Finite difference approximation of transonic flow problems is a welldeveloped and largely· successful approach.Nevertheless, there is still a real need to develop finite element methods for applications arising from fluid-structure interactions and problems with complicated boundaries. In this paper we introduce a least squares based finite element scheme. It is shown that, if suitably formulated, such an approach can lead to physically meaningful results. Bottlenecks that arise from such schemes are also discussed.
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