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A Reaper attack and surveillance drone has gone down in Lake Ontario during a training mission about 1 p.m. local time. The Reaper belonged to the Syracuse, New York-based 174th Attack Wing of the Air National Guard, which trains Air Force pilots to fly them all over the world. The flight originated at Fort Drum north of Syracuse and the aircraft was operating in designated airspace on the eastern side of the lake. It was not armed and no injuries were reported. 

The Coast Guard and personnel from Fort Drum were searching for the wreckage late Tuesday. There was no word on what might have caused the crash. The Reaper looks like its surveillance-only predecessor, the Predator, but it has considerable offensive capability. For one thing, it has a 950-horsepower turboprop rather than the 115-horsepower piston engine on the Predator. It can carry thousands of pounds of munitions from missiles to smart bombs.

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AMR Corp. -- the parent company of American and American Eagle airlines -- and US Airways Group reached a settlement on Tuesday with the U.S. Department of Justice, which will enable them to merge and create the world's largest airline. The proposed deal, which still must be OK'd by a federal court before it can take effect, requires the airlines to sell off dozens of landing slots at busy airports including Reagan National, La Guardia and O'Hare. The airlines also agreed to maintain service in some small- to medium-sized markets, although most of those requirements expire after three to five years.

The airlines first announced their merger plans in February, but the plans were challenged on anti-trust grounds. The Justice Department said the merger would substantially lessen competition for commercial air travel in the U.S. and would result in higher airfares and less service for passengers. The combined company will retain the American Airlines name, and will be headquartered in Dallas-Fort Worth with a corporate and operational hub in Phoenix. The deal will generate up to $1 billion per year in profits for the new company, according to the US Airways news release.

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Gulfstream has taken extraordinary measures to prevent speculation in the market for its flagship G650 long-range big cabin business jet. As we reported in October, an early position holder of the $65 million aircraft, Formula One luminary Bernie Ecclestone, sold his almost-new G650 at a $7 million premium to the owner of a soccer team. According to NBC, there have been a few deals since and a few more are pending and Gulfstream has had to plug loopholes in its sales agreements to prevent the aircraft from being sold before they're actually delivered. "Customers cannot sell the aircraft before they've physically taken delivery of it. This prevents speculation, which isn't good for the market," Gulfstream told the network. 

Some would-be speculators tried to get around the policy by setting up dummy companies to buy the jets and then selling the company to a new buyer, effectively transferring ownership of the future order. Gulfstream has quashed that gambit by requiring the person who signs the sales contract to be personally involved in the final delivery of the aircraft. Oprah Winfrey and Ralph Lauren are among those drumming their fingers waiting for a G650, according to NBC.

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A handy app for those in the market for a helicopter has been released by a Russian publisher. Upcast has released Helibook, which is the third of its publications and provides interactive comparison data on 35 private, corporate and VIP helicopters, "starting from the tiny Robinson R22 and going up to the massive Mil Mi-38." Search for the app by putting "helibook" in the search function of the App Store. 

The apps feature the ability for those looking at the aircraft to directly compare data about them instantly and intuitively. "All apps allow users to browse through aircraft models currently in production or development, as well as the more popular out-of-production types," said publisher Ivan Veretennikov. "It is possible to quickly assess different aircraft, view photographs, cabin layouts, and cross-sections, as well as compare flight ranges on an interactive range map."

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The pilot who died in the crash of a twin-engine Mitsubishi MU-2B-25 turboprop Sunday afternoon in Oklahoma was the son of Sen. Jim Inhofe, according to local news reports. The airplane, which crashed after reportedly losing power in at least one engine, had been sold to Perry Inhofe, 52, an orthopedic surgeon, in September. Nobody else was hurt in the crash. The airplane had taken off from Salina, Kan., and was about five miles from Tulsa International Airport, its destination, when it reportedly was seen maneuvering with at least one engine out. The crash occurred in a wooded area. The airplane caught fire and was destroyed.

Dr. Inhofe earned his commercial pilot certificate in 2009 and was certified as a flight instructor in February 2012, according to the Daily Mail. Senator Inhofe, a Republican, is well-known in aviation circles, and was the main force behind the Pilot's Bill of Rights that was passed last year. He has been in the Senate since 1994. The MU-2B was the subject of a special safety review by the FAA several years ago after several loss-of-control accidents. The FAA mandated special training for all pilots of the fleet.

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This week’s news that the Department of Justice has settled its opposition to a merger of American Airlines and USAirways raises some unanswerable questions but one certainty: The U.S. now has only three major carriers, Delta, United and the new American, once the merger is finalized. The USAirways name will be absorbed and will eventually disappear, but it will probably take several years for that to happen. (In the meantime, the pilots once again get to figure out how to merge seniority lists.)

In its pleading to the DOJ, American argued that it couldn’t possibly compete as a standalone with Delta—which merged with Northwest—and United, which merged with Continental. DOJ didn’t buy that because it saw the new combined airline as being too dominant in at least two markets, New York and Washington. So as part of the approved deal, the new airline will sell off slots in those two cities, plus Chicago, possibly to low-cost carriers, thus preserving at least some semblance of competition.

So what will it mean having only three majors? No one knows for sure, but historically, at least recently, mergers haven’t driven fares up nationally except in some select markets. Fares have moved up modestly since 2007, but average inflation-adjusted fares are actually lower than they were 15 years ago, according to Reuters. The fare increases we’ve seen have largely been due to fuel-price hikes. Airlines have been notorious for flying around seats at below cost, which no doubt contributed to American’s bankruptcy.

But none of us should confuse fares with either add-on fees or service quality, which live in their own strange world independent of normal supply and demand. The upsell for baggage, for seats with more legroom, for food and even for boarding order has become the Holy Grail of airline profitability. On the last American flight I was on, they even cheaped out on the pretzels, although I got a full can of diet Dr. Pepper.

More than anything else, this proliferation of fees has moved airlines out of the red and into the black, although not by much. American recently reported a quarterly record $530 million in profits, belying its claim that it can’t compete with Delta and United. To get that number, they had to back out exceptional costs related to AA’s bankruptcy, but the trend is still notable.

Not that airlines have suddenly become a great business to be in. Airlines for America, an industry trade group, reports that industry wide, profits have softened since 2010, shrinking from 1.6 to 0.2 percent in 2012. Presumably, there are still things airlines could unbundle and charge for, including that Dr. Pepper I so enjoyed and for carry-on baggage. (Spirit already does the latter.) Frankly, I expect to see more of this, not less, with just three majors. That's why the low-cost carriers like Southwest and JetBlue have such an important role to play.

Besides the merging of the pilot lists, the new AA will have to merge frequent flier programs, too. I suspect the real loyalists will see some changes, maybe good, maybe not. American said it would merge USAirways passenger miles into the American list, which sounds fair enough. But American has a multi-tiered upgrade program for its Advantage members and it has nearly twice as many airplanes and more first class seats than USAirways does, thus more upgrade opportunities. So what happens when all the riff-raff from USAirways clogs up the program? Will there be more or fewer upgrades for the stalwarts? Will the USAirways loyalists enjoy more perks? Or will it just mean less bin space for gate lice like me? I’m pretty much counting on that.

And will the baggage-fee issue get more competitive? Leaving Dallas last month from AOPA Summit, I was behind a couple who spied a Southwest 737 on the adjoining taxiway with a big sign and arrow pointing to the baggage bay: “Bags Fly for Free Here.” The man remarked to his wife that they ought to check Southwest next time they fly into Dallas. Better be quick about it. Southwest is considering bag fees, too.

The merger will give American the largest route structure and the most airplanes of any carrier which, in theory, ought to make them attractive to the lucrative top of the market; business travelers who value flexibility and choice, but aren’t price sensitive. In a 2012 report, (PDFAirlineFinancial.com’s Bob Herbst said the Delta and United mergers gave those airlines strong pricing power to poach business travelers from American. With a larger route structure and predicted lower operating costs and efficiencies in the future due to a younger pilot population and newer aircraft, American is poised to get them back. In his report, Herbst concluded that the AA/USAirways merger was a must do if either airline hoped to compete.

Still, it’s a tough business to be in. American’s parent, AMR, said in its news release announcing DOJ’s acquiescence to the deal, that it would generate up to $1 billion a year in profits. Sounds like a tidy sum. But it will take about $38 billion in revenues to earn it, bringing to mind something Richard Branson once said in a variation on a theme those of us in aviation know all too well: If you want to become a millionaire, start as a billionaire and buy an airline.

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PS Engineering Flight Trial Challenge || Take Your Audio to New Heights

With a cruise speed of around 270 knots and a price tag of nearly $5 million, the 2013 Pilatus PC-12NG isn't the fastest or the least expensive single-engine turboprop on the market.  It is, however, arguably in a class of its own.  That's because it has a cabin that can carry 1,200 lbs. of payload while carrying over 400 gallons of fuel, the ability to operate from unpaved runways, and a huge 53x52-inch cargo door.  In this video, Aviation Consumer's Larry Anglisano takes a look at the airplane.

At an annual fly-in in Connecticut, pilots who design and build their own hot-air balloons gather to fly their aircraft, learn from each other, and try out new ideas.

David Clark DC PRO-X