Qantas budget offshoot Jetstar says it is negotiating to place a substantial order for Airbus aircraft, presumably more A320 family jets to operate alongside those it already flies, mostly on domestic routes. The airline has committed itself to Boeing 787s for long-haul operations and plans to phase out the A330s it flies as interim equipment. "We are talking to Airbus at the moment for a long-term big order," says Chief Executive Alan Joyce, adding that the aircraft are needed by 2009.

A key Japanese government department plans to allocate ¥40 billion ($330 million) in subsidies for a Mitsubishi Heavy Industries project for a large regional jet, greatly increasing the likelihood of the country finally establishing itself as a supplier of commercial aircraft. With Boeing 787-based carbon-fiber construction and new engines, the proposed Mitsubishi aircraft could present a serious challenge to Embraer, Bombardier and two other companies developing such jets, Sukhoi and China's Avic I.

Embraer and Bombardier beware: Japan plans to allocate JPY40 billion (US$330 million) from next year to subsidize Mitsubishi Heavy Industries' proposed large regional jet, whose Boeing 787-based carbon-fiber construction and new engines could deliver dramatic ad- vances in efficiency.