Boeing Commercial Airplanes Group and El Al Israel Airlines are considering forming a joint venture that would establish a new security and safety business for airplanes and airports. The two sides have signed a memorandum of understanding, Boeing announced Wednesday. Over the next 60 days, they will study the proposed venture. Among the topics: where to locate facilities, possible business plans and financial strategies. El Al is the world’s undisputed leader in airplane security, said Boeing Commercial Airplanes chief Alan Mulally. Combining its knowledge with Boeing’s expertise in air transportation would “create a formidable source of knowledge for the entire industry,” he said.
The cash infusion airlines received as part of a $15 billion-dollar federal bailout enabled Continental Airlines to record a net profit in the third quarter. The emergency money handed out in the wake of the Sept. 11 terror attacks was not enough to prevent America West from posting a larger-than-anticipated loss over the same period. Investors responded Wednesday by lifting shares of Continental by more than 5 percent, while leaving America West’s stock unchanged. Excluding the federal grants, Continental and America West reported operating losses of $97 million and $69 million, respectively, for the three months that ended Sept. 30.
Aer Lingus announced Wednesday it was slashing 2,000 jobs as part of a cost-cutting plan to save Ireland’s state-owned airline. Aer Lingus has been badly hurt by the downturn in air travel since the Sept. 11 attacks in the United States. Ireland’s flag carrier is losing $2.3 million a day and may run out of cash by January. The government has said that without private investment, the airline would not have the funds to cover the layoffs.
After plummeting to a nine-year low following recent economic losses and an investigation by federal securities regulators, shares of Enron Corp. jumped nearly 25 percent Wednesday amid speculation the company was ripe for takeover. Shares of Enron, the nation’s largest natural gas and power marketer, rose $2.74 to close at $13.90 Wednesday on the New York Stock Exchange. Though still down 69 percent since the company reported third quarter earnings just over two weeks ago. Enron shares began their steady fall in the middle of October, when the company reported a net loss of $638 million in the third quarter, taking a one-time charge of $1.01 billion attributed to investment losses, troubled assets and unit restructurings.
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