Continental cutting back

Posted: Thursday, August 22, 2002

HOUSTON (AP) -- Continental Airlines announced Tuesday that it is cutting capacity, grounding airplanes and charging for certain services to low-fare customers in order to combat an industry downturn that persists nearly a year after the Sept. 11 attacks.

The Houston-based airline, the nation's fifth largest, said that by August 2003 it will provide 17 percent fewer seats compared to August 2001 levels. It also will ground 11 airplanes in its fleet to save $350 million on an annual basis and $80 million for the rest of 2002.

Capacity will be reduced by 4 percent over the next year, spokesman Rashaan Johnson said.

The move comes after Continental's larger rivals have cut jobs, capacity or both in response to fewer people flying than before Sept. 11.

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ATLANTA (AP) -- The Home Depot Inc. topped $1 billion in quarterly profits, kept its chief competitor in check and quieted restless investors with the release of its second-quarter earnings report Tuesday.

The Atlanta-based company, the nation's largest home improvement retailer, joined Wal-Mart in an elite club of only two retailers to ever achieve more than $1 billion in earnings.

Home Depot reported a 28 percent increase in second-quarter profits, earning $1.18 billion, or 50 cents per share, in the three months ended Aug. 4. In the same quarter last year, Home Depot earned $924 million, or 39 cents a share.

Analysts surveyed by Thomson First Call expected earnings of 47 cents per share.

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HOUSTON (AP) -- Swiss investment bank UBS Warburg is cutting 130 jobs, or 25 percent of the work force, at its Houston-based energy trading arm, acquired from bankrupt Enron Corp. in January.

UBS Warburg Energy said the cuts were necessary to shave costs in response to lower trading volumes in the aftermath of Enron's collapse last year.

The company will continue trading energy, albeit with a smaller operation, UBS spokesman David Walker said.

UBS Warburg Energy recently consolidated its energy trading operations in Portland into Houston, but its Canadian operations will be unaffected. Most of the jobs being cut are in technology and operations, not at the senior level.

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NEW YORK (AP) -- Cendant Corp., owner of hotel brands like Days Inn, Ramada and Howard Johnson, said Tuesday that it will eliminate 300 hotels, or 7 percent of its franchise hotel business, by the end of the year. The company also announced several changes in leadership at its various hotel brands.

The hotel cuts are aimed at purging substandard hotels as well as franchisees that have defaulted on fee payments.

Cendant, the world's largest lodging franchisor, owns the hotel brands but doesn't own or operate any hotel properties. It receives franchise fees from hotel operators for the use of the brand names. Cendant's business also includes travel services and franchise real estate brokerages, including Century 21.

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ATLANTA (AP) -- Cingular Wireless said Tuesday it will cut 2,500 to 3,000 jobs -- about 8 percent of its full-time work force -- in a reorganization that will start within its sales department.

Cingular, an Atlanta-based venture owned jointly by SBC Communications and BellSouth, said the cuts would be made throughout the United States and Puerto Rico.

The country's second-largest wireless carrier has about 36,000 full-time employees.

The company also will reduce jobs in marketing, network, finance and human resources.

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WASHINGTON (AP) -- Federal regulators on Tuesday settled price-fixing charges against doctors groups in Texas and Colorado, part of an increased effort to combat health care practices that drive up costs for patients.

The Texas settlement involves System Health Providers and its parent company, Genesis Physicians Group Inc., which represent about 1,300 doctors in the Dallas-Fort Worth area. The other case concerns eight Denver doctors groups specializing in obstetrics and gynecology.

The FTC accused the groups of violating antitrust law by collectively bargaining to set fees and contract terms with insurance companies, limiting competition and causing prices to rise for health plans, employers and patients.

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By The Associated Press

The Dow closed down 118.72, or 1.3 percent, at 8,872.07, following a 213-point, or 2.4 percent, advance Monday.

The broader market was also lower. The Nasdaq composite index fell 17.95, or 1.3 percent, to 1,376.59, having risen 2.5 percent in the previous session. The Standard & Poor's 500 index declined 13.27, or 1.4 percent, to 937.43, following a gain of 2.4 percent.

The nearby September crude futures contract rose to a high of $30.32 a barrel on the New York Mercantile Exchange before closing at $30.11, up 27 cents. The October crude contract, which become the front-month Wednesday, ended 3 cents down at $28.77 a barrel. Nearby September gasoline futures gained 94 points to 80.03 cents a gallon while September heating oil futures rose 41 points to 73.80 cents a gallon.

September natural gas futures were down 10.1 cents to close at $3.166 per 1,000 cubic feet.

On London's International Petroleum Exchange, September North Sea Brent crude futures fell 16 cents to $27.10 a barrel.



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