Airline traffic fell again in June, providing another sign that most carriers are likely to report large financial losses for the second quarter. A downturn in business travel has robbed the airlines of their best customers. They’ve compensated by cutting prices to attract leisure travelers, but the math just doesn’t work out. One by one over the past few days, all the major U.S. carriers reported June results, and several reported double-digit declines in key financial measurements. “You are going to see some pretty ugly earnings numbers from the airlines for the second quarter,” said Stifel Nicolaus &Co. analyst Hunter Keay. “Everybody is in the same boat on demand and pricing. It’s tough out there.”
Delinquent loans hit record high
Consumer loan delinquencies edged up to another record high in the first quarter, according to data released Tuesday by the American Bankers Association. A continued rise in unemployment has been the main culprit for the continued rise in delinquencies, the trade association said. The composite delinquency rate among eight types of closed-end installment loans rose to 3.23 percent in the January-March period, according to the ABA’s consumer credit delinquency bulletin. That is the highest recorded since the bankers group began tracking the rate in the mid 1970s and tops the previous record of 3.22 percent set in the last quarter of 2008.
PACCAR directors halve dividend
Directors declared that PACCAR’s regular quarterly dividend will be reduced from 18 cents to 9 cents per share, payable September 8, 2009, to stockholders of record at the close of business on August 18, 2009. PACCAR has earned a net profit for 70 consecutive years and has paid a dividend every year since 1941. “We are adjusting the quarterly dividend payment as a prudent business measure in response to the global challenges affecting all industries,” shared Mark Pigott, PACCAR chairman and chief executive officer.
Royalty agreement for Internet radio
The future of Internet radio appears more secure after a handful of online stations reached an agreement Tuesday to head off a potentially crippling increase in copyright royalty rates. The deal is the product of two years of negotiations between webcasters and copyright holders. In March 2007, a ruling by the federal Copyright Royalty Board dramatically raised the rates that Internet radio stations must pay artists and recording labels — leading many online radio stations to warn that the new rates would put them out of business by eating up as much as 70 percent of revenue. At least one popular online radio service — Pandora Media of Oakland, Calif., which derives much of its revenue from advertising — said the new agreement will help ensure its survival.
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