Sunday, March 02, 2014

Livemercial Aviation: Legal troubles continue for Valparaiso businessman

A Valparaiso businessman is watiting to hear whether a lawsuit can proceed — a lawsuit that accuses him of trying to hide almost $1 million to avoid losing it through bankruptcy.

U.S. Bankruptcy Trustee Daniel Freeland filed the complaint in August 2012 against Johnny Mathis Jr., perhaps best known for his online video ad company Livemercial. The lawsuit claims that Mathis moved the money from one of his other companies, Livemercial Aviation, to another, CPA Warehouse, in order to keep the money from being taken during bankruptcy.

Livemercial Aviation, created to flip small airplanes into personal luxury aircraft, filed bankruptcy in 2010 after it failed to sell the first plane it renovated and fell behind on the $6.3 million loan used to buy the plane.

The plane was eventually repossessed, but Livemercial Aviation still had about $1.5 million in debt to other creditors. Freeland, assigned to oversee the bankruptcy case, has argued that Mathis has never adequately explained why he transferred $990,000 to one of his other companies shortly before Livemercial Aviation filed for bankruptcy.

Freeland filed a complaint in August 2012 against Mathis and CPA Warehouse. asking permission to order the return of the money, calling it a “fraudulent transfer.”

“The transfer was made with the actual intent to hinder, delay or defraud an entity to which the debtor was or became indebted,” the filing says, adding that the transfer also made Livemercial Aviation insolvent and the company received nothing of value in return.

The case has been stuck since then, however, because Mathis filed a motion to dismiss the complaint. One of his arguments is that Freeland waited too long to file it.

At issue is when Freeland officially became the trustee, which would start the clock on how long he had to file a complaint against Mathis.

U.S. Bankruptcy Judge J. Philip Klingeberger wrote in an order on Jan. 14 that the issue swings on whether Freeland became the official trustee at a creditors’ meeting on Aug. 30, 2011, which would mean his filing of the complaint on Aug. 31, 2012, was one day over the year deadline he had, or if he became trustee after that date.

Klingeberger ordered a hearing on the issue Feb. 7 but has still not issued a ruling.

Mathis’ attorney, George Galanos, said he did not want to comment on the case until the judge had ruled. Frederick Carpenter, who is acting for Freeland in the case, could not be reached for comment. Through his attorney, Mathis declined to comment.

Because they are still waiting to see if the case is dismissed, Mathis and CPA have not answered the allegations made by Freeland. However, Mathis has said in previous filings in the Livemercial Aviation bankruptcy that he had always been open about the transfer and never tried to hide it.

This is not the only legal problem Mathis is facing. Horseshoe Casino is suing him in Lake County Superior Court for $1.8 million the casino loaned him over a period of months in 2006 to gamble with.

Horseshoe originally pressed charges against him in Lake County for theft but dropped those charges in September 2012 after he paid back $531,000, which Lake County Prosecutor Bernard Carter said at the time covered expenses and taxes involved with the loan.

The casino filed suit a few months later, seeking to recoup triple the money he took, or $5.4 million.

In its lawsuit, Horseshoe claims that Mathis told the company he made $1 million a year in income from his business and had $10 million in business assets.

He originally asked for a loan of $200,000 but kept increasing the amount borrowed until November 2006, when the casino told him he had to make a payment before they would loan him more. He wrote a check for $200,000 that day — a check that eventually bounced, as did other checks he wrote, according to the lawsuit.

The company says in the suit that it believes the most money Mathis ever had in a bank account he used as collateral was $4,899.

Mathis has been representing himself in the case ever since Galanos filed a motion to withdraw, saying Mathis was not cooperating.

Ameristar Casino in East Chicago is also suing Mathis in LaPorte County for $209,200, although it is not clear what the debt is for. FirstMerit Bank is suing him, Livemercial and Livemercial Aviation in LaPorte to collect on a judgment from an Ohio court for $650,194.

He also faces criminal charges in LaPorte County, but has entered into a pretrial diversion program that could see those charges dropped. They stem from his arrest in February 2013 on a Class D felony charge of domestic battery. Prosecutors agreed last month to reduce that to a Class B misdemeanor battery and to dismiss the case entirely if he successfully completes six months of pretrial diversion.

Mathis was hailed by officials when he first brought Livemercial to Valparaiso more than a decade ago. The Society of Innovators named him one of their innovators in 2007.

However, Livemercial defaulted on its rent in 2011 and became inactive with the Indiana Secretary of State’s office in 2012. Another company named Livemercial USA was created in 2011 and lists Galanos has the incorporator. It was unclear if that business was connected in any way to the original Livemercial.

Mathis still refers to himself as CEO of Livemercial in emails. The company has a website, but all it says is: “Coming soon.”

Sonex, N732SX: Fatal accident occurred February 17, 2014 in Wellington, Florida

NTSB Identification: ERA14FA123 
14 CFR Part 91: General Aviation
Accident occurred Monday, February 17, 2014 in Wellington, FL
Probable Cause Approval Date: 12/09/2015
Aircraft: WILLIAMS CHRISTOPHER T SONEX, registration: N732SX
Injuries: 1 Fatal.

NTSB investigators either traveled in support of this investigation or conducted a significant amount of investigative work without any travel, and used data obtained from various sources to prepare this aircraft accident report.

The airplane had just departed the airport; one witness reported that during the initial climb the engine “sputtered,” and another reported that it “backfired.” The pilot then made a steep turn back toward the airport, but the airplane stalled and spiraled to the ground. The airplane was equipped with an electronic flight instrument system that recorded numerous engine and flight parameters. Review of the downloaded data revealed that, initially, the engine was operating normally and within design parameters. However, toward the end of the recorded data, the No. 1 cylinder head and exhaust gas temperatures had begun to decrease while the other cylinder temperature parameters remained fairly constant. The engine data then recorded a decrease in engine rpm followed by a steep 180-degree turn toward the airport. A witness who assisted the pilot with the airplane’s oil change 2 days earlier stated that the pilot had cross-threaded a spark plug in the No. 1 cylinder and attempted a helicoil repair. During examination after the accident, the No. 1 sparkplug was easily removed by hand. This was likely the cause of the power loss that preceded the pilot’s attempt to return to the airport. The pilot’s steep, 180-degree turn exceeded the airplane’s critical angle of attack, which resulted in a stall at low altitude and collision with terrain. A review of the pilot’s toxicology revealed that even though he tested positive for antidepressants, they were not a factor in the accident.

The National Transportation Safety Board determines the probable cause(s) of this accident as follows:
The pilot's failure to maintain adequate airspeed following a partial loss of engine power during initial climb, which led to the airplane exceeding its critical angle of attack and experiencing an aerodynamic stall. Contributing to the accident was the pilot's improper repair of a stripped spark plug hole, which led to a partial loss of engine power during initial climb.


On February 17, 2014, about 1250 eastern standard time, an experimental, amateur-built Sonex, N732SX, collided with terrain shortly after departing the Wellington Aero Club (FD38), West Palm Beach, Florida. The airline transport pilot/owner was fatally injured, and the airplane was destroyed. Visual meteorological conditions prevailed, and no flight plan was filed for the personal flight conducted under the provisions of 14 Code of Federal Regulations Part 91. The flight was originating at the time of the accident.

Witnesses stated that during the initial climb, the engine "back- fired" and made a "sputtering" sound. The pilot entered a steep 180 degree turn back towards the airport. The airplane then stalled and entered a nose-down spiral, descended into a canal.


The pilot, age 58, held an airline transport pilot certificate for airplane multiengine land, airplane single-engine land, rotorcraft-helicopter, instrument helicopter, which was issued February 16, 2008, and a first-class airman medical certificate issued February 6, 2012, with no limitations. On the pilot's most recent application for a Federal Aviation Administration (FAA) medical certificate, he reported a total of 13,000 flight hours. The pilot's logbook was not recovered; therefore, his total flight experience could not be determined.


The single engine airplane was manufactured in 2007, and was powered by an AeroVee series engine and equipped with a Sensenich model W54JV544G-AC9751, fixed-pitch propeller. The maintenance logbooks were not located; therefore, the maintenance history of the airplane could not be reconciled.


At 1253, the recorded weather at Palm Beach International Airport (PBI), West Palm Beach, Florida, about 10 miles east of the accident site, included variable wind 6 knots, 10 statute miles visibility, few clouds at 4,300 feet above ground level. The temperature was 21 degrees Celsius (C), the dew point was 11 degrees C, and the altimeter setting was 30.19 inches of mercury.


The wreckage was located partially submerged in a pond, about 200 yards from the departure end of runway 15. The airplane came to rest on a 109 degree magnetic heading, and was 3 feet from the pond's edge. The airplane was removed from the pond for examination, and all major components of the airplane were accounted for at the accident site.

The forward portion of the fuselage, firewall and cockpit were deformed and displaced aft. Both wings remained attached to the fuselage and were crushed along the leading edge aft. The vertical stabilizer, elevators and rudder remained attached to the empennage. Control continuity was traced from the cockpit control stick to the elevators and ailerons and from the rudder pedals to the rudder control horn. The examination of the flight control system components revealed no evidence of preimpact mechanical malfunction.

Examination of the engine revealed that it was separated from the firewall with sections of engine mount still attached and bent. The engine revealed impact damage on multiple areas on the external surface. Further examination revealed that the ignition lead wires were all attached to the respective sparkplugs and separated from the coil packs on the firewall. Examination of the wires revealed no breaks or chaffed sparkplug wires.

Examination of the sparkplugs revealed that the top spark plug on cylinder No. 1 was not seated in the cylinder head and finger tight within the cylinder head threads. The lower sparkplug was found seated to the cylinder and secure. The engine cylinders revealed that the top sparkplug, associated with cylinder No. 4, top sparkplug was seated and finger tight. All other sparkplugs were found seated within the cylinders and secure. All of the spark plugs were removed and the cylinders were checked for blockage. No blockage was noted and the crankshaft was rotated freely by hand. Engine valve train continuity and thumb compression was observed on all cylinders.

The throttle body revealed that it was still attached to the throttle cables, but broken away from the manifold. The throttle body lever actuated when the throttle control was manipulated. The air filter was found crushed and impact damaged. The fuel line was connected to the throttle body and was impact damaged and separated from the electric fuel pump attached to the firewall. Examination of the accessory plate revealed that it was impact damaged. The oil cooler was crushed and the oil flow input and output lines remained attached. The oil lines were broken away from the oil pump and oil was within the lines and the oil sump can.

The propeller remained attached to the propeller hub and the hub remained attached to the crankshaft. The wooden propeller revealed that one propeller blade was splintered, and the other propeller blade displayed span-wise cracks across the forward face.


An autopsy was performed on the pilot on February 18, 2014, by Office of the District Medical Examiner, District 15 State of Florida, West Palm Beach, Florida.

Toxicological testing was performed on the pilot by the FAA Bioaeronautical Science Research Laboratory, Oklahoma City, Oklahoma.

Review of the toxicology report revealed, no carbon monoxide was detected in the cavity blood. No ethanol was detected in the vitreous. The following drugs were detected in the blood cavity; 0.091 (ug/ml, ug/g) Citalopram and 0.04 (ug/mL, ug/g) N-Desmethylcitalopram detected in blood cavity. Citalopram and Desmethylcitalopram is an antidepressant drug used to treat depression.


According to a friend of the pilot, he assisted the pilot during an oil change two days prior to the accident. He stated that while conducting the oil change the pilot attempted to change the sparkplugs and cross-threaded the upper sparkplug on the No. 1 cylinder; and made an attempt to helicoil the cylinder thread. The friend further stated that he inspected the sparkplug and noted that the sparkplug along with the helicoil were able to be pulled out of the cylinder head. The pilot continued to work on the engine but the friend did not know if the pilot eventually repaired the cylinder head or if the pilot had flown the airplane after the repair, prior to the accident flight. During the examination of the engine a helicoil was not observed within the cylinder head threads of the No. 1 sparkplug.

The airplane was equipped with a Stratomaster Enigma electronic flight instrument system (EFIS) that is capable of recording primary flight data, GPS positions and engine monitor data. The device supports data recording to a secured digital (SD) card. The SD card was recovered and sent to the NTSB Vehicle Recorder Division for data recovery. Review of the data revealed that all engine parameters were normal during the initial climb. Further review revealed that the No. 1 cylinder head and exhaust gas temperature dropped approximately 100 degrees, followed by a loss in rpm and a loss in airspeed. GPS data then showed the airplane making a banking left turn as described by witnesses.

The Palm Beach Post has given the recent experimental aircraft accident an inordinate amount of coverage. However, it was never mentioned that veteran airline pilots crash experimental airplanes at an inordinate rate. The lay public has the misconception that a Boeing 777 pilot with 15,000-20,000 hours of total flight time will automatically be a good pilot in a small propeller-driven airplane. Jet pilots crashing small prop planes is not an anomaly.

I am a retired commercial pilot with 18,000 hours of flight time, including 11,000 as a Boeing 727 captain. I would be totally unsafe even attempting to taxi a Cessna 172. My experience as a veteran jet pilot transitioning to small propeller airplanes is documented in my book, “The Rogue Aviator” (, with an entire chapter dedicated to that theme. The title of that chapter is: “An Accident Looking for a Place to Happen — Jet Pilots in Prop Planes.” Very succinctly, in most regards, it is easier flying “the big jet” than the “puddle-jumper.” The crash rate of the little prop plane, particularly home-builts or experimentals, is off-the-scale unqualifiedly higher than the airline jet — even with an airline or ex-airline pilot at the controls.


Delray Beach


NTSB Identification: ERA14FA123 
14 CFR Part 91: General Aviation
Accident occurred Monday, February 17, 2014 in Wellington, FL
Aircraft: WILLIAMS CHRISTOPHER T SONEX, registration: N732SX
Injuries: 1 Fatal.

This is preliminary information, subject to change, and may contain errors. Any errors in this report will be corrected when the final report has been completed. NTSB investigators either traveled in support of this investigation or conducted a significant amount of investigative work without any travel, and used data obtained from various sources to prepare this aircraft accident report.

On February 17, 2014, about 1250 eastern standard time, an experimental, amateur built, Williams Sonex, N732SX, collided with terrain during an uncontrolled descent after departing the Wellington Aero Club (FD38), West Palm Beach, Florida. The airline transport pilot was fatally injured, and the airplane was destroyed. The airplane was registered to and operated by the pilot under the provisions of 14 Code of Federal Regulations Part 91 as a personal flight. Visual meteorological conditions prevailed, and no flight plan was filed. The flight was originating from FD38 at the time of the accident.

According to witnesses, as the airplane climbed after takeoff the engine backfired and began to sputter. The airplane made a steep 180 degree left turn, back towards the airport and went into a nose down attitude. The airplane began to spiral downward and collided with a pond. Witnesses attempted to assist the pilot and reported the downed airplane to the local 911 operator at 1255.

The wreckage was located partially submerged in a pond 3 feet deep, 200 yards from the departure end of runway 15. The airplane was on a 109 degree magnetic heading, and was 3 feet from the ponds edge. The airplane was removed from the pond for examination, and all major components of the airplane were accounted for at the accident site. Examination of the airplane revealed that the engine was separated from the firewall, impact damaged, and still attached to the engine mounts. The cockpit, fuselage, wings, and empennage were impact damaged. Flight control continuity from the cockpit controls to the flight control surfaces was confirmed. A cursory examination of the engine confirmed valve train continuity and compression on all cylinders.

Florida plays prime role in filling global need for pilots, but wages drag in United States

To fulfill his dream of becoming a pilot, Mesut Yildirim traveled thousands of miles to attend Florida Tech’s flight school, and he is just one of many aspiring aviators coming to Brevard County from faraway places to pursue their love of flying.

Yildirim comes from Turkey, a country with an emerging aviation industry that is lacking a key component for future growth: Pilot training programs.

“Even if you have the money, it’s difficult to get flight training in Turkey, and most people who have the money want to get trained in the United States,” said Yildirim, one of 135 students enrolled in a Florida Tech scholarship program funded by Turkish Airlines.

Yildirim’s case is illustrative of a growing need for pilots in Asia and the Middle East, and flight training schools such as Florida Tech’s are positioning themselves to fill that shortage and make a greater name for themselves globally.

“We can’t solve the problem all by ourselves, but we can certainly capture the market,” said Kenneth Stackpoole, vice president of Florida Tech’s aviation program.

International airlines are willing to pay to recruit and train the pilots they need, and some — such as Turkish Airlines — offer aspiring pilots full scholarships coupled with generous compensation packages. Turkish Airlines pays entry-level pilots nearly $100,000 a year and offers some job candidates full tuition reimbursement.

The situation is different in the United States, where the entry-level airline pilots are typically paid poverty-level wages at regional airlines while they work their way up the ranks to captain jobs at the major airlines. In recent months, American regional airlines have said that they face a pilot shortage, too, due to federal laws which took effect this year. The laws impose stricter training requirements for entry-level pilots and increase the amount of mandatory rest time between flights.

Some regional airliners, like Republic Airways Holdings, have parked planes and canceled flights, telling their customers that they could not find a sufficient number of pilots to fly. But the Government Accountability Office released a report on Friday which called that assertion into question, arguing that the regional airlines’ hiring difficulties had more to do with low compensation than a scarcity of qualified candidates.

Some aviation experts say that American airlines will boost pay and increase hiring in response to market conditions, which are more favorable to the airline industry now than they were during the recession.

A growing demand

But the big growth, without question, is overseas.

A recent forecast by The Boeing Co. predicted Asian airlines would triple the size of their aircraft fleets within 20 years at a cost of $1.9 trillion. That translates to a need for 192,300 new pilots on that continent, according to Boeing.

Boeing predicts that many countries will encounter a similar problem soon — albeit, to a much smaller degree — as the current roster of pilots age and retire.

In the United States, for example, the General Aviation Manufacturers Association in Washington, D.C., says the average American airline pilot is 50 years old. Pilots must retire at age 65. The demographics of the pilot labor force are similar in Europe, which also requires airline pilots to retire at 65.

“If we were to pluck the average pilot out of a cockpit, they’d be within 15 years of retirement,” said Martin Rottler, a lecturer at Ohio State University’s Center for Aviation Studies. “That’s a serious issue.”

Rottler said that years of turmoil in the airline industry, coupled with low wages for entry-level pilots, had made it a highly unattractive profession for many who would otherwise have entered the industry in the past decade.

“The elephant in the room is pilot pay,” he said.

Wages not flying high

Pilots just out of aviation school can expect to be paid less than $30,000 per year if they take a job with an American regional airline. Some will be paid an annual salary as low as $18,000.

Though flight school graduates can work for significantly higher pay outside of the regional airline industry — as a personal jet pilot, for example — this steers them away from the career trajectory that leads to the most glamorous and lucrative jobs in aviation: the $200,000 salary jobs as top-tier pilots at the major airlines and cargo carriers. So new pilots face a financial dilemma: do they accept low salaries now with the expectation that they will be richly rewarded down the road, or do they accept higher-paying entry-level jobs with less growth potential?

The decision is especially difficult for those who have loans to pay, which is the situation of most American graduates of flight schools. Meanwhile, the price of fight licensing — which requires a minimum of 1,000 hours in a jet cockpit — is rising due to increasing costs, such as plane fuel expenses, and new, congressionally mandated safety training requirements. The total cost of pilot education can exceed $100,000.

A flight student at Florida Tech can expect to pay around $70,000 for training that results in an American commercial pilot license and $88,000 for a European license, plus housing and food costs. Flight students who want a bachelor’s degree along with their pilot’s license would pay Florida Tech $58,000 for flight training plus approximately $35,000 in annual tuition.

In good economic times, the track from a regional airline to a major airline could happen within two years.

But the last decade was a difficult one for the aviation industry, which was negatively impacted both by a steep recession and by a contraction in demand following the Sept. 11, 2001 terrorist attacks. There were few opportunities for advancement.

Dennis Brandt, a 2002 Florida Tech graduate of the university’s College of Aeronautics, said that he felt stymied by the lack of upward mobility in the aviation industry. Brandt said that jobs for pilots were so scarce when he graduated that he had to spend four years working as a flight instructor and earning a master’s degree before regional airlines would even consider hiring him.

When Brandt finally got a regional pilot job, he was paid so little that he could barely afford to feed himself.

“It’s impossible to support a family on that amount of money,” said Brandt, noting many of his colleagues gave up on flying, because of the low wages paid by regional airlines.

Six months ago Brandt made the leap from the regional airlines to the major airlines when he took a pilot job at United Airlines, and he is thrilled that his struggle paid off.

Brandt says that the future looks brighter for aspiring pilots today than it did when he was starting out.

Competing outlooks

Another Florida Tech alumnus, Zach Grant, agreed with Brandt’s asssessment of the pilot job market.

“The number of pilots being trained now is a small fraction of the number of pilots being trained in the 1990s, and we need more people now than we did then,” said Grant, a flight officer at United Airlines. “We at United, just to keep abreast of attrition, will have to start hiring 500-to-600 pilots per year for the foreseeable future."

But some aren’t as rosy-eyed about the employment prospects of pilots.

Patrick Smith, a pilot and author who runs a popular website called AskthePilot.

com, said he is dubious of the proposition that conditions will improve for Americans starting out in his profession.

“It’s somewhat telling that virtually no regional carriers have raised their salaries or benefit packages to levels that would appear aimed at retaining or attracting pilots,” Smith says on his website. “There will always be pilots — some would say too many of them — happy to endure almost anything for the sheer thrill of the job.”

Experts on automated technology, like drones, are even more pessimistic about the American labor market for pilots, with some saying that technology will reduce the number of pilots needed to operate passenger aircraft. That is the opinion of Mary “Missy” Cummings, a world-renowned researcher on drones who serves as director of Duke University’s Humans and Autonomy Lab.

“There are formal efforts both in the U.S. and abroad to determine how to go from two pilots to one in commercial aircraft,” said Cummings, a former fighter pilot.

But Boeing forecasters predict that the North American airline industry will grow in the near future due to “burgeoning demand” and that it will add 85,700 pilot jobs over the next 20 years.

Capitalizing on a need

With its temperate weather, Florida boasts dozens of flight schools. Florida Tech and a few others stand out, however, because they offer dual-degree programs with flight options. That allows students to not only get pilot training but also to develop expertise on the business of aviation, something key for foreign airlines that need both pilots and knowledgeable administrators.

That’s why Turkish Airlines is footing the entire bill for Yildirim’s education in exchange for the promise that he will work for them for 10 years.

To capitalize on the international demand for pilots, Florida Tech is forming partnerships with foreign flight training academies, so that students get the certifications necessary to fly commercial planes outside the United States. The university announced this month that it will begin collaborating with four European flight academies, and university leaders said that they expect to add Asian flight academies to their list of partners in the near future.

For the past few years, the number of applicants to Florida Tech’s flight training program has increased 8 percent to 10 percent per year, according to Greg Reverdiau, the university’s director of business operations for aviation programs.

“It puts Melbourne, Fla., on the map,” he said. “We have the airspace to fly almost every day of the year.”

Story and photo:

Federal Aviation Administration Seeks New Safeguards on Boeing 737s: Proposal Would Mandate Changes Designed to Ensure Adequate Flight Speeds

The Wall Street Journal

By Andy Pasztor

March 2, 2014 7:32 p.m. ET

U.S. aviation regulators want cockpit-automation fixes on nearly 500 Boeing Co. 737 planes, seeking to prevent pilot errors that over the years have caused fatal crashes of several jet and turboprop airliners.

The Federal Aviation Administration's proposed safety directive, which will be formally released for public comment on Monday, aims to ensure that all pilots of 737-600 models and later versions have adequate safeguards if airspeed drops dangerously low, particularly during landing approaches.

Foreign regulators are expected to follow the FAA's lead in demanding changes to parts of the aircraft's flight-control computers, likely affecting an additional 700 or more of the widely used 737s.

Chicago-based Boeing previously recommended the changes, but the FAA wants to make them mandatory.

The latest move comes amid an escalating industrywide debate over the most-effective cockpit designs to warn pilots if automated throttle systems aren't properly engaged or suddenly turn off, resulting in planes flying too slowly on approach.

Such problems with low airspeed—often prompted by confusion about the status of automated throttles—have been identified as major factors in some of the most infamous airliner crashes in recent years. They include last summer's crash of an Asiana Airlines Boeing 777 into a sea wall while trying to land at San Francisco International Airport. The pilots failed to notice their approach speed dropping.

In 2009, a Colgan Air turboprop crashed near Buffalo, N.Y., killing all 49 people aboard, after pilots allowed airspeed to decay. The accident shined a spotlight on the shortcomings of regional airlines.

Specifically, the FAA's proposal stems from the Feb. 25, 2009 crash of a Turkish Airlines Boeing 737, which went down short of an Amsterdam runway, after a faulty altimeter caused the plane's automated throttle system to prematurely roll back thrust. The crew failed to notice the discrepancy in time; nine people were killed.

In the wake of that accident, Boeing started installing a more-prominent audible warning system—featuring a computer-generated voice—on 737 models rolling out of its factories.

The company also issued a series of nonbinding service bulletins, recommending that thelarge global fleet of previously built 737s be retrofitted with features designed to ensure that autothrottles maintain safe flight.

In its proposal, the FAA said "loss of automatic speed control" can result "in loss of control of the airplane." The agency is proposing a three-year compliance deadline, once the directive becomes final.

Over the weekend, a Boeing spokesman said the manufacturer has "received limited reports" of altimeter discrepancies since the Amsterdam accident, but none of those led to accidents.

At the same time, the FAA is working to clarify long-standing policies and safety advisories related to cockpit features for low-speed alert and protection systems. Public comments on those proposals are due within a week.

The agency, however, has stopped short of embracing wide-ranging regulatory changes affecting the certification of new types of airliners, despite prodding by the National Transportation Safety Board, some plaintiff lawyers representing families of air-crash victims and a number of independent air-safety advocates.

For years the NTSB and outside experts have called on the FAA to require more-extensive low-speed alerts, including a computer-generated voice warning that says "low airspeed," to help pilots of airliners and charter aircraft avoid potentially catastrophic aerodynamic stalls near the ground.

The Boeing spokesman said the company has "determined that no design changes are required" beyond those already voluntarily instituted by the company.

In the past, Boeing and FAA officials have generally responded to calls for alerting changes by emphasizing that aircraft already have visual cockpit warning symbols and are equipped with so-called "stick shaker" devices, which vibrate control columns when approaching a stall.

In the wake of the high-profile San Francisco crash, Boeing safety officials said that enhancing the 777's low-speed warning system with a computer-generated voice could have the unintended consequences of distracting pilots in a cockpit that already features an array of visual and audible warnings for different systems.


Cathay to withhold United States pilots' wages for taxes: Airline says new laws are forcing it to hand over 30 percent of salaries to American authorities

Cathay Pacific Airways is to start withholding about 30 percent of its American pilots' salary every month and pass the money to the US tax authorities together with the pilots' personal information this year.

While the airline told the South China Morning Post the move was designed to comply with US tax regulations, its decision has been challenged by legal and tax experts in Hong Kong.

They said companies in Hong Kong had no obligation to fulfill demands made by a foreign government because of the two different jurisdictions.

Lawyer Albert Luk Wai-hung said that if the airline observed the US regulations, the affected pilots could sue the airline for underpaying them because part of their salaries would not find its way into their pockets. That could violate the spirit of their contracts.

"The company also cannot pass their employees' personal information to any third parties without their consent," Luk said, pointing to the Personal Data (Privacy) Ordinance.

At the centre of the controversy are two US tax regulations - an income tax withholding requirement in the Internal Revenue Code and the Foreign Account Tax Compliance Act.

Patrick Yip, a national financial services tax leader at Deloitte Touche Tohmatsu, said the tax withholding law required overseas companies which hired US citizens to withhold an amount of tax and pass it to the US Internal Revenue Service. It applies to US citizens who make more than US$97,600 a year - about HK$63,000 a month.

"But practically, Hong Kong and the US are two jurisdictions so I have never seen any companies here which comply with this law," Yip said, adding there would be no penalty even in the case of non-compliance.

"Even the US companies in Hong Kong which have US employees don't do it … no wonder the pilots have such big reactions because no one has ever heard about it."

Cathay will start withholding tax from the second quarter of the year, and pilots said it would affect 300 to 500 of them - up to 18 percent of cockpit crew.

The pilots said they already had to pay Hong Kong and US taxes, but before Cathay changed its policy they could file US taxes themselves once a year.

CPA Australia's divisional president for Greater China, Ronald Yam, and the chair professor of accounting at the University of Hong Kong, Amy Lau Hing-ling, said they had not heard of a local company withholding US employees' taxes.

As for Fatca, it was passed into law in 2010 but will only take effect in July this year.

The anti-tax evasion law requires foreign financial institutions such as banks to declare to US tax authorities the foreign holdings of anyone liable under US tax.

"The US Internal Revenue Service is actively seeking airlines flying into the US to ensure they are fully compliant with all US income tax requirements," Cathay said. "As an international airline flying into the US, we are working with the IRS on this compliance."

Cathay added that no disclosure of information would be made to the IRS without "notifying" the pilots.

Yip, an expert on Fatca, said that if Cathay did not comply, the US tax authorities would withhold 30 percent of its US-source income.

He said it was "strange" that the tax authorities had demanded airlines declare pilots' financial details because airlines were not financial institutions.

Two American pilots employed by Cathay said the plans would create cash-flow problems for them. They also said that filing tax was a complex matter and they were concerned they might pay more than they should.

This article appeared in the South China Morning Post print edition as Cathay to withhold US pilots' wages for taxes

Federal Aviation Administration begins audit of Nigeria’s aviation industry March 31

Barely three years after Nigeria’s aviation achieved the United States Federal Aviation Administration (FAA) Category 1 status, the agency is billed to return for a mandatory re-assessment of Nigeria’s aviation industry on March 31, 2014.

Daily Independent recalled that Nigeria aviation industry achieved FAA Category 1 about 42 months ago, on September 18, 2010.

Director General of the Nigerian Civil Aviation Authority (NCAA), Capt Fola Akinkuotu, who disclosed this to journalists at the Murtala Muhammed International Airport (MMIA), Lagos, on Sunday, however noted that the visit is not just about getting Category 1 certification, but maintaining it.

India, he said, for example, recently lost its Category 1 status, adding that already NCAA has set up a technical committee headed by the Capt Abdulahi Sidi to oversee the exercise.

Akinkuotu added that members of the committee were also drawn from the disciplines such as Human Resource, Finance and Accounts, Legal and Administration.

The NCAA boss disclosed that the FAA is coming to see if the processes that Nigeria aviation  documented some years  back have been well implemented and complied with, in line with international practice.

According to him, “Nigeria’s aviation industry is under scrutiny and the success of this mandatory re-assessment is dependent on the documented processes and whether the processes are being followed in line with international practices.

“The aim of the re-assessment is to ensure that our processes are right,” he added.

On the benefits of Category 1, Akinkuotu said it would ensure that Nigeria continues to fly directly to the United States without having to go through a third party country with category 1.

The NCAA boss, expressed optimism that Nigeria’ current aviation processes can help to sustain Category 1, adding that countries so certified enjoy very low premium on insurance, because the risk assessment will be low.

“Nigeria will continue to maintain the elitist class. Nigeria is one of the three African countries with Category” he said.


More than 160 apply for Charleston airport deputy director

Bill New should be flattered.

More than 160 people have applied to replace him as deputy director at Charleston County Aviation Authority.

Resumes came from local residents and as far away as Alaska, said Paul Campbell, director of Charleston County's three airports, including Charleston International, the state's busiest.

"We have a really good selection of resumes," he said. "It goes to show how attractive Charleston is across the nation, and even some local people see the airport as a nice career, even with some bad publicity."

Campbell was referring to recent controversy involving Aviation Authority attorney Arnold Goodstein and some members of the public who question his legal service without a contract.

Campbell, with other senior staff members including New, are reviewing the resumes and hope to narrow them down to about 10 by mid-March. Interviews and second interviews would be completed by mid-April.

"We want someone to come on board in May so they can work with Bill for a couple of months," he said.

Campbell will make the final decision, not the 13-member Aviation Authority board, which hires only the director and the attorney.

New will retire June 30. He started at the airport as police chief in 1995 before moving up deputy airports director in 2007. Prior to that, he served 21 years with North Charleston Police Department.

Although New serves as deputy director, he earns the salary of former airports director Sue Stevens before she resigned in July. Board members boosted his payroll by $36,000 in September. He receives $211,000 a year. Campbell, the director, earns $192,000 a year.


Nigerian convicted in South Africa for cheating in pilot’s license exam

A Nigerian now faces four years in jail in South Africa for cheating in an examination to procure a pilot’s license.

The convict was not sure he would pass the required exam, so he got his friend to write the exam for him, using forged documents.

The impostor passed the exam, according to reports from South Africa.

His collaborator also faces jail or a fine.

Soponuchi Amadi from Nigeria and Nedsun Likhunya from Malawi both had private pilots’ licenses and had gone to Port Elizabeth for further training.

Amadi wanted a commercial license, but was uncertain he would pass the exam. He asked Likhunya to write it for him. He gave him his private pilot’s license and Likhunya alter it by replacing Amadi’s photograph with his own. Likhunya then wrote the exam posing as Amadi.

Investigators were suspicious, and while the impostor was writing the examination with about 10 others, they set background checks in motion and found that he was not the man he said he was.

Both men were charged under the civil aviation laws in the Port Elizabeth Magistrate’s Court and found guilty on several charges.

Likhunya was sentenced to one year in jail on a charge of forgery and three years for contravening various civil aviation regulations.

The court also ordered that his private pilot’s license be cancelled.

Amadi, who had asked him to write the exam on his behalf, was found guilty of contravening several civil aviation regulations and sentenced to three years jail or a fine of R10,000. Two of the three years were suspended for five years.

Poppy Khoza, director of the SA Civil Aviation Authority, welcomed the conviction and said the two men “seemed to be oblivious of the fact that in the aviation industry, there is absolutely no room for error” as this has led to the loss of lives.

Although Likhunya passed the exam, posing as Amadi, this would not have enabled Amadi to fly a commercial airline. Pilots need other requirements, such as an air transport pilot’s license and many flying hours before they can take control of a commercial aircraft.


Consultant: Air service between Pittsburgh and Northeast Pennsylvania would be profitable

Resuming commercial air service between Wilkes-Barre/Scranton International Airport and Pittsburgh would probably be sustainable if an airline were willing to try it, aviation consultant Mead & Hunt found.

But that doesn't necessarily mean it will happen anytime soon - even amid the natural gas boom that would seemingly give carriers incentive to reconnect the eastern and western parts of the state.

US Airways began eliminating flights between Pittsburgh International Airport and intrastate regional airports shortly after it dropped its hub status at Pittsburgh in 2004.

Almost a decade later, the Allegheny County Airport Authority sought Mead & Hunt's study, which examined reconnecting Pennsylvania's second-largest city to the rest of the state.

The Sunday Times obtained a redacted version of the report through a Right to Know Law request.

"The three non (essential air service) markets that have significant local passenger traffic to PIT, Allentown, Harrisburg and Wilkes-Barre/Scranton are projected to be sustainable to PIT, especially when combined with the essential air service communities," the consultant's researchers said in the report.

Wilkes-Barre/Scranton International Airport had five daily flights to Pittsburgh through 2003, four daily flights in 2004 and three daily flights in each of 2005 and 2006 before US Airways pulled the plug.

Mead & Hunt's researchers examined several scenarios involving an airline initiating service between Pittsburgh and 13 connecting airports throughout Pennsylvania, including Wilkes-Barre/Scranton.

In every scenario involving the Pittston Twp. airport, the consultants projected an airline would make money flying between the Steel City and Northeast Pennsylvania.

Estimated annual profit margins ranged from $35,853 to $366,790 after about $3.8 million to $4.2 million in expenses associated with the route.

"If an airline is willing to do it," airport Director Barry Centini said. "Those are the key words."

Mead & Hunt also found several routes on which major airlines could lose substantial sums of money, including a possible $2.34 million loss on an unsubsidized route to Williamsport.

In that scenario, connecting to seven smaller airports would put an airline in the red $6.27 million even if flying to Northeast Pennsylvania were a profitable part of the venture.

Even just reconnecting the profitable routes has some significant challenges.

"The key issue to implementing the proposed service is finding a carrier that has the available aircraft to serve these markets profitably," the report said, citing contract agreements that have locked airline resources into certain markets.

Local airport officials tried to recruit the former Gulfstream International Airlines to resume the route, but Mr. Centini said the company was not interested.

Mead & Hunt had the same instinct, describing the company - now called Silver Airways - as "the top candidate" for the initiative and "one of the few airlines identified that could operate ... markets profitably."

Silver Airways officials told Mead & Hunt they "had no desire" to participate for now, and they instead prefer to focus on United Airlines hub cities where passengers can book flights on either airline interchangeably, the report said.

Still, Mr. Centini has hope of restoring service to Pittsburgh.

The city is one of several destinations to which airport officials can seek service with a $575,000 grant from the U.S. Department of Transportation.

The grant money's potential uses include providing revenue guarantees to airlines to ensure they don't lose money on new routes or offsetting startup costs like infrastructure upgrades.

Mr. Centini said he believes the airport has a realistic chance to gain service to any of the targeted places, which also include Washington, D.C., Tampa and Fort Lauderdale, Fla., and Myrtle Beach, S.C.