Tuesday AM April 8th, 2008
by: Ed Mayberry, April 8, 2008 12:04:00 pm
Continental Airlines and the city of Houston have announced a $1.2 billion overhaul of Terminal B at George Bush Intercontinental Airport. The seven- to ten-year project will expand the terminal from 360,000 to 1.7 million square feet, making it larger than Minute Maid Park. It includes 20 to 25 additional gates and a second Federal Inspection Services facility for U.S. Customs. Terminal B's north and south ramps and parking garage will be replaced, and a moving sidewalk will be expanded to connect to Terminal A. A new north concourse will connect to the northwest concourse of Terminal C. In 2004, Continental opened the $300 million Terminal E, followed by a new federal inspection facility. Terminal C was also recently improved. The Houston Airport System ranks as the national's fourth-largest.
American Airlines has imposed a freeze on hiring management and support staffers as the nation's largest air carrier copes with high fuel costs and the slowing economy. An American spokesman says the airline will honor job offers issued before April but is postponing additional hiring indefinitely. American's hiring freeze is the latest sign of trouble in the airline industry. Skybus, ATA and Aloha Airlines have stopped flying in the past week and are filing for bankruptcy protection. American, Southwest and Delta Airlines have all had to cancel flights recently to address safety concerns about some of their aircraft. Airlines are being hit hard by high fuel prices. American said last month that it expects to spend $9.3 billion on fuel this year, up 39 percent from last year. The Fort Worth-based airline expects to pay $2.98 per gallon, up from $2.13 last year. Since narrowly avoiding bankruptcy in 2003, American has slashed costs including. Fuel now accounts for about one third of the airline's expenses--triple the percentage from 1999.
Consumers, battered by a credit crunch and prolonged housing slump, significantly slowed their pace of borrowing in February. The Federal Reserve reported that consumer borrowing rose at an annual rate of 2.4 percent in February--just half of the 4.9 percent increase in January. The slowdown reflected much weaker demand for auto loans and other types of non-revolving credit, which rose at a rate of 0.4 percent in February, much lower than the 3.6 percent growth rate in Fanuary. Credit card debt rose at a 5.9 percent rate.
Despite surging oil prices, the head of a major oilfield contractor says development is hampered by insufficient investment. The comments came from Andrew Gould, the CEO of Houston-based Schlumberger. That's as the industry deals with nationalized oil companies, grapples with shortages of qualified workers and higher costs. Gould says that as a result, building adequate supplies of petroleum in the face of increasing worldwide demand "is going to be a slower process than originally anticipated.'' He was speaking at the Howard Weal Energy Conference in New Orleans. Gould says less than 25 percent of the worldwide reserves are accessible to private international capital while taxes are going up. Another chief executive officer, Clarence Cazalot of Houston-based Marathon Oil, said that the nationalistic tendencies of the national oil companies are becoming stronger. Gould said that much of the current increased investment level is merely covering sharply higher costs for materials and personnel.
Houston based Eagle Domestic Drilling Operations has reached a settlement in a breach of contract suit, according to the Houston Business Journal. The subsidiary of Blast Energy Services settled against Dallas-based Hallwood Energy in a agreement worth about $6.4 million.
The U.S. Department of Labor's Occupational Safety and Health Administration has renewed a partnership with the Houston chapter of the Associated General Contractors of America and the AGC Texas Building branch. Nearly 50 CEOs and other executives and safety professionals representing 13 construction companies joined with OSHA, the AGC Houston chapter and the AGC Texas Building branch to renew their commitment for the next five years to promoting construction safety.
Yahoo! believes it's poised to revolutionize online advertising after years of being outmaneuvered by rival Google. But it might not get the chance to show off the latest improvements to its online advertising platform, unless it can convince impatient investors that the new approach will produce a bigger payoff than Microsoft's unsolicited buyout offer. Yahoo! is releasing more details about its effort to become a one-stop shop for selling and distributing online display ads. The upgrade, called "Amp,'' won't be available until sometime this summer, and then only on a limited basis. But Yahoo! has begun promoting Amp with an online video demonstration. Yahoo! says the system will make it easier for advertisers to aim their messages at specific demographic groups across scores of Web sites. The new platform will be competing against similar technology recently acquired by Google and Microsoft.
Yahoo! says it's not opposed to a deal with Microsoft, it just wants a better one. Microsoft warned over the weekend that if Yahoo! doesn't accept the $41 billion buyout by April 26th, it will launch a hostile takeover at a less attractive price. Yahoo! Chief Executive Jerry Yang and Chairman Roy Bostock say in a letter to Microsoft CEO Steve Ballmer that they are "open to all alternatives that maximize stockholder value.'' It goes on to say they're willing to accept a deal "if it represents a price that fully recognizes the value of Yahoo! on a standalone basis.'' The Yahoo! executives also say Microsoft's threat to begin a hostile takeover is "counterproductive."
CityPass, the discount attraction booklet, is launching May 13th in Houston. It will be the first CityPass in Texas and the only CityPass in the southwest. The Houston CityPass costs $34 for adults and $24 for ages 4-11. It includes tickets to the Houston Museum of Natural Science, the Space Center on the grounds of NASA, the Downtown Aquarium, and the Houston Zoo. In addition, the booklet comes with several options: admission to either the Health Museum or the George Ranch Historical Park, a living history center on a working ranch; and a visit to either the Museum of Fine Arts or the Children's Museum of Houston. The price of the booklet typically works out to about half that of individually purchased tickets, and it also includes transportation directions, a map, hours and information compiled by National Geographic Traveler magazine about dining, shopping, neighborhoods and nightlife. Most attractions allow CityPass holders to avoid waiting in line for tickets once they get there. Ticket booklets are valid for nine days from the first day of use. You can buy the Houston CityPass online, at any of the participating attractions or from the Greater Houston Visitor Center at City Hall on Bagby, at 800-446-8786. CityPass offers similar ticket booklets for attractions in New York, Atlanta, Boston, Philadelphia, Toronto, Chicago, Seattle, San Francisco, Hollywood or southern California. Some of these passes have added attractions this year, including for the Seattle CityPass, the Experience Music Project and the Science Fiction Museum; for the Philadelphia CityPpass, the Eastern State Penitentiary, a historic site; for the New York CityPpass, an option to do either the Statue of Liberty and Ellis Island Museum or the Circle Line Cruise around Manhattan; and in Chicago, an option for either the Hancock Observatory or the Sears Tower. CityPass also offers discounts for certain transportation extras, like savings on a guided bicycle ride over the Golden Gate Bridge in San Francisco, a trolley tour in Boston, or a double decker bus in New York City.
Houston-based CyrusOne will have the highest-density, high-security data center in Dallas when it opens its new office in May, according to the Houston Business Journal. The corporate co-location services provider will supply more than 250 watts per square foot to support server technology for clients, with up to 13.5 megawatts of power.
The west Texas oil refinery closed by an explosion in February has partially reopened. Alon USA Energy said Monday that the Big Spring refinery is producing gasoline, diesel and asphalt. The company says it's ahead of schedule in repairing and restarting part of the refinery, and it's aiming to have another key unit back running by mid-July. The refinery is located 290 miles west of Dallas. It employs about 170 people and is one of four refineries operated by Alon. Five people were hurt when an explosion rocked the refinery in February. The injury count might have been reduced because a smaller crew was working over the President's Day holiday, when the blast occurred.
Transocean has secured a five-year, $900 million contract from India-based Reliance Industries, according to the Houston Business Journal. Transocean expects to begin the contract in early 2010 after shipyard construction and mobilization to India.
Swiss pharmaceutical maker Novartis said it's buying a quarter share of the eye-care company Alcon. Novartis also took an option on another 52 percent interest in the Fort Worth-based company in a deal potentially worth $39 billion. If it receives the required regulatory approval, the Alcon deal would be one of the biggest in Swiss history. Novartis will initially pay Swiss food and beverages giant Nestle $11 billion for the 25 percent stake in the maker of lenses and solutions. In a second step, Novartis has the exclusive right to buy Nestle's remaining 52 percent stake for about $28 billion between January 2010 and July 2011. While the second step is optional, both companies would have to agree not to exercise their rights for it to fall through. Analysts praised the sale as a significant success for Nestle, which snapped up Alcon in 1978 for $275 million.
In addition to delivering your mail, the U.S. Postal Service will now help you recycle small electronics--for free. Under a test program at about 1,500 post offices, you can pick up a postage-free envelope to send in old cell phones, PDAs, mp3 players, inkjet cartridges and other small electronic items. Clover Technologies Group will pay the postage and then remanufacture and remarket the items. If the devices can't be refurbished and resold, the component parts are reused in other items, or are broken down further and recycled. The tests are under way in several cities in California, as well as in Chicago, Baltimore and Washington, D.C.
Halliburton's chief executive got $14.9 million in compensation last year. That's nearly ten percent less than David Lesar received in 2006 because of smaller stock and option awards. The Houston-based oilfield services company revealed Lesar's compensation in a regulatory filing. Lesar's total compensation dipped even though the company's stock and profits rose as it cut ties with former engineering and defense contractor KBR. Lesar became Halliburton's chairman and CEO when Vice President Dick Cheney left the company in 2000. Lesar now works in Dubai. His compensation consisted of a $1.3 million salary and a performance-related bonus of $7.4 million. The bonus was up from $6.6 million the year before. Lesar also got nearly $1 million in other compensation, including almost $305,000 in restricted stock dividends and $245,000 from a supplemental retirement plan for executives. He also got $67,294 in above-market returns on deferred income and pension benefits. Lesar got stock and option awards that the company valued at $5.1 million when they were issued in December. The company had valued similar awards in 2006 at $7.5 million.