Business Briefs: Tuesday, August 19, 2008
Business Briefs: Tuesday, August 19, 2008

WASHINGTON — An airline trade group expects Labor Day travel to drop by 5.7 percent this year, as rising airfares and schedule cuts keep travelers home.

The Air Transport Association of America projected on Monday that 16 million paying passengers will fly globally on U.S. airlines between Aug. 27 and Sept. 3. That would be down 5.7 percent from the 17 million passengers during the same period last year.

The projection includes a 6.5 percent drop in domestic travel and a 1 percent increase in international travel.

The ATA said jet fuel prices averaged $160.47 per barrel from June 1 to Aug. 12 — up 79 percent from the same period last year.

In addition to higher airfares and tighter schedules, the ATA said travel is being discouraged by higher energy prices, which have left consumers with less money to spend.

NEW YORK — Delphi says its electronics and safety division will lay off about 600 of its 3,200 U.S. salaried workers as part of a cost-cutting plan.

The Troy, Mich.-based company blamed lower orders for electronic components stemming from drops in consumer demand for new vehicles and a shift toward smaller cars.

Milton Beach, a spokesman for the auto supplier, said the job cuts are part of a plan to cut the division's total costs by 25 percent.

The bulk of the jobs are business and engineering related and based in Kokomo, Ind., Beach said.

Delphi has been operating under Chapter 11 bankruptcy protection since October 2005.

WASHINGTON — Interest rates on short-term Treasury bills fell in Monday's auction to the lowest levels in two weeks.

The Treasury Department auctioned $28 billion in three-month bills at a discount rate of 1.85 percent, down from 1.87 percent last week. Another $27 billion in six-month bills was auctioned at a discount rate of 1.98 percent, down from 2.02 percent last week.

The three-month rate was the lowest since those bills averaged 1.71 percent Aug. 4. The six-month rate was the lowest since those bills averaged 1.92 percent also Aug. 4.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,953.24, while a six-month bill sold for $9,899.90. That would equal an annualized rate of 1.885 percent for the three-month bills, and 2.028 percent for the six-month bills.

DENVER — Qwest Communications International Inc. and negotiators for its largest union have tentatively agreed on a contract about a day after the previous one expired.

Denver-based Qwest came to terms on a three-year deal with the Communications Workers of America, which represents about 20,000 of its employees in 13 states.

Qwest also agreed with the International Brotherhood of Electrical Workers, which represents the employees in Montana.

Details of the two contracts were not released, but CWA organizing coordinator Al Kogler said they include pay and pension increases and higher costs for health care.

NEW ORLEANS — Power provider Entergy Corp. is advancing its plans to spin off nuclear plants that generate free-market electricity, a deal that may be a boon for shareholders but a potential burden for taxpayers, according to critics, particularly in the Northeast.

If approved by regulators, Enexus Energy Corp., to be based in Jackson, Miss., will become a separate, publicly traded company in the next several months. Stockholders of New Orleans-based Entergy would receive Enexus shares on a pro-rata basis. The exact number has not been determined.

But there is concern over debts of as much as $4.5 billion that the new company would take on, including up to $3.5 billion paid to Entergy for the plants and other assets.

The Associated Press

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