the pensions regulator, which is not expected to make a ruling until next September, and the merger will not be completed until the issue is resolved. It has been a long courtship, and it will be a long engagement.

"It was a deal that was waiting to be done and that needed to be done," said one source close to the agreement. "Europe will ultimately be divided up into three or four full-service airlines and one or two low-cost carriers. Nine months ago, BA was talking about a merger with Qantas, a deal with Iberia and a transatlantic alliance with American. Qantas has fallen away … and Willie needed to pull off at least one of the others."

By Walsh's own admission, BA has been in a "fight for survival" for much of this year. Over the past decade, the airline industry has lurched from one crisis to another: the terrorist attacks of 2001, the threat of liquid bombs, Sars, swine flu and a soaring oil price. BA itself also suffered the troubled opening of its new base at Heathrow, Terminal Five, which most agree has now been turned into a success.

But it has been the global recession that has wrought the most damage: BA is losing £1.6m a day. Earlier this month, it reported half-year losses of £292m on top of record losses of £401m for the previous year. This will be the first time in the carrier's history that it has recorded two successive years in the red.

The deal with Iberia was broadly welcomed by the City. The new firm will generate annual revenues of £13.5bn – making it the third-largest airline in the world – carry 61.5m passengers and fly to 205 airports. It will be headquartered in London, although domiciled in Madrid for tax purposes, with Walsh chief executive and Vázquez as chairman. Both brands will continue to exist.

John Strickland, an airline consultant, says BA had been "feeling more and more left behind" as rivals Air France and KLM merged and Lufthansa absorbed Swiss International Airlines in 2005 and subsequently Brussels Airlines, Austrian Airlines and the British carrier BMI.

"Air France-KLM is the shiny example of an airline merger," he says. "It was a deal that wasn't blood-laden for staff. Whether it was pragmatism or foresight, they kept two brands and two functioning head offices. They looked at cost savings but it wasn't brutal in human terms and customers have been kept happy. But there has been an enormous upturn in revenue. It really has been a case of one plus one equals three… It is a model that has worked and is something that BA and Iberia will have learned from."

Walsh, 48, who joined BA in 2005, made his mark at Aer Lingus, where he joined as a pilot and worked his way up to chief executive. He turned the business into an aggressive low-cost operator and while he was there spent two years in Mallorca, where he ran Futura, a charter airline owned by the Irish group. His Spanish, apparently, is not so bad.

It seems unlikely that Walsh will have much pause for breath after sealing the deal. BA cabin crew have threatened a strike over job losses and changes to their terms; the airline is already cutting 4,900 posts. The unions are also a potential obstacle in the Iberia deal, seeking assurances that there will be no further compulsory redundancies in return for lending support. And BA is still awaiting a verdict from Washington and Brussels on its alliance with American Airlines.

"BA's problems are serious but they are arguably no worse than anyone else's," says Strickland. "And they are not paralysed, or twiddling their thumbs; they are working in a wide range of fields to improve the situation… And in the main, the staff have bitten the bullet and seen the need for change. Willie Walsh is very well regarded by investors and the deal with Iberia is a key plank in moving forward. It is a feather in his cap."

British Airways Engineering is British Airways Plc wholly owned maintenance organisation, providing a wide variety of engineering services to British Airways and a number of other airlines. It currently employs some 5500 staff at the main bases of LHR, LGW and more than 60 locations around the world.

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Through its world class component repair facilities, British Airways Engineering supports a vast range of Boeing and Airbus components, providing test, repair and overhaul capabilities to a number of airline and non airline Customers.

With a number of locations around the world our Line Maintenance division can offer EASA and FAA approved Engineers on a growing number of aircraft fleets including those not normally associated with the British Airways name.

British Airways Engineering is constantly adding to our portfolio of products and services that we can offer customers. Please see our latest product news.

British Airways plc is the flag carrier airline of the United Kingdom. It is headquartered in Waterside near its main hub at London Heathrow Airport and is the largest airline in the UK based on fleet size, international flights and international destinations. Its second hub is London Gatwick Airport. British Airways has discontinued all direct overseas flights from UK airports other than Heathrow, Gatwick and London City Airport. BA's UK passengers originating at non-London airports must now connect via London or use other airlines with direct services.

The British Airways Group was formed on 1 September 1974 through nationalisation by the Labour Government of the time. BA was formed from two large London-based airlines, BOAC and BEA, and two much smaller regional airlines, Cambrian Airways Cardiff and Northeast Airlines Newcastle upon Tyne. All four companies were dissolved on 31 March 1974 to form British Airways (BA) and almost thirteen years later, in February 1987, the company was privatised. The carrier soon expanded with the acquisition of British Caledonian in 1988 and Gatwick-based carrier Dan-Air in 1992. Despite being a primarily Boeing customer, British Airways placed a major order for Airbus aircraft in November 1998 with the purchase of 89 A320 Family aircraft. In 2007, the carrier placed its next major order, marking the start of its long-haul fleet replacement, ordering Airbus A380s and Boeing 787s. The centrepiece of the airline's long-haul fleet is the Boeing 747-400; with 54 examples, British Airways is the largest operator of the type in the world.

The formation of Richard Branson's Virgin Atlantic Airways in 1984 began a tense relationship with BA. In 1993, the fierce rivalry led to "one of the most bitter and protracted libel actions in aviation history" in which British Airways apologised "unreservedly" for a “dirty tricks” campaign against Virgin leading to them paying damages and legal costs. Until 2008 British Airways was the largest airline of the UK, measured by passenger numbers. In 2008 the airline carried 35.7 million passengers. Rival UK carrier EasyJet carried 44.5 million passengers in the same year, taking the title from British Airways.

British Airways is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. On 31 March 2009 the airline celebrated its 35th anniversary.

On 12 November 2009, British Airways confirmed that it had reached a preliminary agreement to merge with Iberia Airlines. The combined airline will become the world's third-largest carrier (after Delta Air Lines and American Airlines) in terms of annual revenue.

British Airways (BA) was created in 1972, when the British Overseas Airways Corporation (BOAC) and British European Airways Corporation (BEA) managements were combined under the newly formed British Airways Board. This effectively made British Airways into the national airline for the United Kingdom and due to the lack of competition, the new company began to exert its position and significance. BA was one of only two airlines to operate the supersonic Aerospatiale-BAC Concorde; inaugurating the world's first supersonic passenger service in January 1976. The final commercial Concorde flight from New York to London was on 24 October 2003.

Sir John King, later Lord King, was appointed Chairman in 1981 with the goal of preparing the airline for privatisation. King was credited with transforming the loss-making giant into one of the most profitable air carriers in the world, boldly claiming to be "The World's Favourite Airline", while many other large airlines struggled. The flag carrier was privatised and was floated on the London Stock Exchange in February 1987 by the Conservative government. In July 1987, British Airways effected the controversial takeover of Britain's "second" airline, British Caledonian.

During the 1990s, BA became the world's most profitable airline under the slogan "The World's Favourite Airline". In 1993 BA formed British Asia Airways, a subsidiary based in the Republic of China (Taiwan), to operate between London and Taipei. BA also purchased a 25% stake in Australian airline Qantas, and acquired Brymon Airways to form BA Connect all in the same year.

Lord King stepped down as chairman in 1993 and was replaced by former deputy Colin Marshall while Robert Ayling took over as the CEO. Benefits under his management included cost savings of £750m and the establishment of Go in 1998. However, one year on, in 1999, British Airways reported an 84 percent drop in profits, its worst since privatisation at the time. In March 2000, Robert Ayling was removed from his position and British Airways announced Rod Eddington as his successor. Eddington set about cutting the workforce further, in response to the slump caused by the 11 September attacks in 2001. On 8 September 2004, British Airways announced that it was to sell its 18.5 percent stake in Qantas.

In September 2005, new CEO Willie Walsh, former Aer Lingus boss, took charge of the company. In January 2008, BA unveiled its new subsidiary OpenSkies which takes advantage of the liberalisation of transatlantic traffic rights, and flies non-stop between major European cities and the United States. On 30 July 2008, British Airways and Iberia Airlines announced a merger plan that would result in the two airlines joining forces in an all-stock transaction. The two airlines would retain their separate brands similar to KLM and Air France in their merger agreement.

British Airways serves nearly 150 destinations, including 6 domestic. Along with Delta Air Lines, Emirates, Korean Air, Malaysia Airlines, Qantas and South African Airways - is one of only seven airlines that fly to all six inhabited continents.

With the exception of the Boeing 707 and Boeing 747 from BOAC, the airline as formed in 1972-4 inherited a mainly UK-built fleet of aircraft. The airline introduced the Boeing 737 and Boeing 757 into the fleet in the 1980s, followed by the Boeing 747-400, Boeing 767 and Boeing 777 in the nineties. However, with the exception of 29 of its 777 fleet, it has often equipped its aircraft with British-made Rolls-Royce engines, examples including the Trent 800 on its Boeing 777s, the RB211-524 on its 747-400s and 767s, and RB211-535s on its 757-200s. Boeing-built aircraft for British Airways are allocated the customer code 36, which appears in their aircraft designation as a suffix, such as 737-436, 747-436, 777-236.

Although it had a large Boeing fleet it has always operated other aircraft. British built aircraft were transferred from BEA (e.g. Trident) and BOAC (e.g. VC10), and in the 1980s the airline bought the Lockheed L-1011. It has also acquired through the buyout of British Caledonian Airways in the 1980s the McDonnell Douglas DC-10 and Airbus A320. In the late 1990s British Airways placed its own first direct Airbus order, for over 100 A320/A319s to replace its own aging fleet of Boeing 737s. In September 2007 BA placed its first order for long-haul Airbus jets, 12 Airbus A380s with 7 options.

British Airways has 32 outstanding options with Airbus, which may be taken as any member of the A320 family. Secured delivery positions on 10 Boeing 777 aircraft are held.

On 27 March 2007, British Airways placed a firm order for four 777-200ER aircraft with an option for four more, with the order totalling more than US$800 million at list price. The company has stated that these are for fleet expansion. BA's first batch of 777 were fitted with General Electric GE90 engines, but BA switched to Rolls-Royce Trent 800s for the most recent 16 aircraft. This has been continued with the most recent four orders as Trent 800 engines were selected as the engine choice.

On 27 September 2007, BA announced their biggest order since 1998 by ordering 36 new long-haul aircraft. The company ordered 12 A380s with options on a further seven, and 24 Boeing 787s with options on a further 18. Rolls-Royce Trent engines were selected for both orders with Trent 900s powering the A380s and Trent 1000s powering the 787s. The new aircraft will be delivered between 2010 and 2014. The Boeing 787s will replace 14 of British Airways' Boeing 767 fleet and the Airbus A380s will replace 20 of BA's oldest Boeing 747-400s and will most likely be used to increase capacity on routes to Bangkok, Cape Town, Hong Kong, Johannesburg, Singapore, and Sydney from London Heathrow.

On 1 February 2008, it was announced that BA had ordered two Airbus A318s to operate a premium service out of London City Airport (LCY) to New York. The two A318s used for the service are fitted out with 32 lie flat beds in an all business class cabin, and the service began in September of 2009. The A318 is the largest aircraft able to operate out of London City Airport. On 4 February 2008 the engine selection was announced as the CFM International CFM56. Most of BA's fleet of A320 family aircraft are powered by International Aero Engines V2500, however these engines are not available to power the A318. It was subsequently announced that, because of runway length limitations at LCY, this route will include a westbound fuel stop.

On 1 August 2008, BA announced orders for six Boeing 777-300ERs and options for four more as an interim measure to cover for delays over the deliveries of their 787-8/9s. On 12 January 2009 CEO Willie Walsh stated that BA's purchase of six 777-300ERs did not indicate that they had ruled out purchasing the A350 for their fleet renewal program and "that the airline expects to reach a decision towards the end of the year."

IMPORTANCE AND BENEFITS OF WINTER TIRES

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Ever since the introduction of the all-season tire, Canadian drivers have slid and spun their tires through the coldest months of the year. Here’s the kicker: it doesn’t seem to matter whether there’s snow on the ground or not.

“One of the biggest misconceptions people have is that winter tires are for snow,” says James Bliss, pricing and product manager for the Edmonton-based Fountain Tire, an Approved Auto Repair Services® facility. “The fact is that once the temperature gets below about 5˚ C, winter tires begin to really outshine all-season tires.”

Unlike all-season tires, severe-condition winter tires (identified by mountain and snowflake symbols on their sides) have tread patterns and rubber that are tailored for colder conditions, Bliss says. And that helps them perform better than all-season tires once temperatures plummet, whether or not they have to dig through the white stuff.

In contrast, all-season tires can turn into four round black rocks when the cold hits. Even on dry pavement, at a balmy 5˚ C, a severe snow-rated tire outperforms an all-season tire. And a study conducted by the Quebec Ministry of Transport showed that a proper winter tire can improve braking by up to 25 percent over an all-season radial and can improve collision avoidance by about 38 percent.

Drivers should also not be tempted to skimp and buy only two tires. Do you want to slide off the road forward or backward? Four winter tires are necessary to maintain proper handling and balance.

Regardless of where you drive, you need to keep a close eye on the condition of your tires. Ensure that your tires still have deep treads to help with snow traction. And pay attention to their inflation. In winter, temperatures can drop rapidly. Tire pressure varies by approximately 1 p.s.i. (pounds per square inch) for each 5° C rise or fall in air temperature.

In winter the temperature can easily slide from 5˚ to –15˚ overnight, dropping tire pressure as much as 4 p.s.i. In an already under-inflated tire, that could put you into the danger zone. Tires, therefore, should be checked monthly. If you’re not up to keeping track of the pressure of your tires when winter’s chill sets in, consider stopping by your trusted repair centre.

“If the temperature is bad, you could just come into a store and we could check that for you,” says Bliss. “That is when it is important, especially if your car has been sitting out in the cold.” And, he adds, if your shop doesn’t want to check for you, maybe it’s time you found another place to take your car.

We have enjoyed a rather mild winter this year in Calgary but as I mentioned in the daylight savings time post, we’re due for some cold weather. Looking at the forecast for this week, it looks like we’re supposed to get some of the white stuff on Tuesday with temperatures dipping slightly below freezing. Even if we don’t get any snow, its important to equip your car with the right tires for the season, and that means winter tires.

Many people assume that all-season tires are just as good as winter tires, especially in Calgary with our generally mild winters. The argument is that because of how often chinook winds blow through the area and melt away all the snow, winter tires are useless and a waste of money. Winter tires are not just designed to aid in snow/ice traction, even though that is how they are all marketed by the manufacturers. Winter tires are made with a different compound than all-season tires and summer tires allowing them to remain softer during extremely cold weather which ultimately leads to better handling and traction, even in the absence of any snow or ice.

Another important thing that is often overlooked by people purchasing winter tires is that having winter tires on all four corners of your vehicle is just as important as purchasing them in the first place. Don’t cheap out by purchasing only 2 tires, get all 4. Its not just about the extra traction when trying to get going (fine to just have winter tires on the drive wheels) but having winter tires on all four corners provides maximum grip for your car when you try to stop in wintery conditions.

If you haven’t purchased winter tires yet, or would like some more information please contact one of our sponsors. There is a reason some people refer to all-season tires as a compromise tire.

Winter tires have been mandatory in Quebec since December. Finally, a good decision from a government that tends to think about lining its pockets when it comes to the automobile sector. It’s a move that the other provinces and even our neighbours to the south will be keeping a close eye on. However, I for one am not convinced it will amount to significantly better safety record, even though there’s no doubt that winter tires are safer than all-season ones. Human nature is such that the more safety features we have working for us, the more risks we take. In the end, this translates into roughly the same results.

Continental tire manufacturers recently brought together some Canadian journalists to drive home the importance of winter tires, and of course let us try their latest creation in this field. In Canada, people are generally aware of the value of having the right tires for the season, but the same is not true in other countries. In the U.S., for example, only 2.3% of drivers go for them, compared to 14% in our country.

A new, more effective tire
Continental, a German brand, may be less well-known than some other tire makers, but they offer a somewhat higher-end product with more of an emphasis on performance. In the automobile industry, German products are known for their excellent quality, as well as the corresponding heftier price. So it’s not surprising that Continental products are somewhat more expensive than the competition’s, but that’s to be expected for anything that’s high-end. You’ll find these tires standard on certain BMW, Audi and Mercedes-Benz models. Meanwhile, the company’s General Tire division offers more middle-of-the-road products, most notably with its AltiMax line, which is affordable and very effective.

The event at Continental gave us the chance to appreciate the merits of their latest product, the Extreme Winter Contact tires. Evaluating tires is always a difficult task, particularly ones in the same range, but I’ll admit that I was pleasantly surprised by their performance.

Winter tires, are they really important?
In addition to introducing their new winter tires, Continental wanted to prove that winter tires are superior to their all-season counterparts. Now, I’ll start by admitting that only a few years ago I was convinced that all-season tires offered a good compromise year-round, particularly if they were new. However, now that I have a few performance tests under my belt, I realize that that’s not the case at all. And this event just reinforced my conviction.

The first thing you should know is that winter tires aren’t just useful in snow. The hard rubber that all-season tires are made from may mean they’re more durable at higher temperatures, but it also means they’re even harder and consequently less grippy once the mercury dips below 7 oC. You can imagine then that at -25oC, you’ve suddenly got four hockey pucks spinning under you. And aren’t your tires supposed to keep your vehicle in contact with the road? So, whether there’s snow and ice or not, all-season tires offer far inferior performance in winter.

To prove this, Continental provided us with two identical vehicles: one equipped with winter tires and another with all-season tires. Using the winter tires, we were able to shave 5 seconds off our time completing the snowy circuit with bends, a slalom and an emergency brake point. Five seconds off the usual 35 seconds it takes to complete this circuit may not seem like much, but what was truly significant was the feeling of control the winter tires give you. Especially notable was the braking distance, which goes up by a third with the all-season tires. That alone was enough to convince me that winter tires can make all the difference in a lot of cases.

Don’t mix and match!
We also test a third vehicle, this one with a pair of winter tires on the back (since it was a rear-wheel drive vehicle) and all-season tires on the front. This was common practice a few years back, but it’s really the worst possible combination. You get a false feeling of security from the good traction on accelerations, but on turns contact with the road is mediocre at best, which can fool you and set you up for some unpleasant surprises. You’re better off with four all-season tires – the lack of grip will at least force you to be more cautious!

What about money? Well, aside from the fact that you don’t have to buy two sets of tires at once, there really is no financial advantage in opting for all-season tires. A set of winter tires paired with a set of all-season tires will last longer than two sets of all-season tires. Not to mention the fact that you’ll be equipped with what’s best for each season.

In short, all-season tires are a compromise, and like all compromises, negative aspects come with them. And when you’re talking about tires and automotive safety, compromises are something to avoid. Instead, go with the best option for each season.

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Riano, 117 famiglie a rischio sgombero

«Ogni mattina ci svegliamo con la paura di vedere fuori dal cancello qualcuno pronto a toglierci la casa». Così iniziano la giornata i 400 residenti di Riano ai quali è stata sequestrata l'abitazione un anno fa per lottizzazione abusiva e che da un momento all'altro potrebbero ricevere la visita dell'ufficiale giudiziario per sgomberarli.

Pericolo imminente visto che il gip di Tivoli Cecilia Angrisano il 6 novembre ha rigettato le richieste di revoca o sospensione dell'ordine di sgombero e ha affidato al pm il compito di «curarne l'esecuzione». La sola colpa dei residenti è quella di aver comprato 117 villette immerse nella natura a pochi chilometri da Roma fidandosi delle licenze rilasciate dal Comune, dei periti delle banche che hanno concesso i mutui e dei rogiti notarili per l'acquisizione degli immobili.

Le cento famiglie «a rischio sfratto» le hanno provate tutte: hanno fatto ricorso al Tribunale del Riesame e alla Corte di Cassazione (rigettati entrambi), hanno scritto al presidente della Repubblica e al presidente del Consiglio, hanno rivolto appelli al prefetto di Roma, si sono incontrati con i tecnici della Regione. Ma è stato tutto inutile. La Procura di Tivoli intende andare avanti e il Comune di Riano non è riuscito a «salvare i suoi cittadini».

Lo sgombero ormai è alle porte. Il reato contestato dal pm Luca Ramacci è quello di lottizzazione abusiva perché quei terreni hanno destinazione agricola e non residenziale. In pratica, il Comune non avrebbe dovuto rilasciare le licenze e i costruttori non avrebbero dovuto edificare e vendere le villette sui 135 ettari in località Valle Braccia, Colle delle Rose, Stazzo Quadro e via dell'Omo. Gli indagati sono 193: i proprietari, i costruttori e il funzionario comunale che ha concesso i permessi. Ma a pagarne le conseguenze più pesanti sono le famiglie in cui vivono anche molti bambini, anziani e malati. «Questa non è vita - racconta Stefania Di Nino che abita in una delle 117 villette assieme al marito e a due bambini - La Procura è rigida nelle sue posizioni, il Comune pure. In mezzo ci siamo noi, le vittime che rischiano di trovarsi in strada. Ciò che crea il panico è non avere risposte. Siamo venuti ad abitare qui per crescere i nostri figli fuori dal caos cittadino e rischiamo di perdere tutto».

Domani mattina i residenti hanno organizzato una manifestazione in piazza Colonna, davanti a Palazzo Chigi, per cercare di attirare l'attenzione delle istituzioni. Di loro si è occupata anche Striscia la Notizia che ieri ha fatto visita al sindaco per capire come intende muoversi per scongiurare lo sgombero. Ma il primo cittadino, Nicola Regano, ha ripetuto ancora una volta di avere le «braccia legate». Regano ha detto di essersi rivolto anche al prefetto. Per ora inutilmente. Ma aggiunge: «Non sapremmo dove accogliere così tante persone. Sarebbe una grave emergenza sociale». Una situazione «paradossale» dicono in paese. «Io e mia moglie abbiamo acquistato casa nel 2003 - racconta Fabrizio Mannocchi - nessuno ci ha detto niente. Per noi era tutto regolare. Cinque anni dopo la Forestale ci ha bussato alla porta dicendo che la casa era sequestrata. Adesso le proroghe allo sgombero sono scadute. Chi ci ridarà i soldi del mutuo? E, soprattutto, dove andremo ad abitare?».

"Big Bang" machine set to yield surprises

Scientists could begin garnering information on the origins of the universe in the coming months as the world's biggest particle collider starts moving to full power next year, a project leader said Monday.

But it may not be until 2011 that what is dubbed the "Big Bang Machine" -- the Large Hadron Collider (LHC) -- straddling the Swiss-French border at the CERN research center will hit its top velocity, physicist Steve Myers added.

The LHC -- a nearly $10 billion experiment involving scientists worldwide -- was relaunched at the weekend after a technical accident 14 months ago brought it to a halt just nine days after its start-up.

Myers, CERN's Director for Accelerators, told Reuters Television that particle beams had been piped round the 27-km (17-mile tunnel) Friday, and all had gone smoothly.

"Everyone is very confident because this has been a tremendous start-up. We're making measurements on this machine now that you normally only make a year or two into an accelerator's operations," he said.

ORIGINS OF LIFE

The key aim of the project is to discover how the universe took shape after the Big Bang 13.7 billion years ago that spilled out matter at vast speeds and energies that eventually became suns, stars, planets and then life itself.

But what Myers called "new surprises in physics that we can really measure" will probably have to wait until the particle beams can be collided at the LHC's maximum force.

"We will be contemplating reaching that ultimate energy in 2011," he said.

Experiments in a previous collider at CERN -- the European Organization for Nuclear Research near Geneva at the foot of France's Jura mountains -- staged particle collisions producing energy close to that of the Big Bang.

But the LHC at its full might should recreate conditions just one billionth of a second after the primeval explosion to be captured by an array of super-computers, which will transmit the data to scientists in 33 countries.

Among enduring mysteries that researchers hope to unravel are the black holes in the universe, what anti-matter is and whether there is a Higgs Boson

The Boson is a theoretical particle thought to give matter its mass, enabling it to come together. It was first advanced by Edinburgh University scientist Peter Higgs in 1964 as an explanation of how the universe was formed.

Earlier efforts to capture it at CERN and at a similar laboratory in the United States have failed.

The LHC relaunch was lower key than the first attempt on September 10, 2008, where small technical faults culminated in a massive explosion.

The blast damaged the vast magnets that pull the particles around the tunnel and smash them together. But Myers said every precaution had been taken to ensure that could not happen again.

He said the first collisions would be staged at low energy within two weeks. After a two-week break over Christmas, energy would be increased, and then perhaps again in the spring.