12 airlines agree to scrap surprise surcharges

Under a peace deal announced by the Office of Fair Trading today, the carriers will incorporate debit card surcharges into advertised prices rather than introducing them at the end of the booking process.

Surcharges for credit cards – which cost more to process – will still be allowed, but the airlines have promised to make those more transparent.

The airlines – Aer Lingus, BMI Baby, Eastern Airways, easyJet, Flybe, German Wings, Jet2, Lufthansa, Ryanair, Thomas Cook, Thomson and Wizz Air – are likely to raise their ‘headline’ fares to make up the lost revenue.

Most have already changed their pricing, advertising and websites; the others will change advertising this month and complete the changes over coming months.

Welcoming the deal, the Office of Fair Trading said that customers should not have to pay fees for using a debit card which it described as the “online equivalent of cash.”

Clive Maxwell, chief executive, said: “It is important that the cost presented when they search for a flight is realistic and that they are not surprised by extra charges.”

The OFT began investigating the debit card fees last March following a super-complaint from the consumer group Which? and had warned airlines to scrap the fees – or face court action.

Mr Maxwell said: “We made it clear from the start that we would use all of our enforcement powers, including court action if necessary, but are pleased to have reached agreement with the airlines before court proceedings were required.”

The fees are a costly hidden extra: Ryanair currently charges a £6 ‘administration fee’ for debit cards, adding £48 to a holiday for a family of four.

Sarah Brooks, director of financial services at Consumer Focus said: “Nothing is more frustrating for consumers than seeing a good online deal disappear on the final screen before booking.”

Over half of 4,500 people worldwide who had purchased an airline ticket online within the last 12 months told a recent survey by the card processing company WorldPay that they did not think surcharges were made clear enough by airlines, and 38 per cent expressed frustration at paying for using debit cards. The UK was the country where consumers were mostly likely to be sprung with last minute charges (41 per cent), ahead of Finland and Brazil.

Phil McGriskin, WorldPay’s chief product officer, said: “Customers understand that purchasing an airline ticket will involve associated taxes and charges but what really aggrieves them is a lack of transparency about what airlines are charging and why. It’s a positive step forward that airlines are pledging to be upfront about these costs.”

Peter Vicary-Smith, the chief executive of Which? – whose campaign was supported by 50,000 people – said it was important that credit card charges – which will remain – were clearly displayed throughout the booking process.

Last Christmas the Government promised to ban excessive surcharges for debit and credit charges by all travel companies by the end of this year.

CEO of Hastie MidEast flees UAE over bounced cheques

The regional CEO of Australian engineering firm Hastie Group – which went bust in May – has fled the UAE after bouncing two cheques worth around $700,000, it was reported on Wednesday.

Dubai-based executive Gavin Appleby and former human resources manager Gary Allen have returned to Australia after a lack of company funds caused a series of cheques to bounce, which is a criminal offence in the UAE.

“Basically, the bottom line for me is that I found out (on June 1) that there were still four cheques in the market with my signature on. These were signed last year [while] I was employed by Hastie Group Middle East for workers’ accommodation and the head office in the UAE.

“I am also now aware that one of those cheques has bounced and officials have turned up at the Hastie UAE office yesterday,” he was quoted as saying in a report by the Australian newspaper on Wednesday.

“Mr Appleby said he hoped to clear his name in the UAE, saying he understands the government takes a case to Interpol if it can’t find action against an individual within six months,” the report added.

Appleby left his role with Hastie in January, but he claimed his name remained on a number of cheques, which made him personally liable.

Hastie, which has 7,000 employees in Australia and overseas, provides refrigeration and air conditioning services for the building industry and worked on projects in the UAE, including Abu Dhabi’s Dalma Mall and Dubai’s JAL Towers.

Hastie posted a loss of $145m in the six months to December and earlier this year it reported a $19.5m “accounting irregularity”, saying that an initial investigation showed an employee had falsified accounts to meet profit forecasts.

According to documents published in May by Australia’s ABC news network, senior executives wired AED11m ($11.29m) funds back to Sydney days before the company formally went into administration, leaving up to 1,500 workers in the UAE out of pocket.

Three executives then left the country and returned to Australia, the report added.

ABC claimed the transfer was ordered by Hastie’s head office in Sydney and came after executives had failed to negotiate a restructuring deal with banks

While no unlawful activity has been suggested, ABC said the transfer of funds and the exodus of management has “left Hastie’s head office in Dubai with little or no money to cover the entitlements of around 1,500 workers, some of whom are expatriate Australians.”

Former Hastie Group chief executive Bill Wild said a lot of the blame for the company going bust can be attributed to a series of bad acquisitions in the Middle East. Wild highlighted the purchase mechanical and electrical contractor Rotary Humm, whose losses resulted in a massive writedown for Hastie.

”They bought companies that were worth nothing, it was a disaster,” he told ABC News. ”But the companies weren’t worth two bob. They started hiding losses and burying stuff in the balance sheet,” he added.

Wild reported that issues with Rotary Humm’s projects in Dubai and Abu Dhabi also led problems and resulted in a writedown of US$50m November.

According to reports, if administrators do not reach an agreement with creditors, they will embark on steps to wind up the business.

The UK and Ireland subsidiaries of Hastie Group are separate corporate entities, and have not gone into administration.

Saudia catering unit to list on July 9

Saudi Airlines Catering Co will commence trading on the kingdom’s stock exchange on July 9, a bourse statement said, after completing a 30-percent initial public offering which was more than twice covered by investors.

The catering unit of Saudi Arabian Airlines raised 1.3 billion riyals ($346.7 million) from the share sale, which was sold to the public between June 18-24 following a bookbuilding period involving institutional investors.

The sale of shares in the firm, delayed since late-2010 due to issues securing regulatory approval, had been keenly awaited by investors as it is the first part of the Saudi flag carrier, one of the kingdom’s largest state-owned entities, to be listed on the stock market.

Saudi Arabian Airlines started a process of privatisation in 2006 by splitting into six units: catering, cargo, maintenance, airlines, flight academy and ground handling. It plans to privatise each unit and offer shares in them to the public.

The ground services unit is expected to be the next to offer shares to the public, according to bankers in the kingdom.

In total, 24.6 million shares priced at 54 riyals were offered in Saudi Airlines Catering Co, with half of each being allocated to retail and institutional investors.

The retail tranche was 2.2-times covered, while the institutional piece saw subscription worth twice the allocation, according to figures from the lead manager, Saudi Fransi Capital – the investment banking arm of Banque Saudi Fransi.

Saudi Hollandi Capital, a unit of Saudi Hollandi Bank, underwrote the offering alongside Saudi Fransi.

Shares in Saudi Airlines Catering Co will be classified under the Agriculture and Food Industries section of the Tadawul index.

GCC urged to allocate more funds to setting up customs union

A GCC committee has recommended finance ministers allocate more funds to the development of clearing house operations in the six member states, in a bid to speed up the process towards setting up a GCC-wide customs union, it was announced on Wednesday.

Up until the end of 2011, around $2bn was spent on developing clearing house operations in the Gulf, but a special clearing house committee of the recently established GCC Customs Union has recommended more funds be allocated to improve and streamline procedures.

The comments came following a three-day meeting in Riyadh, which was held to discuss ways to “remove impediments in the way of some member states that are experiencing difficulties in running their clearing houses’ operations with aplomb,” the GCC Secretariat said in a statement.

“The committee also agreed on allocating to each member state the right to impose a certain quota of tariffs on foreign imports that have been transported from one member state to another,” the Kuwait News Agency reported.

The meeting in the Saudi capital was part of a step towards setting up a common customs union across the six GCC states, in a bit to improve the flow of goods and services.

The amount of red tape involved in the movement of goods among the GCC member states has long been cited as one of the main obstacles to trade in the region.

“There is still too much red tape. Too much paperwork… [the] challenge of moving goods is very frustrating,” Mohammed Alshaya, executive chairman of Kuwait-based MH Alshaya Co, which manages over 55 brands, including HM, Debenhams and Starbucks, told Arabian Business recently.

DNO boosts Iraq output, resumes Yemen operations

Norwegian oil firm DNO International said it is ramping up oil production in Iraq as it confirmed an oil discovery in the country’s resource-rich Tawke field and has resumed drilling operations in Yemen.

DNO, which explores and produces oil and gas in Iraq and Yemen and plans to expand activities in North Africa and the Middle East, had a gross production of 50,948 barrels of oil equivalent per day in the first quarter in the Kurdistan region, making up the bulk of the company’s output.

“In parallel with its stepped up operational activities in the Kurdistan Region of Iraq, the company continues to ramp up production and sales of oil to the local market,” it said in a statement on Thursday, without providing further details.

Asked how higher production and sales in Kurdistan could affect earnings, DNO spokesman Tom Bratlie said: “We expect that the second quarter will be in line with our guidance.”

DNO shares were up marginally in early trade, outperforming a small decline on the Oslo benchmark index.

DNO also confirmed oil in its Peshkabir-1 well, in an area west of its prize Tawke field in the Kurdistan region, which is currently producing oil.

It will now undertake a detailed evaluation of the results, temporarily suspending the well for possible reentry later this year.

DNO, one of the first oil firms to enter Iraq after the U.S.-led invasion that toppled Saddam Hussein, is halfway to its planned 3,085-metre depth in its Tawke-18 well.

DNO has been aiming for Tawke to produce 100,000 barrels per day before the end of this year.

DNO also provided an update on its activities in Yemen, where it has restarted active operations following the return of service contractors and rig personnel.

Yemen’s oil and gas pipelines have long been targets of attacks by militants in the unstable and impoverished country, but attacks on energy infrastructure have become more frequent since anti-government protests last year created a power vacuum.

Drilling in DNO’s Tsour-27 well was due to start on July 2 while the company expects to produce its first oil in Yaalen at the end of 2013. Early production capabilities in this well could deliver 5,000 barrels of oil per day and output could double at a later stage, the firm said.

Qatar-backed VW, Porsche shares gain on tie-up plans

Shares in German carmaker Volkswagen jumped on Thursday after its agreement to buy the remaining half of sports car maker Porsche. Gulf state Qatar owns significant stakes in both companies.

Europe’s second largest carmaker saw its shares rise 5.3 percent and Porsche’s holding company stock was up 1.3 percent after the announcement VW would pay 4.46 billon euros ($5.9 billion) in cash for the 50.1 percent of Porsche’s autos business that it did not already own.

“VW is getting a good deal,” said London-based Morgan Stanley analyst Stuart Pearson, predicting in a note to investors that its completion would lift VW earnings by 6 percent next year. “Porsche is the world’s best premium car story,” he said.

With sales volumes running close to 20 percent above their previous record, Porsche’s main challenge is “securing sufficient production capacity”, and integration with VW may help, Pearson added. VW already plans to begin assembling some Porsche models in its own plants.

VW has been pushing for rapid integration of Porsche’s automotive businesses to generate annual cost savings of 700 million euros and erase about 2 billion euros of debt at the sports car maker’s holding company.

Both carmakers have strong links to Qatar, with the Qatar Investment Authority (QIA) owning 17 percent of VW and a 10 percent stake in Stuttgart-based Porsche.

Porsche and VW agreed a merger in August 2009 after the maker of the iconic 911 sports coupe racked up more than 10 billion euros of debt attempting to buy VW, pitting the Porsche family against the rival Piech dynasty.

VW had abandoned the earlier merger plan last September, citing unquantifiable legal risks from lawsuits filed by short-sellers in the United States and Germany who accuse Porsche of secretly piling up VW shares during its failed takeover attempt, causing investors to lose billions of dollars.

At a press conference at its Wolfsburg, Germany, headquarters on Thursday the company said it expected the integration of Porsche to be fully ratified by August 1.

Full consolidation of Porsche’s auto-making operations will boost VW’s full-year financial result by more than 9 billion euros and shrink its net liquidity by about 7 billion euros, the company has said.

Both companies had for months been exploring ways to avoid taxes of as much as 1.5 billion euros that would have been incurred if VW were to seal the purchase before August 2014.

Submitting a single common VW share to Porsche SE may classify the deal as a restructuring under Germany’s so-called reorganisation tax law, enabling VW to complete the transaction ahead of schedule without incurring a huge tax bill.

QIA, Qatar’s sovereign wealth fund also owns a 5.2 percent stake in Tiffany, the US-based jewellery retailer, London department store Harrods and a one percent stake in LVMH, the French luxury group which owns Louis Vuitton.

* With Reuters

Drew Brees Tops the Power 100 in 2012

Drew Brees, the New Orleans Saints’s popular quarterback, had an exceptional season in 2011, breaking a number of records. It reaffirmed his elite status and catapulted him to new levels of fame and influence.

The 6 ft., 209 lb. quarterback broke Dan Marino’s 27-year-old National Football League record for most passing yards in a season, finishing the season with 5,476 yards. Brees, 33, also completed a record 71.2 percent of his passes and threw for more than 300 yards in 13 of 16 regular-season games, the most in NFL history.

That performance, coupled with lingering goodwill for the role he played in helping the City of New Orleans claw its way back from Hurricane Katrina’s devastation, vaulted Brees to the No. 1 spot in this year’s Power 100, a ranking by CSE, an integrated sports and marketing firm in Atlanta, and Horrow Sports Ventures that uses data from Encino (Calif.)-based research company E-Poll Market Research.

CSE evaluated about 600 of the best-performing athletes from a pool of 3,000 based on statistics, the popularity and viewing audience of their sports, endorsement earnings, and their reach on social media. Nielsen/E-Poll N-Score data, based on surveys that evaluate such factors as players’ name and face awareness, appeal, influence, and trustworthiness, were also included to measure athletes’ endorsement potential. (Here’s more about the methodology.)

Football Dominates the Pack

The NFL dominated this year’s Top 100 list with 26 players, followed by the National Basketball Assn., with 20 players, and Major League Baseball, with 16.

In 2011, Brees led the Saints to a 13-3 regular-season record (later losing to the San Francisco 49ers in the playoffs), and his “record-breaking on-field performance, combined with universal recognition of his charitable and community work” pushed him to the top spot, says Rick Horrow, president of Horrow Sports Ventures. The Brees Dream Foundation, which he founded in 2003, has contributed over $7 million to cancer research and care and to rebuild schools, parks, playgrounds, and athletic fields in New Orleans, San Diego, and Purdue, Ind., according to the foundation’s website.

“He’s clearly an endorsement darling now,” says Horrow. The quarterback earned $16 million in salary and endorsements in 2011, according to data from CSE.

Brees first appeared in the 2010 Power 100 at 25th place. He led the Saints to their first-ever Super Bowl victory that year and has since soared in the ranking, to seventh place in 2011.

Absent: Lance Armstrong

Rounding out this year’s top five: Green Bay Packers quarterback Aaron Rodgers (who had $19 million in earnings, estimates CSE), New England Patriots quarterback Tom Brady ($28 million), Miami Heat basketball forward LeBron James ($61 million), and tennis champion Rafael Nadal ($21.7 million).

Newcomers to the list include Novak Djokovic (who had a near-perfect tennis season) at No. 9, rising golf star Rory McIlroy at No. 21, and the Los Angeles Dodgers’s Matt Kemp, who signed a contract extension worth $160 million over eight years, the largest in National League history, at No. 32.

As Brees rose to the top, last year’s most powerful athlete, Peyton Manning, fell to 51st place because of injuries. Golfer Phil Mickelson dropped from No. 4 to No. 18 after a disappointing season. Lance Armstrong, No. 8 last year, fell off the list entirely. The pro cyclist announced his retirement in February and came under scrutiny for alleged drug use; Armstrong denied doping allegations.

“The real key is measuring how these superstars perform,” says Horrow. In athletics, power means “earning power for athletes, owner, agents, communities, and corporate brands.” As this year’s list shows, an athlete’s value can change dramatically in one year.

(Click here to see the complete 2012 Power 100.)

25 Ways to Make LinkedIn Work for You


LinkedIn is a networker’s dream: an easy way to learn about, and reach out to, millions of businesspeople and thousands of employers. Yet many LinkedIn users don’t take advantage of the site’s features even though the vast majority are free.

Here are my top 25 recommendations for getting past “Well, I’ve got a login” and making the site really work for you, whether you’re job hunting, hiring, growing your entrepreneurial business, or just seeing and being seen in the online branding arena.

You’ll start by creating your LinkedIn profile and adding connections. Then you’ll use LinkedIn’s fancier features to do such things as reach out to friends of friends, join a Group or a LinkedIn Answers conversation, or enhance your profile with apps.

Our first 13 LinkedIn tips focus on your profile:

Name: Use your “business” name. My given name is Elizabeth but no one calls me that, so I use Liz in my profile and on my business card. Don’t add extraneous information in the Name field (like “5,000+ connections”) unless you want to brand the size of your Rolodex rather than yourself.

Headline: Your LinkedIn headline, just below your name, is a huge branding opportunity. When another user searches the LinkedIn user database, your name and headline are the only things they’ll see before deciding whether to click on your full profile. Make your headline count. “Marketing Manager” isn’t much of a branding statement, but “Marketer Specializing in Social/Content Marketing for Hospitals” separates you from the pack.

Photo: Don’t leave your LinkedIn profile photoless. Upload any decent-looking, digital head-and-shoulders photo. You don’t need business attire for this shot. Just use a photo that sends the message, “This is a business or professional person,” meaning (as you may have guessed) last year’s beach vacation shots might not be your best pick. (Then again, it all depends on your brand.)

URL: Make sure your LinkedIn profile bears your own stamp in the form of a personalized URL, like http://www.linkedin.com/in/lizryan. Once you’ve got that customized URL, you can use it on your résumé, in your e-mail signature, and on your business card.

Summary: Here’s where you can tell your story. “Results-oriented Finance professional” makes you sound like a robot or a zombie. “I started out in Accounting before morphing into a Sales Operations guy” gives us a feel for your path and your personality. Have fun with your LinkedIn summary—it’s the one free-form (and long!) field on LinkedIn where you can speak to the reader (the person viewing your profile) in a human voice.

Specialties: The Specialties section of your LinkedIn profile is another great field. You can use terms like “Supply Chain Management” and “Safety Training,” but you can also talk about your Irish wolfhounds and salsa dancing in this field. Prospective clients and employers want real, live, entangled, interesting people on their teams. Business is personal these days, and your outside-of-work interests (the ones you care to share, anyway) are part of your professional persona.

Add Sections: A powerful new LinkedIn feature is Add Sections, which lets you amplify your profile with additional information about past jobs, projects, organization memberships, and more. Click on the Add Sections link to preview the various enhancements you can make to your profile just by providing a bit more background.

Work History: It takes only a few seconds to upload your text résumé to LinkedIn, and it will save you time creating the Work History section of your profile. You can amplify this field with your proudest accomplishments or particular responsibilities you want readers to know about. It’s important to include the dates (and employer names) for each past assignment so LinkedIn can match you up with colleagues who have worked alongside you.

Additional Information: Your profile’s Additional Information field lets you round out the “Story of You” with the URL for your website and/or blog, your Twitter account, honors and awards you’ve won, and your interests (the books you read, the sports you play or follow, or anything else you want to share).

Personal Information: You can list as little or as much personal information as you want on your profile. It’s your choice.

Education: Including accurate dates in the Education section of your profile will make it easy for the LinkedIn database elves to match you up with classmates who may be on LinkedIn now, waiting for you to reach out and refresh the connection.

Contact: The “Contact [Person X] for:” section toward the bottom of your profile is another great field because it forces you to think about what you want from LinkedIn and from your networking in general. This is where you get to decide which types of contacts you want and don’t want. Which conversations are you willing to have, and which ones are a waste of your time?

Applications: You can attach Box.net files to your profile in order to showcase events you’ve produced, articles you’ve written, or photos you’ve taken, or to append a full-text résumé to your profile (for instance, if you’re a graphic designer and want to show off what you can do). I could write multiple articles about LinkedIn Applications, but for now I’ll just say check them out.


Your LinkedIn profile is in great shape. Now all you need is a network. Here are four tips for bringing your crew back into reach or converting 3D friends and contacts into LinkedIn connections.

Connections: Look for the green Add Connections bar on nearly every page of LinkedIn. Use this link to invite folks to join your first-degree network. In most cases you’ll need their e-mail addresses. If LinkedIn gives you the opportunity (some invitation channels do, and some inexplicably don’t), change the standard boilerplate invitation language to sound more like your own voice. Be wary of sending invitations to people who aren’t expecting them—you could lose your invitation privileges that way.

Colleagues: The Colleagues feature lets you quickly see which LinkedIn members have worked with you during your career. That’s incredibly handy because we can easily forget people, and we often don’t have current e-mail addresses for our long-ago workmates.

Address Book: If you have an address book on Gmail, Hotmail, Outlook, or another popular e-mail application, you can download your entire contact list into LinkedIn. Don’t panic—LinkedIn won’t send spam; it will just tell you which of these contacts are already using LinkedIn.

Classmates: Just as the Colleagues feature does, Classmates lets you reconnect with people from your past. Invite people to join your network via the Classmates channel with caution, because this is where LinkedIn invitation spam tends to congregate. A helpful reminder in the body of your invitation (“I remember how much fun it was traveling to Tel Aviv with you in 1993.”) can help refresh the memory of classmates you haven’t been in touch with for a while.


My last eight LinkedIn tips will get you using the site actively rather than sitting around waiting for people to reach out to you. Try one a day and build up your LinkedIn chops from “novice” to “cocky” status by next weekend.

People Search: Use the People Search link in the upper righthand corner of nearly every LinkedIn page. (I’ve had no luck whatsoever with the quick-search feature; I use Advanced People Search, however, several times a day.) You can search the LinkedIn database on every imaginable field, from a person’s name or industry to his or her virtual proximity to you. Searching LinkedIn is a free and easy way to build up your business-intelligence acumen and data warehouse. Try it!

Companies: LinkedIn’s Companies database is another treasure trove of useful information for job seekers, business developers, headhunters, and everyone else. When you find a company that interests you, click once to “Follow” that company and receive updates on its hires and other news.

Connections: When you’re ready to use LinkedIn as a networking tool, browse your first-degree connections’ connections to find someone you’d like to talk to. Make sure you appeal to the recipient and aren’t just asking a favor. You can make contact with the one-hop-away networker using the Get Introduced Through function.

Answers: LinkedIn Answers is a feature that lets you ask and answer questions among the massive LinkedIn user community. I use Answers about once a month to inquire about research studies or to get opinions on issues I’m thinking or writing about. And I respond to queries posted by others on topics ranging from HR policies to breast-feeding at work. Answering and posting your own LinkedIn questions adds to your understanding of business topics and increases your networking visibility and credibility.

Groups: LinkedIn Groups are magnificent idea-sharing and networking tools because they bring together subsets of the overall LinkedIn population, making it easy to converse and view one another’s profiles. Some Groups require approval from the moderator to join.

Jobs: LinkedIn includes job openings, but most of the time when I ask job seekers, “Where are you focusing your search?” they mention Monster, Craigslist, and jobs aggregators Simply Hired and Indeed. Those are all great sites, but let’s not overlook LinkedIn, which is unique because it links job openings to actual LinkedIn profiles. In an era when Black Hole recruiting abounds, it’s nice to be able to view a job listing AND the profile of the person who posted it.

Updates: Just like Twitter and Facebook, LinkedIn updates keep your network current on what’s new in your life and work. You can update your status on the LinkedIn site or with a multiple-updates application like Hellotxt (which will update your Twitter feed, Facebook status, and LinkedIn status all at once).

Endorsements: LinkedIn endorsements, also called Recommendations, are an essential piece of the online networking-and-branding puzzle, but we’ve saved them for last because they require a bit more thought and care. It’s possible to ask people to endorse you on LinkedIn, but I recommend endorsing others first and letting them return the favor for you (LinkedIn prompts them to endorse you once you’ve completed a Recommendation for them).

You must have a first-degree connection with someone in order to endorse them. Make sure your endorsements are pithy and specific. The presence of Recommendations on your LinkedIn profile improves your results in database searches … and LinkedIn endorsements have their own power, especially if they’re well-written.

To give you an idea of how robust LinkedIn’s features are, we’ve barely scratched the surface here. Try some of our 25 tips this week and grow your online networking mojo in the process.

2012 Honda CR-V

Editor’s Rating:

The redesigned Honda CR-V’s fuel efficiency, interior, and standard equipment are better than ever. Too bad it’s so underpowered

The Good: Improved mileage, looks, and interior; top safety rating; more standard equipment.
The Bad: Still only comes with a small, four-cylinder engine and five-speed automatic.
The Bottom Line: Honda loyalists will love the new CR-V; others should check out the new Ford Escape and Toyota RAV4 before buying.

Make: Honda
Model: CR-V
Model Year: 2012
Body Type: Four-door, five-passenger
Price Class: Mid-Range
Product Name: Honda CR-V

Up Front

You have to wonder how long Honda (HMC) can keep riding on its laurels. Each time the company redesigns one of its top-selling models, you have the feeling that designers were on the defensive, making as few changes as they could get away with just to avoid falling behind faster-moving rivals. That’s what Honda did with the new Civic, earning lukewarm reviews and prompting Consumer Reports to drop the model from its Recommended list. Now there are reports that Honda will refresh the Civic again for 2013 to address some of the criticisms. (The company has no comment.)

I have the same feeling about Honda’s redesign of its popular CR-V compact SUV as I did about the new Civic: It isn’t quite bold enough. Honda loyalists will love the new model. But the 2012 CR-V, which is due out Dec. 15, comes up short in some respects, especially if you don’t exactly fit the middle-of-the-road buyer profile Honda is aiming at. My advice is to wait and check out the redesigned 2012 Toyota Toyota (TM) RAV4 (due out Dec. 20) and the upcoming 2013 Ford (F) Escape (due out next spring) before buying a CR-V. The Escape has already overtaken the CR-V as the top-selling SUV in America this year, and the new Escape promises to be much better than the current one.

To be sure, the new CR-V is an improvement over the old one, too. It’s better-looking, quieter, and has a nicer interior, slightly more luggage space, more standard equipment, and a better all-wheel-drive system than the previous model’s. Fuel economy is up, too. With front-wheel drive, the 2012 CR-V is rated at 23 miles per gallon in the city, 31 on the highway, and 26 on average (2 mpg more than the outgoing CR-V). With all-wheel drive, it’s rated at 22/30/25 (also up 2 mpg).

However, the new CR-V shares some of the weaknesses of the previous model. Notably, it only comes with one engine, a 2.4-liter, 185-horsepower four-cylinder engine. That’s an increase of a mere 5 hp, and the engine still provides barely adequate oomph.

The RAV4 is available with a V6 that makes it as quick as some sport coupes. The 2013 Escape will be offered with three engine choices, a basic 2.5-liter four-banger and two turbocharged four-cylinder versions of the company’s marvelous EcoBoost engine, one a 1.6-liter and the other a 2.0-liter. With the latter EcoBoost engine, the new Escape also promises to be much quicker than the Honda.

With the smaller EcoBoost engine, Ford says, the new Escape will beat the fuel economy of competitors, including the CR-V. Indeed, that version of the Escape is expected to be so efficient that it’s replacing the Escape Hybrid for 2013. A version of General Motors’ (GM) Chevy Equinox already matches the CR-V, getting 32 mpg on the highway and 26 mpg on average.

One reason the CR-V isn’t the clear fuel economy leader, I suspect, is that Honda skimped on technology. The company decided to stick with a five-speed automatic as the only choice of transmission, while Chevy, Ford, Hyundai and Kia have all moved to more efficient six-speed automatics (the Escape, Hyundai Tucson, and Kia Sorento also are available with a stick shift). Honda also didn’t go with more efficient direct fuel injection in the new CR-V’s engine, as Ford has done in its EcoBoost engines.

Pricing hasn’t been announced yet but Honda says the new CR-V will continue to sell in the same $21,000-to-$30,000 range as the previous model, which means it will probably continue to be slightly more expensive than its competitors. (Keeping the price under 30 grand is one reason you can get a new CR-V with a rear-seat entertainment system or a navigation system—but not with both.)

Safety remains a strong selling point: Honda expects the new CR-V to earn top five-star government safety ratings and to be a Top Safety Pick of the Insurance Institute for Highway Safety. Standard gear includes stability control, braking assist, and front-side and head-protecting side curtain air bags.

The CR-V has continued to sell well, despite weather-related disruptions in Asia. U.S. sales of the CR-V were up 11.1 percent, to 180,361, in the first 10 months of this year compared with the same period last year. However, the Ford Escape’s sales soared 31.4 percent, to 206,896, during the first 10 months of this year. Other rivals also are gaining ground on the CR-V: Chevy Equinox sales were up 43.2 percent, to 160,143, and Kia Sorento sales jumped 22.7 percent, to 109,903, through October.

Toyota has been the big loser: RAV4 sales fell 24.3 percent, to 106,800, during the first 10 months of this year. But the new CR-V could suffer, too, if consumers don’t cotton to the redesign and the RAV4 makes a comeback.

Behind the Wheel

The CR-V has never been much fun to drive. When you punch the gas to, say, accelerate onto a freeway, the engine really strains and fuel economy plunges. Of course, the same is true of rival models powered by the base engine, but you also sometimes have the choice of a more powerful engine if you want one.

In the test drives I did at a Honda press event, I wasn’t able to time the 2012 model, but I’d guess it accelerates from zero to 60 about as slowly as the outgoing CR-V—in about 10 seconds. With six-cylinder power, the current RAV4 jumps from zero to 60 in about 6.5 seconds. The 2013 Ford Escape may offer similar quickness when powered by the 2.0-liter EcoBoost engine.

The CR-V’s new motion-adaptive power steering system doesn’t provide much feedback to the driver, but it’s great for maneuvering in tight spaces. Honda also has upgraded the CR-V’s all-wheel drive to an electronically controlled system designed to respond instantly to even slight wheel slippage. The suspension has been softened and made more car-like, too.

A feature I really like is Eco Assist. You push a button on the dash and the vehicle goes into a fuel-saving mode that doesn’t seem to affect acceleration much. Numerous readouts help the driver conserve gas. Among other things, a ring around the right side of the speedometer glows green when you’re driving efficiently. I found I could easily achieve the CR-V’s rated mileage.

The CR-V’s cabin feels more upscale than before. The center stack is nicer-looking, and attractive leather upholstery continues to be offered on the high-end trim levels. However, there’s still too much hard plastic on the dash and doors, and there are too many seams in the dash, as if it were cobbled together from pieces. The dash in the new Ford Focus, for one, is less busy-looking and more attractive.

Bluetooth connectivity is standard on the new CR-V, as are both a Pandora Internet radio interface and SMS text-messaging. A backup camera and hands-free phone capability also now come standard.

Luggage space behind the CR-V’s rear seats is up 1.5 cu. ft., to a voluminous 37.2 cu. ft., expanding to 70.9 cu. ft. with the rear seats folded down. One of the CR-V’s handiest new features allows the rear seats to fold down nearly (but not quite) flat in a 60/40 pattern at the flick of a lever. There had been some speculation in the automotive press that Honda would offer a third-row seat in the CR-V, to match the one offered in the RAV4, but that didn’t happen.

Buy It or Bag It?

The CR-V remains an excellent vehicle. Honda loyalists who simply go out and buy one will be happy with their decision. However, the Kia Sorento is cheaper, and the new Escape and RAV4 offer options the Honda doesn’t. In short, like the Civic, the CR-V is no longer the clear top choice in its segment.

Click here to see more of the 2012 Honda CR-V.

Engine woes again force A400M out of air demo: sources

Wed Jul 4, 2012 2:54pm EDT

PARIS (Reuters) – Airbus (EAD.PA) is pulling Europe’s A400M airlifter out of flying displays at next week’s Farnborough Airshow due to continued engine problems, forcing it to sit out popular annual stunts for the second year running, industry sources said.

The move repeats a decision at last year’s equivalent event outside Paris, but is not expected to disrupt plans to deliver it to its first customer, France, around the end of the year.

The A400M cost 20 billion euros to develop and is designed to add airlift capacity for seven European NATO nations — Britain, Belgium, France, Germany, Luxembourg, Spain and Turkey.

It has suffered a series of teething problems that led to a four-year delay and billions of euros in cost overruns, mainly due to engine software delays and glitches with other systems.

A gearbox failure forced Airbus to scratch the A400M from the flying display list on the eve of last year’s Paris show.

Continued problems mean it will again be withdrawn from the prestigious flight displays at next week’s Farnborough Airshow in the UK, but it will be flown in and parked on display for visitors from potential importing countries and other delegates.

“Based on engine issues it has been decided not to participate in the flight display but the aircraft will be on static display,” an industry source told Reuters.

The A400M has not been grounded and has been seen at several events in the past year. But the gearbox problems have led to restrictions that would rule out the kind of stunts popular at Farnborough, such as the A400M’s trademark steep, slanting turn.

Airbus last week announced the A400M and A380 — respectively Europe’s largest defense and commercial aviation projects — would be on the Farnborough flying display, which unusually this year also features a 787 jetliner from Boeing.

Airbus had no immediate comment on any change in its air show plans but stressed its delivery plans were on schedule.

“The engine maturity is still not where we want it to be, but the schedule is not affected and we expect the first delivery at the turn of the year,” an Airbus spokesperson said.

Maturity refers to the speed at which problems common in aircraft developments are ironed out in flight testing.

Eyes in the aircraft industry will be on the loss-making aircraft’s status as it awaits full certification around mid-year, a step that must be completed before it can be delivered and bring in further payments for Airbus parent EADS (EAD.PA).

“The problem with the gearbox on the A400M is not completely resolved,” said a source with direct knowledge of the project, adding, “It’s pulling too hard”.

The A400M is powered by the West’s largest turboprop engines and designed to perform multiple roles in remote or rugged locations, fitting between the smaller Lockheed (LMT.N) C-130 turboprop and larger jet-powered Boeing (BA.N) C-17.

Air chiefs from nations that launched the A400M are due to adopt the airplane – nicknamed “Grizzly” by its pilots – by renaming it “Atlas” at a ceremony at a military show on Friday.

(Reporting by Cyril Altmeyer, Tim Hepher; Editing by Christian Plumb)