United, Continental boards OK merger - sources

* UAL/Continental boards vote to merge, sources say

* Deal expected to be announced on Monday

* Airline to be based in Chicago

* Deal may generate $1.2 billion in cost, revenue benefits

* Combined airline to carry United brand (Recasts. Adds details, analyst comment, background)

By Kyle Peterson and Jui Chakravorty

Defense News: CHICAGO/NEW YORK, May 2 (Reuters) - UAL Corp (UAUA.O), parent of United Airlines, will buy Continental Airlines Inc (CAL.N) for $3.2 billion, forming the world's largest carrier in a merger that further shrinks the embattled U.S. airline industry and could drive up air fares, sources said on Sunday.

The boards of directors of both companies unanimously approved the deal, which was expected to be announced by the carriers on Monday morning, sources familiar with the discussions said. UAL and Continental declined to comment and neither airline has confirmed the votes.

If given regulatory approval, the carrier would be called United Airlines and would be based in Chicago, with over $29 billion in annual revenue, a source said. The deal would generate up to $1.2 billion in revenue and cost benefits for the combined company.

"The combined firm would have more staying power than each of them individually," Robert Mann, airline consultant at RW Mann & Co, said. "Part of it is the consolidation provides pricing power and the opportunity for pricing power for the entire industry."

"The margins on the combined business would be better," Mann said. "The share of revenue that's consumed by revenue will be lower. Margins will be better."

The airline industry is recovering from an economic downturn that drained travel demand and forced carriers to downsize.

Experts have said consolidation would lend much-needed stability to the industry, which has been dogged by low-fare competition, terror concerns, volatile fuel prices and overcapacity.

ALL-STOCK DEAL

UAL and Continental have agreed to an exchange ratio of 1.05 UAL shares for each Continental share in all-stock deal, the sources said. That value would be determined by the market, and could change by the time the deal closed.

Based on United's stock price of $21.83 on Friday afternoon, and Continental's 139.6 million outstanding shares as of April 21, United would pay $3.2 billion for Continental.

Based on current shares outstanding, a combined company would have 314.5 million shares, and UAL shareholders would own roughly 53 percent of the new company.

Under the terms for the all-stock merger, UAL Chief Executive Glenn Tilton would become non-executive chairman of the combined carrier while Continental CEO Jeff Smisek would become chief executive.

The carriers are planning a 16-member board with six directors from each airline, plus Tilton and Smisek, and two seats from labor unions. The airlines hope for US regulatory approval of proposed merger by year's end.

The new company on paper now would have a combined work force of nearly 90,000 employees and a combined fleet of 693 planes.

United Airlines took in more than $16 billion in operating revenue for 2009. The carrier has hubs in Los Angeles, San Francisco, Denver, Chicago and Washington, D.C. The carrier boasts a strong presence on Asia-Pacific routes, Europe and Latin America.

The carrier has 46,000 employees and a mainline fleet of 333 planes made by Airbus and Boeing Co (BA.N).

Continental, which saw $12.6 billion in annual revenue for 2009, has about 41,000 employees and hubs in Newark, New Jersey, Houston and Cleveland.

UAL and Continental are both members of the global Star Alliance of airlines. UAL shares trade on Nasdaq. Continental shares trade on the New York Stock Exchange.

LONG TIME COMING

The leaders of both airlines had engaged in merger talks before, the most recent being in 2008, when Continental walked away at the last minute out of concern for UAL's then-fragile financial position.

Continental and UAL later agreed to link up in a strategic global alliance. The most recent round of talks were completed in about three weeks, a source familiar with discussions said.

Some industry experts believe that one airline merger could spur others and that several different combinations of major airlines are possible. The last major airline merger was in 2008 between Delta Air Lines (DAL.N) and Northwest Airlines to form what is currently the world's largest airline.

UAL and US Airways Group (LCC.N) also were in merger talks this year, but US Airways pulled out last month. US Airways CEO Doug Parker, a vocal proponent of airline consolidation, has said that any mergers are good for the industry because they pull capacity out of the bloated system.

DTN News: A War Worth Fighting, To Cease And Desist Drug Supply To Save Humanity

Defense News: DTN News: A War Worth Fighting, To Cease And Desist Drug Supply To Save Humanity

Source: DTN News / Int'l Media
(NSI News Source Info) BOGOTÁ, Colombia - May 3, 2010: I'm in the heat of a war right now that we've been fighting for years. But it's not Iraq or Afghanistan.
Yet this one also has machine guns and grenades, combat aircraft low in the sky and satellite reconnaissance overhead. And, like Iraq and Afghanistan, the bad guys in this war shoot back. It's a war into which we've already poured billions of dollars and are still pouring more. But for my money, it's a war worth fighting.
It's the war on drugs. That may sound like a political term in the United States, but it's a very risky, very real war down here in Colombia. In the past week, with a team from HDNet Television's "World Report," I've flown out on heavily armed and armored Huey helicopters for invasions deep in the jungle to disrupt the production of cocaine.
In one raid, the people who worked in a primitive lab to refine cocaine's basic ingredient, coca, had gotten out just ahead of us; the residue of the coca leaves was still wet.
With government boots on the ground, their livelihood is threatened. Which is why, when we'd been down just 10 minutes, the Colombian troops we were with told us we had to go — and go now! There were signs that the bad guys, many of whom are part of powerful guerrilla groups, were heading back. We hoofed it along a trail cut with machetes to the landing zone a half mile from the lab; the narco-traffickers deliberately set up shop away from clearings so they'll have enough warning from the helicopters' noise to bail out. With machine-gun snipers covering the jungle and two more with mounted guns boarding with us, we lifted off and circled to provide cover while a second Huey swooped in to pick up the rest of the troops.
From here, the war on drugs is no game.
The Colombians do most of the heavy lifting, but we train them and pay for everything they have, from helicopters to weapons to uniforms to canteens. One American here told me, "Everything is ours, right down to their lip balm."
Plenty of our own people are in the line of fire, too. Seven days a week, civilian U.S. pilots in the steamy interior of the country fly spray planes — the kind you'd see protecting a farm at home — to destroy coca crops in the jungles of Colombia. The difference from agricultural spray planes is that these are heavily armored on their underbellies; they get shot at on a regular basis.
We went on a helicopter defensive cover mission overhead one day. These guys fly out up to 100 miles and then, using everything from informants' tips to satellite coordinates to find the coca, they release a short dose of herbicide. It's the same stuff many of us use in our gardens: RoundUp.
It's a dirty, dangerous war. I met some agents from the U.S. Drug Enforcement Agency near the border with Ecuador. Their specialty is intercepting drug traffickers. They showed me a big boat they had captured. With about a foot of fiberglass showing above the water's surface, it's not a submarine but a "submersible," built for just one trip before it's trashed.
If illegal cocaine makes it to the Pacific, it gets transferred onto a boat like this, up to 10 tons of it. That's a lot of ruined lives in our American cities.
Are we winning this war on drugs? Maybe the fairest answer is we're not losing. One American I met in the jungle told me, "At worst, we're holding the line. At best, we're getting a little ahead." But the same day, a Colombian major asked me to tell the American people this: "We are doing all we can. But we cannot fight consumption in your country. You have to do that." He's right.
Greg Dobbs is correspondent for the program "World Report" on HDNet Television.

DTN News: The IDF Expands its Elbit Systems UAS Fleet ~ Elbit Systems

Defense News: DTN News: The IDF Expands its Elbit Systems UAS Fleet ~ Elbit Systems Awarded $50 Million UAS Contract by the Israeli Defense Ministry
*Elbit to supply the IDF with its Hermes(R) 900 UAS Systems, along with additional Hermes(R) 450 UAS Systems and an enhancement of the existing UAS intelligence capabilities
Source: DTN News / Elbit Systems Ltd.
(NSI News Source Info) HAIFA, Israel - May 3, 2010: Elbit Systems Ltd. (Nasdaq:ESLT - News) announced today that it was awarded an Unmanned Aircraft System (UAS) contract from the Israeli Ministry of Defense, valued at approximately $50 million. Under the contract, Elbit Systems will supply the Israeli Defense Forces (IDF) with its brand new Hermes® 900 unmanned systems along with additional Hermes® 450 unmanned systems to expand the IDF's current Hermes® 450 fleet. In addition, the Company will supply the IDF with an enhancement of its existing UAS intelligence capabilities. The contract will be carried out over a three-year period.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080408/300441 )
With enhanced endurance, the Hermes® 900 allows flight altitude of more than 30,000 ft, large payload capacity and flight capabilities in adverse weather conditions. The Hermes® 900 is based on the highly reliable and combat proven Hermes® 450 UAS, which has accumulated over 170,000 flight hours.
The new Hermes® 900 allows seamless integration with the IDF's existing Hermes® 450 UAS thanks to its universal command & control ground station (UGCS), which enables advanced mission management, automatic taxiing, autonomous flight and automatic takeoff and landing systems common to all the UAS in the Hermes® family. These advantages allow all Hermes® 450 operators to immediately integrate the Hermes® 900 into the existing UAS fleet, using the current infrastructure.
Joseph Ackerman, President and CEO of Elbit Systems, commented: "We are proud to have been selected by the Israeli Ministry of Defense in this UAS project, attesting to the IDF's high level of satisfaction with the performance of our UAS. By introducing the Hermes® 900 into our growing UAS portfolio, we continue to provide the IDF with effective solutions for its varying operational needs, ranging from the mini-UAS Skylark® I-LE operated by the Israeli Ground Forces, through the Hermes® 450 which plays a central role in the IDF's anti-terror efforts, to our brand new Hermes® 900." Ackerman added, "The IMOD's recent order furthers our position as a world leader in the UAS field, and we trust that many customers will follow the IDF's selection of the Hermes® 900, the newest addition to the Elbit Systems UAS portfolio."
About Elbit Systems
Elbit Systems Ltd. is an international defense electronics company engaged in a wide range of programs throughout the world. The Company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance ("C4ISR"), unmanned aircraft systems ("UAS"), advanced electro-optics, electro-optic space systems, EW suites, airborne warning systems, ELINT systems, data links and military communications systems and radios. The Company also focuses on the upgrading of existing military platforms, developing new technologies for defense, homeland security and commercial aviation applications and providing a range of support services.
For additional information, visit: http://www.elbitsystems.com/.

DTN News: US Turns Focus To Pakistan’s Conventional Defence

Defense News: DTN News: US Turns Focus To Pakistan’s Conventional Defence

Source: DTN News / Dawn By Anwar Iqbal
(NSI News Source Info) WASHINGTON, U.S.- May 3, 2010: The United States appears to have realised the importance of strengthening Pakistan’s conventional defence while also enhancing its capability to fight extremists.
In doing so, senior US officials also recognised Pakistan’s concerns about India and conceded that Washington’s growing ties with New Delhi were a cause of concern for Islamabad.
“We must continue to reassure Pakistan that as it combats the terrorist threat, it is not exposing itself to increased risk along its eastern border,” said Under Secretary of Defence for Policy Michele Flournoy while explaining why the United States needed to strengthen Islamabad’s conventional defence systems as well.
“Although extremist attacks have led to the repositioning of substantial Pakistani forces, Pakistan’s strategic concerns about India remain pre-eminent.”
Under Secretary Flournoy and other senior US officials who spoke to the House Armed Services Committee urged lawmakers to provide funding for billions of dollars of planned US military and civilian aid to Pakistan during the next five years.
Separately, another senior Pentagon official told journalists in Washington that the sale of F-16 aircraft to Pakistan later this year would be “a sign of this burgeoning relationship between us and increased defence cooperation between our two countries.”
In a related development, senior US State and Defence officials said the United States planned to provide $1.5 billion to Pakistan by September 2011 for buying military equipment.
During the same period, the United States also plans to reimburse about $2.3 billion Pakistan spent while fighting terrorists along the Afghan border. Of these, $600 million will be quickly transferred to Pakistan while the rest will be reimbursed by September 2011, when the current US fiscal year ends.
Besides providing military equipment, the United States also has accepted Pakistan’s position that it has genuine interests in Afghanistan and those interests need to be protected.
Meanwhile, the US media reports that the United States and Pakistan are establishing a joint military intelligence centre inside Pakistan.
The United States is also sending 50 aircraft technicians to Pakistan with four new F-16s it plans to hand over to Islamabad in June.
By September 2011, Pakistan will receive a total of 18 of these planes. A US military team will accompany these aircraft “to ensure that sophisticated, top-of-the-line avionics, weapons and data systems aboard the aircraft remain secure,” The Washington Post reported.
The planes, which for the first time will allow Pakistan to conduct night-time air operations, are far more advanced than the 30-year-old US aircraft that are the current mainstay of the Pakistan Air Force.
Currently, there are about 200 US military instructors in Pakistan, including 140 from a Special Operations training and advisory contingent.
The CIA also has sent additional intelligence-gathering operatives and technicians in recent months and plans are under way to establish a joint military intelligence processing centre in Pakistan.
Under Secretary Flournoy said the plans to help Pakistan strengthen its defence “remain vital to our overall goal of disrupting, dismantling and defeating Al Qaeda and to enhancing stability in a critical region”.
Key US lawmakers also back the new Pakistan policy, and have urged action to further increase educational opportunities for Pakistani military officers at US military schools, and faster movement to provide Pakistan with key military hardware, particularly helicopters.

DTN News: UAE May Fund Next-Gen Rafale

Defense News: DTN News: UAE May Fund Next-Gen Rafale

*Wants More Powerful Engine, AESA Radar
Source: DTN News / Defense News By ANDREW CHUTER and PIERRE TRAN
(NSI News Source Info) LONDON and PARIS - May 3, 2010: The United Arab Emirates and France are discussing a proposed joint effort to develop a more capable, new-generation Dassault Rafale strike fighter, sources in the Arabian Gulf and Europe said.
"The conversation has moved forward from buying the Rafale to how to co-develop the next-generation Rafale," a defense source in the Arabian Gulf said. The prospective new model would meet UAE requirements and "take the plane to the next level," the source said.
A co-development with a foreign customer and partner would be a big boost for the twin-engine fighter jet, which is seen in France as a jewel of aeronautical excellence and the crown of the country's arms-export efforts. Dassault Aviation has entered the Rafale in bidding for contracts in Brazil and India, and has offered it to Kuwait and Libya.
The UAE negotiations center on the systems and engine the upgraded aircraft would carry, the Gulf source said.
The main upgrades are said to be an active electronically scanned array radar, frontal sector optronics and an electronic warfare suite, systems supplied by Thales, and a 9-ton-thrust M88 engine, up-rated from the 7.5-ton engine that powers the French Air Force and Navy Rafales.
Last June, French President Nicolas Sarkozy said the United Arab Emirates was in discussions to buy the Rafale, which Dassault bills as an omnirole fighter. The jets would replace the Mirage 2000-9s bought from France in 1998.
Some 50 French executives were in Abu Dhabi in the week of April 12 as part of the talks, an executive at a rival fighter maker said.
"I can confirm the first," said a French executive close to the discussions. "We are working flat out on negotiating the contract and ancillary contracts."
The executive confirmed that the negotiations go beyond just a purchase, and are aimed at agreeing on co-development of an advanced version of the Rafale.
"There are, effectively, discussions between the two governments on how to finance the additional functionality," the executive said.
The co-development work is expected to take years, he said, adding that whether the work will make the new variant a "next-generation" Rafale is a question of semantics.
The executive said industry is working on the technical definition of the aircraft, while the financial aspects are being negotiated at the government level.
A June date for concluding a deal "is possible, not guaranteed," he said.
A second French defense executive said of the negotiations, "All the lights are green."
A Dassault spokesman would not confirm that a joint development effort might be part of the UAE-French discussion about the possible purchase of Rafales.
"Talks are continuing," he said.
Fighter Swap?
One European executive with knowledge of the deal said Paris has agreed to buy back the Mirage 2000-9s and put them into service with the French Air Force, then put its Mirage 2000-5s on the secondhand market and retire the Mirage 2000N nuclear strike version.
Asked about the buyback of Mirage 2000-9s, the Gulf source said, "It is all linked."
Such a deal would be expensive, said Etienne de Durand, director of security studies at the Institut Français de Relations Internationales, a Paris think tank.
De Durand said Rafale export sales help fund the development of new capabilities, maintain design skills and keep French industry at the cutting edge of world fighter technology. That is why France is ready to agree to extensive technology transfer to sell the Rafale to Brazil, and why "smart arrangements" are being offered to the United Arab Emirates, he said.
But de Durand said that it often takes years to see whether the arrangements really do make sense. Maintenance of technological capabilities needs to be balanced against funding the operational needs of the armed forces, notably among middle-rank powers such as Britain and France, he said.
If the deal brings Mirage 2000-9s into the French Air Force, it could reduce the money available for buying and upgrading the Rafale, de Durand said.
Privately, French Air Force officials worry about taking in the 2000-9, which will mean operating and supporting a mixed fleet when the Rafale was intended to replace seven different types of aircraft in the Air Force and Navy.
Engine Upgrade
Snecma, which declined to comment on the talks, announced several months ago that it was considering developing a more powerful variant of its M88 engine for UAE Rafales.
In a press pack distributed at the Singapore Air Show in February, the French aircraft engine and equipment maker said, "For the UAE Air Force & Air Defense, which require more power for enhanced combat agility and improved performance in very hot weather, Snecma is considering the development of a more powerful variant of the M88 jet engine.
"Snecma has already demonstrated the feasibility of the 9-ton version of the M88, allowing for the design-related risks to be under control."
Snecma would adapt the M88, not design a new engine, the company said.
Ordering Advanced Arms
The United Arab Emirates is known for funding state-of-the-art fighter development. In a forerunner to the potential Rafale deal, the Emirates funded the development of the Block 60 variant of the U.S.-designed F-16, adding an active electronically scanned array radar, new engine, electronic warfare and infrared gear, better cockpit avionics and conformal fuel tanks.
The Gulf state also has a history of working with France to develop advanced military equipment.
The Damocles laser targeting pod was co-developed for the UAE Air Force's Mirage 2000-9 under the name Shehab. The French arms procurement office bought nine Damocles pods in 2008 for its Mirage 2000D and Rafale F3 aircraft.
If the Emirates does buy the Rafale, no immediate orders are expected for missile maker MBDA, as the Gulf nation has a stock of Mica air-to-air missiles and Black Shaheen cruise missiles for its Mirage 2000-9 fleet, which would be compatible with the Rafale.
The Dassault static display at the Paris Air Show last year included a Rafale with three mock-up cruise missiles, demonstrating its long-range strike capabilities.
Later market prospects for MBDA would come with the AASM guided propelled bomb and the Meteor beyond-visual-range missile. The long-range weapon is due to enter service with the French Air Force around the middle of the decade.
The United Arab Emirates has ordered three Airbus A330 multirole tanker and transport aircraft, and is potentially interested in buying more. The Abu Dhabi government bought France's Leclerc tank in the early 1990s, becoming the only export customer.
France last year opened a naval base in Abu Dhabi as part of a shift of its military strength to the Gulf and away from Africa. The Gulf region is seen as strategically important because of the transit of petroleum tanker ships through its waters, the perceived threat from Iran and the sovereign wealth funds that are based in the Gulf states.

DTN News: Times Square Car Bomb Was Act Of Terrorism

Defense News: DTN News: Times Square Car Bomb Was Act Of Terrorism

Source: DTN News ~ Compiled By Roger Smith
(NSI News Source Info) NEW YORK, U.S. - May 2, 2010: The popular tourist spot in Manhattan has been cleared after a suspicious vehicle was found near a production of "The Lion King".
New York's Times Square evacuated over bomb threat ~ IN PICTURES


AP PHOTO 8 HOURS AGO

In this image taken from video, A police officer approaches the vehicle containing a car bomb, which stands with the door open and red canisters on the roadway at New York's Times Square, NY, U.S.A. , Sunday, May 2, 2010. Police cleared the streets around Times Square when the vehicle was seen to be smoking late Saturday evening, before recovering un-detonated bomb components including cans of gasoline, tanks of propane, fireworks and other electrical equipment from the sport utility vehicle.

REUTERS PICTURES 9 HOURS AGO

Members of the NYPD Bomb Squad in New York's Times Square May 1, 2010. Police evacuated Times Square on Saturday night after a dark-colored sports utility vehicle was found to be smoking and a small "flash" was observed by firefighters on the scene.

REUTERS PICTURES 9 HOURS AGO

Crime scene investigators examine a Nissan Pathfinder sport utility vehicle that was packed with bomb materials in New York's Times Square, May 1, 2010. Police tipped off by a street vendor found and defused a car bomb inside a sport utility vehicle, thwarting an "act of terrorism" that forced the evacuation of New York's Times Square on Saturday and could have killed many people, authorities said early on Sunday.

AP PHOTO 9 HOURS AGO

A police vehicle is seen in Times Square in New York, Sunday, May 2, 2010. Authorities say police have found an "amateurish" but potentially powerful bomb that apparently began to detonate but did not explode in a smoking sport utility vehicle in Times Square. Police Commissioner Raymond Kelly said Sunday that thousands of tourists were cleared from the streets for 10 hours after a T-shirt vendor alerted police to the suspicious vehicle, which contained three propane tanks, fireworks, two filled 5-gallon (20-liter) gasoline containers, and two clocks with batteries, electrical wire and other components.

GETTY IMAGES 5 HOURS AGO

NEW YORK - MAY 02: Police cruisers stand by at sunrise at the scene where a crude car bomb had been parked at 45th Street and 7th Avenue in Times Square May 2, 2010 in New York, New York. Police found a crude but potentially powerful bomb in vehicle in Times Square and disabled it, clearing out the famous intersection of thousands of tourists on a busy Saturday night.

GETTY IMAGES 5 HOURS AGO

NEW YORK - MAY 02: Police stand by at sunrise at the scene where a crude car bomb had been parked at 45th Street and 7th Avenue in Times Square May 2, 2010 in New York, New York. Police found a crude but potentially powerful bomb in vehicle in Times Square and disabled it, clearing out the famous intersection of thousands of tourists on a busy Saturday night.

DTN News: Pranav Mistry ~ The Thrilling Potential Of 'SixthSense' Technology

Defense News: DTN News: Pranav Mistry ~ The Thrilling Potential Of 'SixthSense' Technology

Source: DTN News / Courtesy Kuku Bunshah
(NSI News Source Info) TORONTO, Canada - May 2, 2010: At TEDIndia, Pranav Mistry demos several tools that help the physical world interact with the world of data -- including a deep look at his SixthSense device and a new, paradigm-shifting paper "laptop".
In an onstage Q&A, Mistry says he'll open-source the software behind SixthSense, to open its possibilities to all.
Pranav Mistry (b. 1981 in Palanpur, India) is the inventor of SixthSense. He is a research assistant and a PhD candidate at MIT Media Lab. SixthSense has recently attracted global attention.

Among some of his previous work, Pranav has made intelligent sticky notes that can be searched, located and can send reminders and messages; a pen that can draw in 3D; and a public map that can act as Google of physical world.

Pranav holds a Master in Media Arts and Sciences from MIT and Master of Design from IIT Bombay besides his Bachelor degree in Computer Engineering from Nirma Institute Of Technology, Ahmedabad.

Pranav’s research interests include Ubiquitous computing, Gestural and Tangible Interaction, AI, Augmented reality, Machine vision, Collective intelligence and Robotics.
Sixth Sense has been awarded 2009 Invention Award by Popular Science. Pranav also won Young Innovator Award TR35 by Technology Review. Mistry has been called "one of the two or three, best inventors in the world right now" by Chris Anderson.

Turbine Truck Engines and Beijing Royal Aerospace Facilities Co., Ltd. Sign Cooperative Agreement

Defense News: DELAND, FL--(Marketwire - 04/30/10) - Turbine Truck Engines, Inc. ("TTE") (OTC.BB:TTEG - News) -- Following a year of evaluating TTE's patented Detonation Cycle Gas Turbine (DCGT) engine, Aerospace Mechanical and Electrical Equipment Company Co., Ltd. (AMEC), a strategic ally of TTE, reached the conclusion that they believe the DCGT to be a viable solution to the economic and emissions problems facing the global trucking industry. At their recommendation and request, Turbine Truck Engines andBeijing Royal Aerospace Facilities Co., Ltd. (ROYAL) signed a Cooperative Agreement on April 27, 2010 in which ROYAL will coordinate further funding, design, testing, technical evaluation, and other matters regarding building engineered prototype units of the DCGT for the heavy duty trucking industry in China.

ROYAL will be the exclusive partner for this application in China and will apply for government funding through an Energy Saving and Lower Emission Project Grant awarded to innovative green technology companies throughout China. With these resources, AMEC and ROYAL would then work jointly to develop 300 to 600 horsepower versions of the DCGT to be used in heavy-duty trucks.

Mr. Sunny Qian, President of ROYAL, observed, "We all know that heavy-duty trucks are one of the major sources of carbon emissions and air pollution, and currently there are very few solutions out there. China has made promises to the world to be one of the leaders in lowering these carbon emissions. This technology is what the trucking industry needs to make a major stride in our contribution to combat energy shortages and greenhouse effects on our planet. We are happy and proud to be a partner with TTE in this project, and we are very optimistic that we can obtain Chinese government funding to develop the DCGT engine in China."

TTE's President and CEO, Michael Rouse, commented, "This is a historic event for our company. From the start, we believed that the DCGT was a technology that had the potential to significantly alter the heavy duty trucking industry. ROYAL's business scope includes assisting foreign companies in doing business in China, and our partnership with ROYAL will enable them to apply for funding from the Chinese government for this project. We are pleased to have a partner as capable as ROYAL to work with us. This agreement is the culmination of eighteen months of work, but it is just the beginning of what we believe will be the sequence of events that will impact the transportation and power generation sectors around the world."

About Beijing Royal Aerospace Facilities Co., Ltd.

Beijing Royal Aerospace Facilities Co., Ltd. (ROYAL) was founded in September 2003. ROYAL is granted as a "high-tech enterprise" by Beijing Science and Technology Committee. The Beijing Industrial and Commercial Administration Office has continuously rewarded ROYAL as a "Credible Corporation" for many years.

ROYAL is experienced in the service of international trade, experienced in the procedures of import and export, good at helping customers choose the best operation mode as well as providing customers with services in a foreign trade contract cycle from the contract signature up to delivery of the commodity to a customer's site and necessary services in the guarantee period. The main products of our import and export cover mechanical equipment, industrial robots, electrical generators, various valves, tools for machining, electronic devices and components, construction materials, computers, test systems, etc. ROYAL's business has expanded to cover high tech areas including aerospace industry, aircraft industry, shipping industry, information technology, power plants, and automobiles. ROYAL is flexible and capable to meet the needs of customers and business partners by working as an import and/or export agent for customers and partner for foreign manufacturers. ROYAL's business scope also covers offering consultation and assistance to foreign companies in sales, investment, and setting up projects in China.

ROYAL has always made every effort to offer good services, qualified products and professional foreign trade consultation. With a philosophy of good credibility, ROYAL's business keeps development stable and has business relationships with 30 countries and areas.

ROYAL sincerely expects full cooperation with more customers and more foreign companies in the principle of mutual benefit and development.

About Turbine Truck Engines, Inc.

Turbine Truck Engines, Inc. is a technology company focused on the development, manufacture and testing of its New Energy and Environmentally Efficient Truck Engine intended for mass market distribution in the United States and abroad. The new engine can utilize any known fuel source (gasoline, diesel, propane, natural gas, hydrogen, methanol, ethanol or LPG) or fuel mixture, yet needs little or no coolant, lube oil, filters, or pumps. Its unique, lightweight turbine design has few moving parts, significantly reducing maintenance costs. The innovative cyclic detonation process produces a complete combustion of fuel-oxidizer mixtures, resulting in greater fuel economy and fewer harmful exhaust emissions. For more information concerning Turbine Truck Engines, Inc., visit www.ttengines.com.

Safe Harbor: This release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The risks and uncertainties that may affect the operations, performance, development and results of the company's business include, but are not limited to, fluctuations in financial results, availability and customer acceptance of our products and services, the impact of competitive products, services, and pricing, general market trends and conditions, and other risks detailed in the company's SEC reports.

Contact:

 
Beijing Royal Aerospace Facilities Co., Ltd.
Building 26 Tsinghua Science Park, 
No. 3 Minzhuang Road
Haidian District Beijing 100097 
P.R.China
Tel：+86-10-96096677 
Fax：+86-10-88857829
Turbine Truck Engines, Inc.
DeLand, Florida
Nicole Trott
TEL: 386-943-8358
FAX: 386-943-6232
NTrott@ttengines.com 

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