src='/AM/Images/headlines/headline.gif' />
January 3, 2005
U.S. Economy Expected to Perform Well in 2005
The U.S. economy will perform well in 2005, according to a survey of
economists’ predictions, with modest but healthy growth, subdued
inflation and only slight rises in interest rates, the Wall Street
Journal reported. But many of the forecasters surveyed worry
about the low household-saving rate and wide budget and trade deficits.
While a few of the economists believe these problems could create
trouble in 2005, the majority sees these as long-term problems that
won’t derail the expansion anytime soon, the newspaper
reported.
Delta Air to Cut Fares
Delta Air Lines is planning to expand nationwide a simplified fare
plan that led to cheaper tickets and increasing passenger traffic at one
of its major hubs, the Wall Street Journal reported. The
airline is trying to reinvigorate customer service as a major part of a
turnaround plan aimed at reversing $6 billion in losses over the past
three years. As part of that effort, Delta hopes to implement the new
pricing structure later this month, the newswire reported.
Parent of Aloha Airlines Files for Bankruptcy-Court Protection
Aloha Airgroup Inc. filed for protection from creditors, the
Wall Street Journal reported. The action by the parent of
Aloha Airlines brings to five the number of U.S. airlines currently in
bankruptcy court, and follows the chapter 11 filing in 2003 of Hawaiian
Airlines, the other major carrier in the islands. Two other Aloha
competitors, UAL Corp.’s United Airlines and ATA Holdings
Corp.’s ATA Airlines, also are under bankruptcy protection, the
newspaper reported.
Agency Seeks UAL Pension Takeover
The nation’s federal pension insurer said it will ask a court
to allow it to immediately take over UAL Corp.’s underfunded pilot
pension plan, the third-largest claim in the agency’s history, in
an attempt to reduce the agency’s potential liability, the online
Wall Street Journal reported. If UAL cuts its pilot pension
plan, which covers 14,000 active and retired pilots, it would give the
carrier a boost in its efforts to reduce labor and benefits costs and
emerge from bankruptcy-court protection as a viable carrier. But the
action by the quasigovernmental Pension Benefit Guaranty Corp. also
could complicate a tentative contract agreement between UAL and its
pilots union, one part of which would allow the plan to be terminated,
the online newspaper reported.
Separately, Reuters reported that flight attendants at UAL Corp ,
parent of bankrupt United Airlines, authorized their union to call for
strike activities if the carrier terminates their collective bargaining
agreements, the union said on Thursday.
LG Group, Creditors Agree $960 Million LG Card Bailout
Creditors of LG Card and its former parent, LG Group, agreed on
Friday a $960 million lifeline for South Korea’s biggest credit
card company, Reuters reported. LG Group, the country’s
second-largest conglomerate, and the creditors that own LG Card Co. Ltd.
had agreed to provide 500 billion won ($480 million) each following a
meeting overnight, said Yoo Ji-chang, governor of leading creditor Korea
Development Bank. The two sides had been disputing how to share the cost
of a bailout amid a threat by creditors to liquidate the firm, the
newswire reported.
Trump Hotels Shareholders Form Bankruptcy Panel
A committee of shareholders in Trump Hotels & Casino Resorts Inc.
will weigh in on the company’s plans for emerging from bankruptcy,
according to a U.S. Trustee filing on Thursday, Reuters reported. A
hearing will be held in New Jersey bankruptcy court on Tuesday to review
an interim approval of the casino operator’s $100 million
reorganization financing. The judge earlier this month cleared the
financing package, but held off on final approval pending comment from
shareholders.
US Airways Expects to File Reorganization Plan by Feb. 15
US Airways Group Inc. said on Thursday it expects to file a plan by
Feb. 15 on how it will emerge from bankruptcy, Reuters reported. The
airline also asked the U.S. Bankruptcy Court for the Eastern District of
Virginia to extend until March 31 the period in which it is the only
party that can file a reorganization plan. The current deadline is Jan.
10. However, US Airways said it expects to file by the February date as
required under its financing agreement with General Electric Capital
Corp., the newswire reported.