Thursday PM November 1st, 2007
by: Ed Mayberry, November 1, 2007 5:11:00 am
American Airlines has raised U.S. round-trip fares by $20. That's the biggest in a series of hikes airlines have pushed through in recent weeks as oil prices surged. Fort Worth-based American is the nation's biggest carrier. It says it's raised ticket prices on flights within the continental United States by $10 one-way. It says it's an effort to recover some of the costs associated with the rising price of crude oil and jet fuel. Delta Air Lines followed with its own increases, with a spokeswoman saying that most routes in the lower 48 states will be affected. Other carriers, such as United Airlines, said they are studying the move but have not yet decided whether to raise fares. Rick Seaney is chief executive of the airline pricing web site farecompare.com. He says the increase is the industry's seventh since Labor Day and the largest of those in dollar terms. Recent fare increases, such as one launched by Houston-based Continental Airlines last week, have raised most ticket prices by only half as much. Major carriers typically follow their competitors in raising prices within a matter of days, if not hours.
A march and rally are set for an hour from now at City Hall, as Houston city employees seek a contract that would guarantee at least $10 an hour for every city worker. The Houston Organization of Public Employees, which represents the city's 13,000 public service workers, is in its seventh month of negotiations. HOPE is a joint local of the Service Employees International Union and the American Federation of State, County and Municipal Employees.
Waste Management and the Teamsters have agreed on a five-year contract, ending a 12-day strike by 470 Los Angeles-area workers, according to the Houston Chronicle.
Chrysler is gearing up for job cuts. The automaker says it plans to trim up to 12,000 jobs, or 15 percent of its workforce, in an effort to save money and match output to slowing demand for some of its vehicles. The automaker says it will cut to up 10,000 hourly jobs through 2008 and will also reduce salaried employment by about 2,100. Shifts will be eliminated at five North American assembly plants as Chrysler eliminates four vehicles from its line-up. The cuts come in addition to the 13,000 layoffs the automaker announced in February as part of a massive restructuring plan.
The contract covering Hollywood movie and TV writers has run out and no new talks with producers are scheduled. Members of the writers guild are to meet tonight at the Los Angeles Convention Center to plan their next move. They've already authorized a strike but for now, the union has not called a walkout. Talks deadlocked over the writers' demand for more money for DVD and Internet sales. Producers say they won't agree to anything that would restrict their ability to experiment with new digital options for distributing shows. Entertainment lawyer Jonathan Handel says it's in the union's interest to delay a walkout for at least a few days. He says the writers have two weapons: a strike and the threat of a strike. And he says he says there's no reason to toss one away without using it. For the most part, a writers strike would not be immediately noticed. Filmmakers have dozens of scripts in the pipeline. Most TV shows have enough scripts or completed shows in hand to last until early next year. But a shortage of jokes could quickly force late night comedy shows into reruns.
The Texas First Court of Appeals has overturned a Galveston judge's order preventing jurors who served in the BP Texas City refinery explosion civil trial from discussing the case publicly until litigation is resolved. The appeals court ruled that District Judge Susan Criss' September gag order is unconstitutional. The Houston Chronicle and Galveston Daily News had appealed Criss' order. The trial involving four plaintiffs ended in mid-September when a settlement was announced.
ExxonMobil's third-quarter profit fell ten percent as it suffered lower refining and chemical margins. The Irving-based oil giant's quarterly net income of $9.41 billion fell short of the expectations of Wall Street analysts. Its profit in the third quarter of 2006 was the second-largest ever recorded by a publicly traded U.S. company. Revenue rose three percent to $102.3 billion. Analysts surveyed by Thomson Financial had expected revenue of 112.97 billion.
KBR credits Iraq-related work, in part, for a nine-fold increase in its third-quarter profit. The Houston-based military, construction and engineering contractor also credits a gain on the sale of interest in an Algerian joint venture and comparison with year-ago results hurt by a hefty charge. Earnings for the former Halliburton subsidiary jumped to $63 million. That includes an $18 million gain from the sale of a stake in the Algerian joint venture. Income from continuing operations rose to $60 million. Year-ago results included a $32 million impairment charge related to an equity investment in the Alice Springs-Darwin railroad project in Australia. Quarterly revenue fell two percent to $2.18 billion, but that still beat the analysts' projection of $2.16 billion.
Even as the Federal Reserve delivered a hoped-for quarter-point rate cut Wednesday, it sent a message to Wall Street: that may be it for a while. In explaining the rationale, the Fed said "the pace of economic expansion will likely slow in the near term, partly reflecting the intensification of the housing correction.'' Commercial banks responded, including Bank of America, Wells Fargo and KeyCorp. By announcing that they are cutting their prime lending rate, for certain credit cards, home equity lines of credit and other loans, by a corresponding amount. The Fed says the risks to the economy from inflation "roughly balance,'' or are equal to, the risks of a serious downturn in economic growth. Previously, the risks of a recession were seen as more of a threat to the country's economic health. Analysts say the central bank will monitor developments down the road, but another rate cut is not guaranteed. The final scheduled meeting of the year is December 11th.