Business & Finance
Air France and KLM Royal Dutch Airlines announced the largest shakeup in the history of European commercial aviation, a tight alliance valued at just under $1 billion. The combined company will be the Continent's largest carrier and the world's fourth-largest, serving 226 destinations with a fleet of 540 planes, and with annual revenues of about $22 billion. The deal stops just short of a full merger, which would be difficult under tight European air travel rules. To evade those, the carriers will form a holding company, Air France KLM, and operate under their own names, using Charles de Gaulle Airport outside Paris and Amsterdam's Schipol as joint hubs. Industry analysts predicted the alliance will win approval from European Union regulators, and the carriers said they expect their deal to close next April. In Rome, Italy's national carrier, Alitalia, which already is in a loose alliance with Air France, said it will enter into discussions as soon as possible to join the new union.
Troubled Sun Microsystems will take a $1.05 billion charge for the fourth quarter of its 2002 fiscal year, reports said, after realizing that its first quarter of the current year resulted in red ink. Originally, the Santa Clara, Calif., company had reported a quarterly profit of about $12 million. The Financial Times said Sun's disappointing earnings were a reflection of its struggle to adjust to a market in which many corporate customers have come to prefer the lower-cost Linux operating system for their computers rather than the more expensive system sold by Sun that is based on Unix technology.
Safeco Corp. announced plans to drop out of the life insurance and investments business, putting those units up for sale so it can focus on selling property and casualty policies to small- and medium-size commercial clients. The Seattle company said the move will result in 500 job cuts, most of them in behind-the-scenes departments.