The Justice Department on Wednesday approved a much-anticipated merger between Delta and Northwest airlines, clearing the way for creation of the world’s largest airline. After a six-month investigation, government lawyers concluded the merger would likely drive down costs for consumers without curbing competition. The proposed merger “is likely to produce substantial and credible efficiencies that will benefit U.S. consumers and is not likely to substantially lessen competition,” the Justice Department said in a statement issued by its Antitrust Division.
U.S. air fare costs rise by 8 percent
Average U.S. air fares jumped 8.1 percent in the second quarter to their highest level since the government started keeping track 13 years ago. The Transportation Department said Wednesday that the average domestic itinerary fare in the second quarter rose to $352, breaking the record of $348 set in the first quarter of 2001. Airlines raised fees and fuel surcharges this year as they tried to offset high costs for fuel, which peaked at record levels in the first week of July — just after the second quarter ended. Even with the increases, however, most major U.S. airlines lost money in the quarter. In the past two months, many airlines have cut back on the number of flights they operate, which could push fares even higher.
Office Depot chain may close stores
Office supply chain Office Depot Inc. said it may close some North American stores and sell some assets after it posted a worse-than-expected loss in the third quarter because of slumping sales in the region. Chief Financial Officer Mike Newman said the retailer will conduct a strategic review of its asset base during the fourth quarter, which could lead to charges and changes in the company’s structure. The company also said it planned to scale back the number of store openings for the remainder of the year — opening only three because breaking leases would be too costly — and was also slowing its efforts to remodel locations.
Starbucks teams with Global Fund
Starbucks Corp. is trying to rebrand itself in a tough economy as a company with a conscience, announcing a partnership with Bono’s Project RED label on Wednesday as it attempts to recover from a slowdown in consumer spending. The partnership with RED, co-founded by the U2 frontman, will donate a portion of the proceeds of selected holiday Starbucks drinks to the Global Fund to help raise funds for and awareness of AIDS in Africa, where the coffee company buys some of its beans.
Earnings fall for insurer MetLife
Life insurer MetLife says its third-quarter earnings fell 39 percent as it paid out $1.2 billion more in benefits and claims and recorded higher operating costs, but results met Wall Street expectations. Profit after paying preferred dividends fell to $600 million, or 83 cents per share, from $985 million, or $1.29, a year ago. Total revenue rose to $13.38 billion from $11.68 billion, as premiums, fees and other revenue rose 16 percent to $8.6 billion.
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