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The federal government is moving ahead with the first auction of offshore petroleum leases in the Gulf of Mexico since the Deepwater Horizon disaster _ despite a lawsuit challenging the sale.

Interior Department spokeswoman Melissa Schwartz said bids will be opened as scheduled on Wednesday in New Orleans.

Four environmental groups are challenging a study used to clear the sale _ but aren’t seeking a federal court order to stop the auction. Instead, an attorney said a judge might decide later to throw out the results if he agrees with the suit.

The sale covers the western Gulf off the coast of Texas. Officials said the auction has attracted 241 bids from 20 companies on 191 tracts.

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Senate defeat of competing Democratic and Republican plans to extend a cut in the Social Security payroll tax has punted the issue to the House, where GOP leaders are facing ideological divisions within the party over whether to pass the tax holiday.

The focus is on the GOP-controlled House after Senate votes Thursday exposed wide reluctance by Republicans to go along with the costly proposal _ a centerpiece of President Barack Obama’s jobs agenda.

As expected, Senate Republicans defeated Obama’s plan to extend the payroll tax cut through the end of next year while also making it more generous for workers.

But in a vote that exposed rare divisions among Senate Republicans, more than two dozen of the GOP’s 47 lawmakers also voted to kill an alternative plan backed by their leader, Mitch McConnell, R-Ky., to renew an existing 2 percentage point payroll tax cut.

A spokesman for House Speaker John Boehner, R-Ohio, said Republicans weren’t planning on negotiating with Democrats before unveiling a payroll tax cut plan _ and the spending cuts to pay for it _ next week. But the Senate vote would seem to indicate that House Republicans will be hard-pressed to muscle a payroll tax cut through without Democratic support. And those votes could be hard to come by if the GOP plan contains spending cuts Democrats dislike.

Many Republicans and even some Democrats say the payroll tax cut hasn’t worked to boost jobs and is too costly with the deficit requiring the government to borrow 36 cents of every dollar it spends.

“I can’t find many people who even know that they’re getting it, OK?” said Sen. Joe Manchin, D-W.Va., who opposed both plans. “So with that being said, we’re going to double down on something that we thought should have worked that didn’t work.”

Sen. Jerry Moran, R-Kan., said after Thursday night’s vote that previous tax rebates “stimulated little and increased the debt a lot” and that it would be better to simply cut spending than turn around and use spending cuts on stimulus-style tax cuts.

The defeat of the competing Senate plans came as Boehner said for the first time that renewing the payroll tax cut would boost the lagging economy. Boehner also promised compromise on a renewal of long-term jobless benefits through the end of 2012.

The payroll tax cuts and unemployment benefits are at the center of a costly, politically-charged year-end agenda in which Democrats seem poised to prevail in renewing a tax cut that many Republicans back only reluctantly no faxing payday loans. But Republicans are insisting _ in a switch from last year _ that the payroll tax cut and jobless benefits be paid for by cutting spending.

Both parties are seeking the political high ground as next year’s elections loom, with Democrats accusing Republicans of siding with the rich, and Republicans countering that Democrats were taxing small business owners who create jobs.

The first payroll tax plan to fall was a Democratic measure that was at the heart of the jobs package Obama announced in September. It would cut the Social Security payroll tax from 6.2 percent to 3.1 percent next year and also extend the cut to employers, with its hefty $265 billion cost paid for by slapping a 3.25 percent surtax on income exceeding $1 million.

Republicans and a handful of Democrats combined to kill the measure on a 51-49 tally that fell well short of the 60 votes required under Senate rules. For the first time, a Republican, Susan Collins of Maine, voted to support the millionaires’ surcharge.

In a surprising result, Democrats and more than two dozen Republicans then voted 78-20 to kill the $120 billion GOP alternative that would have simply extended the existing 2 percentage point payroll tax cut, financed by freezing federal workers’ pay through 2015 and reducing the government bureaucracy.

Republicans offered a simple one-year continuation of the existing law, jettisoning Obama’s call to deepen the cut to 3.1 percentage point on workers’ first $106,800 in earnings, while expanding it to cut in half employers’ Social Security contributions for their $5 million in payroll.

To pay for the measure, Senate Republicans proposed freezing federal workers’ pay through 2015 _ extending a two-year-freeze recommended by Obama _ and reducing the bureaucracy by 200,000 jobs through attrition.

The Democratic plan would give a worker earning $50,000 a more than $1,500 tax cut; the GOP plan would provide a $1,000 tax cut for such an earner. A two-income family making $200,000 would reap a $6,000-plus tax cut under the Democratic plan and a $4,000 tax cut under the GOP version.

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Virgin America CEO David Cush believes flying doesn’t have to be painful. He remembers when boarding a plane was exciting and wants to bring back that joy.

That is why every job applicant, including pilots, flight attendants and baggage handlers, takes a personality test. He wants employees who are hard-wired with positive outlooks on life.

Virgin America, which is partly owned by Richard Branson, the founder of the edgy British airline Virgin Atlantic, doesn’t aim to be the biggest carrier. It only flies between big cities, such as Los Angeles, Chicago and Boston, serving about 5 million passengers annually _ a tiny fraction of the size of major airlines like Delta and United.

But Cush wants Virgin America to be recognized for superior quality _ and he appears to be succeeding. The airline, based near San Francisco, has routinely ranked at the top of customer surveys.

The past month has been a little rocky, though. Since the airline switched to a new reservation system on Oct. 28, customers have not been able to change or cancel flights online or select seats on Virgin America’s website. Instead, they’ve had to call the airline or wait until they got to the airport. Cush emailed a letter to the 56,000 passengers affected apologizing for the problem and the airline says it hopes to have it fully resolved by the first week in December.

Virgin America’s fleet is made up of brand-new Airbus A319s and A320s, fuel-efficient aircraft that seat 119 and 146. Each is equipped with TVs for every passenger, colorful mood lighting and Wi-Fi. Instead of flight attendants dictating meal times, passengers buy food when they want it by pressing a few buttons on their TV.

“If you talk to people about what is most frustrating about air travel, what comes out is the loss of control,” Cush says. “We’ve been pushing to give people control again.”

Virgin isn’t the first U.S. airline to use TVs and friendly service to attract customers. Cush acknowledges some copying as he works to create the California version of New York-based JetBlue.

“JetBlue came around and had a different type of service. That opened my eyes,” he says.

But his quest to create a fun airline has been stymied by more serious concerns like high fuel prices and a recession whose impact is still being felt.

Since it started flying in August 2007, Virgin America has lost $661.4 million. Cush expects to become profitable in 2012, a year later than originally planned.

The privately held company is owned by a New York hedge fund, Richard Branson’s Virgin Group and private investors, including Donald J. Carty, the former head of American Airlines’ parent company, AMR Corp.

Cush, 51, spent most of his career at American and left to head up Virgin America just four months after the airline started flying.

The Shreveport, La.-native is a graduate of Southern Methodist University _ yet a giant Louisiana State University football fan.

In his spare time, Cush likes to swim and fish. In college, he was a DJ, spinning Bruce Springsteen and Pink Floyd tunes.

Cush visited The Associated Press in New York. Below are excerpts, edited for clarity, of the interview where he spoke about the health of American, his favorite seat and why risk-taking is necessary to survive.

Q: How is Virgin America different?

A: The biggest difference is our in-flight entertainment system. It’s a nine-inch screen _ larger than JetBlue. We’ve got live TV, on-demand movies, about 3,000 MP3s. We have food and drink on-demand. We’re the only airline in the world that has it. You order from the seatback, swipe your credit card. They see seat 12C wants a turkey sandwich and a Heineken and bring it to you on a tray. Carts aren’t blocking the aisles.

Q: Who came up with that?

A: This was designed before my time but as I tell people, as time goes on and memories fade it will become my idea.

Q: How much more are people willing to pay for these services?

A: The model is getting them to pay the same amount with a much lower production cost.

Q: How can you attract business travelers when your miles can’t be redeemed for Hawaii, Europe or other places you don’t serve?

A: The mile problem will be solved early next year. We have basic agreements with Virgin Atlantic and Virgin Australia that will be fully reciprocal. We also have agreements with Cathay Pacific, Singapore and Emirates that will develop into frequent flier relationships.

Q: In Dallas, you’re telling fliers to “dump your older airline for a younger, hotter one.” American responded by slashing fares to San Francisco and Los Angeles. Can you survive this fare war?

A: We’ll survive. At current fares, it will not be a profitable route but it wouldn’t be such a loss-making one where we would consider any type of reduction. You have to be in Dallas-Fort Worth if you’re going to be a business airline.

Q: In one ad you refer to American as running a cattle car. If you feel that way, how could you have worked there for 22 years?

A: It wasn’t always that way. The industry, out of survival, did a lot of things. One of the reasons I left was because I didn’t think the industry had to operate that way.

Q: Why did you get into the business?

A: I don’t think anyone knows why they get in unless they are a pilot or an aviation enthusiast. I wanted to live in Dallas. American was a big employer. Young, single, the ability to fly around anywhere you wanted to, it all sounded pretty good. Once you get in, you find it so intellectually demanding that you can’t see yourself doing anything else.

Q: Do you think that American is on the right path?

A: It’s hard to tell. There’s a culture there that is perhaps a bit risk-averse. In the past, it was always an airline that was willing to accept risk. The industry’s consolidated around it and all of a sudden American finds itself in third place. I don’t know if they have the answer. I do know their top guys. They’re smart, capable but at some point you need to stick your neck out a little bit if you’re going to get out of a rut.

Q: Are you a risk-taker?

A: Absolutely. But I don’t take unnecessary risk and I always have an exit strategy.

Q: Mile for mile, airplanes burn more fuel than cars, trucks or trains. Do you think this poses a problem for the industry?

A: If we don’t find a way to clean up air travel, we’ll become a pariah. We’ll be what the coal companies used to be.

Q: You’re in 14 markets. Where would you like to fly to next?

A: We’ve been trying to get into Newark, (N.J.) since the day we started. This is a huge policy issue _ slots and gates are tied up by legacy carriers. The economics of keeping us out of Newark are huge for United so they’ll fly unprofitable (regional jets) just to occupy slots. When we go into markets, fares drop by 30 or 40 percent.

Q: When you fly your own airline you always pick the second row of coach. Why?

A: I get to watch the interaction between our in-flight teammates and the customers in first. It’s a nice seat, 4A.

Q: A window.

A: I’m a window guy. Our in-flight entertainment system has Google Maps. You zoom in when you see something on the ground you’re interested in.

Q: How would you describe yourself as a boss?

A: I’m probably a tough guy to work for. I’m pretty demanding and part of the reason is the airline business is a demanding business. We have very little margin for error in building this into a successful company. We have 2,500 people that rely on us for a paycheck.

Q: Do you ever get overshadowed by Richard Branson?

A: All the time. People want to talk to him, they want to see him. When he’s around, I’m just the hired help.

Q: How much patience do you have for unprofitable routes?

A: We stopped service to two different places. One because we needed the aircraft, that was Orange County, (Calif.). We didn’t see that as a big strategic need. The other is Toronto. We misjudged the market.

Q: Did you fire the guy who pushed that route?

A: That was me, so no.

Q: In ten years, do you see Virgin America being a full-blown national airline?

A: That’s not our goal. The biggest discipline we need to have is not outgrowing the model. That means maybe 100, 150 aircraft, probably no more. The goal would be to be consistently profitable, the highest quality airline where we can hopefully make a few hours of people’s day a little bit nicer.

Q: Will you go public?

A: As much as it’s nice being private _ because you don’t have to manage to the short term and there are a lot of burdensome regulations that come from being public _ ultimately we need to (do an initial public offering.) It’s a capital-intensive business. We need to tap public markets and our investors want to take some money off the table. It could be 2013 if the market is ready.

Q: How do you unwind after leaving the office?

A: I do a lot of yoga. It’s a nice way to separate the mind from what you’ve gone through all day.

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Concordia honored

Boeing is starting to fly right.

An Indonesian airline’s commitment to buy $21.7 billion worth of new planes is the latest good news for the company after a year when some things could have gone better.

Earlier this week, Emirates Airlines ordered $18 billion worth of 777s. Both deals come shortly after Boeing finally began delivering its two newest planes, the next-generation 787 and the latest version of the iconic 747.

Just a year ago, the outlook was dicier.

The new 787 was already running nearly three years late when an electrical fire on a test plane in November 2010 forced it to suspend flight tests. The revamped 747 was running late, too. And Airbus announced plans to put a new engine on its A320, making the plane more fuel efficient and a more potent competitor to Boeing’s 737.

The Airbus move forced Boeing to switch gears and offer a new-engine version of its 737 rather than build an all-new plane as it had originally expected to do.

Boeing needed some successes, and it found them in Asia and the Middle East, where rising wealth is turning more people into travelers.

Boeing expects demand for 11,450 planes in the Asia-Pacific region over the next 20 years, more than in any other part of the world. That number includes planes made by Boeing and competitors such as Airbus and new entrants into the market. Airbus has already booked 1,268 firm orders for its A320neo, so named for its “new engine option.”

The commitment by Indonesia’s Lion Air announced on Thursday is for 230 Boeing 737s. Lion Air also has options for 150 more planes, valued at $14 billion, bringing the deal’s total potential value to $35 billion.

The order would be Boeing’s largest ever in terms of both volume and dollars.

“This order is a big deal,” RBC Capital Markets analyst Robert Stallard wrote in a research note to clients. The deal “gives a meaningful boost to Boeing’s backlog.”

Most of the planes are the 737 Max, a new version of Boeing’s most popular plane with more fuel-efficient engines. It won’t be delivered to its first customer until 2017. Boeing has said it has about 600 commitments for the 737 Max.

But the Lion Air deal is not a certainty. The airline still has to finalize the order, and it’s struggling no teletrek payday advance. The Jakarta Post reported in August that Lion Air was ordered to ground 13 planes so it would have more in reserve because it had too many late flights.

“There’s always a risk that a deal’s going to fall through,” Citi analyst Jason Gursky said. “It’s a brutal industry, and when we go through periods of slower economic growth, there will be failures. It’s Boeing’s job to pick the winners and losers. But I think they’re pretty agnostic right now as to who they sell to.”

Gursky said Boeing went on “order holiday” in 2011 because it didn’t have a product to sell. That has changed now that it decided to put a new engine on the 737. He expects Boeing’s deliveries to increase by 27 percent next year, compared with a 9 percent increase at Airbus.

“That’s why we think this year is going to be the year of Boeing,” he said.

Even before Lion Air announced its plans, Boeing has been ramping up production to try to meet demand for the 737 as well as the 777, a larger plane used mostly on international routes. It already has a backlog of 2,191 737s that have been ordered by airlines around the world but not yet built.

Boeing already completes about one 737 every day in Renton, Wash. It is raising that to 42 per month in 2014. It has not yet said whether the 737 Max will be assembled in Renton or somewhere else, perhaps in South Carolina, where it is opening a second assembly line for its new 787.

Boeing already employs some 80,000 people in Washington state. Gursky, the analyst, has written that the biggest risk to Boeing’s planned rate increases appears to be its ability to hire the thousands of new workers it will need.

Lion Air already has orders for 125 more Boeing 737-900ERs. Its fleet currently stands at 73 planes, according to Airfleets.net. Sixty-five of those are Boeing 737s.

Also Thursday, Boeing said that aircraft leasing company Aviation Capital Group had ordered 20 of its 737-800s and committed to buy 35 of the planned 737 Max.

Shares of Chicago-based Boeing fell 25 cents Thursday to close at $66.09.

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Bank of America is selling most of its remaining shares in China Construction Bank, expecting an after-tax gain of about $1.8 billion.

It said Monday that about 10.4 billion shares will be sold through private transactions with a group of investors. Bank of America will hold about 1 percent of the Chinese company’s common shares after the transactions close.

Bank of America Corp., based in Charlotte, N.C., had owned about 10 percent of China Construction before it announced plans in late August to begin cutting its stake.

It’s the latest initiative by Bank of America to increase its capital base to comply with new international regulations governing large banks. The bank has taken several steps recently to sell non-core assets and businesses.

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India’s privately owned Kingfisher Airlines was forced to cancel dozens of flights Friday amid a burgeoning crisis at the country’s second-largest carrier.

Kingfisher, which is partly owned by brewery tycoon Vijay Mallya, has canceled more than 120 flights this week as pilots and crew called in sick after their October salaries were delayed.

The airline says flights were canceled because it was reconfiguring planes, the Press Trust of India reported. The Economic Times reported that leasing companies want Kingfisher to return their planes after the company fell behind on payments.

Kingfisher shares slid more than 12 percent on the Mumbai stock market Friday.

India’s airline industry has been hit by rising fuel costs and a crushing price war. Kingfisher is currently struggling under debt of $1.4 billion and shut down its budget carrier in September after it ran up losses payday loan lenders.

The airline, which began operations in 2005, bought India’s first budget airline Deccan Airways in 2008, leading to the creation of its budget wing, Kingfisher Red.

Kingfisher’s problems have worsened after three oil companies stopped giving it jet fuel on credit and asked the airline to make daily payments.

The airline has grounded eight of its leased turboprop ATR aircraft, and returned 14 leased A320 jets, leaving it with fewer aircraft in its fleet.

The cash-strapped airline has also piled up unpaid fees to airport operators and other agencies who are now adding to its financial pressures.

Kingfisher has said it is restructuring its operations.

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Greece’s incoming prime minister is due to name his cabinet Friday, a day after being appointed to head an interim coalition government that will push through a new European debt deal and secure continued bailout funding to prevent a catastrophic default.

Former European Central Bank vice president Lucas Papademos held talks with the country’s main political parties late into Thursday night to determine who would staff his cabinet, ahead of the formal swearing in early Friday afternoon.

Papademos’ appointment capped two weeks of a political crisis that threatened to derail an EU plan to get a grip on the Greek debt crisis and raised questions about the country’s continued presence in the eurozone.

He was named to take over from outgoing prime Minister George Papandreou, who agreed to step aside half way through his four-year term.

Although the composition of the new cabinet had not been announced by midmorning, many key ministerial positions were expected to remain unchanged, with Finance Minister Evangelos Venizelos widely expected to retain his post.

Venizelos was deeply involved in negotiating the latest debt deal _ a package agreed as recently as Oct. 27. The euro130 billion ($177 billion) debt deal took months to work out, and includes provisions for private bondholders to forgive 50 percent _ or some euro100 billion _ of their Greek debt holdings.

The latest political turmoil was sparked by Papandreou’s Oct. 31 surprise announcement that he would put the deal to a referendum. His plan infuriated European leaders, rocked global markets and led many of his own Socialist party lawmakers to rebel and call for his resignation.

Papandreou withdrew the public vote plan after the main conservative opposition said they backed the deal, and agreed to step aside.

After days of intense power-sharing talks, Papandreou’s Socialists and the conservatives, led by Antonis Samaras, along with a smaller right-wing party, appointed Papademos as interim premier.

Papademos’ government will be called on to pass the debt deal and secure the next euro8 billion installment of the country’s initial euro110 billion bailout. Without the funds, Greece will default in a matter of weeks.

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The world’s largest brewer Anheuser-Busch InBev NV said Wednesday its third-quarter profits rose by over 16 percent, largely on the back of the continued popularity of global brands like Stella Artois and Beck’s.

Despite a slight overall decrease in overall volume, the Leuven, Belgium-based company reported that its normalized profit attributable to equity holders grew 16.3 percent to $1.73 billion in the quarter compared with last year’s equivalent of $1.49 billion.

It says its revenue grew by 3.6 percent in the third quarter even though volumes decreased by 0.2 percent.

In the United States, it said that the share of Budweiser continued to decline although at a slower pace than previously. However its focus brands Bud Light, Michelob Ultra and Stella continued to grow. Overall in the U.S., the company said volumes continued to be “impacted by weak consumer confidence” and were slightly down.

A-B InBev held out hope that Bud Light would continue to grow, especially in the light of a new contract with the National Football League and the marketing opportunities American football entails.

“There are indications that the brand is starting to benefit from the new NFL sponsorship,” the company said.

Globally, Budweiser last month also extended its sponsorship of the World Cup through the 2018 edition in Russia and the 2022 event in Qatar.

That soccer contract should also pay off in Brazil over the coming years as the nation hosts the 2014 World Cup. And it will be further boosted by the activity and excitement that the 2016 Olympics in Rio will create.

The company also did well in China where Budweiser, Harbin and the regional brand Sedrin have had a combined growth of 13.6 percent in the third quarter. Overall, A-B InBev beer volumes grew by 4.7 percent in China over the third quarter.

 

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