Alitalia doubled its losses in the first half of 2012 compared with the same period last year. But the Italian carrier believes it has reason for hope, although profits are likely to be elusive this year. CEO Andrea Ragnetti says it has been “one of the most difficult semesters in the European airline business ever, but the worst is behind us.”

Just how structurally inefficient European legacy carriers still are in spite of current economic pressures is well illustrated by the comparison of Iberia and its new short-haul offshoot, Iberia Express. The latter has 10 aircraft and was launched three months ago. It became profitable in its second month and exceeded the target of a 20% unit cost improvement over its parent. It achieved 30%, and that is without the greater economies of scale available to Iberia, an airline with over 15 times more aircraft.

These are good times for civil aviation, but not so promising for defense. Acquisitions—many of them small-scale—are often aimed at strengthening an ancillary line of business. General Electric's purchase of Austin Digital Inc. (ADI), a Texas-based specialist in flight operations data analysis—for an undisclosed sum—is a case in point.

Europe's aerospace industry is making progress in unraveling the complexities of time-based flight profiles, which will be essential components of the next-generation air traffic management network. Long-range ATM plans call for aircraft to fly precise four-dimensional (4D) trajectories, with time being the fourth dimension. While it will be at least six years before 4D procedures could be deployed in the European aviation system, work is underway to advance the concept and address the range of issues that must be solved before its operational debut.

Airbus has reached the most critical phase of early A350 production with the start of final assembly

Manufacturers want to know the regulations before they build a product; regulators want to see a product before they write the rules. That is the Catch-22 facing the integration of unmanned aircraft systems into national airspace.

Foreign airlines are being allowed to lock in loan rates in a new prefunding guarantee program from the Export-Import Bank (Ex-Im Bank) that grants carriers a greater flexibility to manage their fleet acquisitions.

Can a modular approach make up for shrinking funding?