US Airways Group posted a $1.6 billion profit for the first quarter, but conceded that it was in the black thanks to a $1 billion federally guaranteed loan that kicked in when it emerged from bankruptcy March 31. Otherwise, the carrier said, it would have lost $282 million, compared with a net loss of $269 million over the same period last year.
Ongoing friction between the US and some European governments may have cost defense contractor United Technologies Corp. (UTC) a $3.4 billion contract to build engines for up to 180 new military transport planes, a published report suggested. The award went instead to EuroProp International, a French/German/Spanish/British consortium, even though its bid was far higher. The Financial Times cited UTC chief George David as questioning whether the playing field was level after French President Jacques Chirac reportedly ruled out non-European engines for the A400M transporter. The planes would be a component of a new European Union force independent of NATO. UTC had proposed that its Pratt & Whitney Canada subsidiary build the engines, with much of the work outsourced to European suppliers.
General Motors paid at least $495 million to settle almost 300 lawsuits stemming from fatal crashes involving its C/K pickup trucks, the Los Angeles Times reported. The newspaper won release of the information from a federal court in Missoula, Mont., over GM's objections that doing so violated confidentiality agreements. The settlements all date back before the end of 2000 and involved trucks with fuel tanks mounted outside the frame. Amid criticism that the tanks could explode in crashes, GM changed the design after 1987.
The debt rating of Starwood Hotels & Resorts Worldwide was cut to junk status by Standard & Poor's, The Wall Street Journal reported. Starwood, based in White Plains, N.Y., owns the Westin, Sheraton, and W chains, among others. It is planning to sell 18 US and European properties for $1.8 billion to pay down debt, the paper said.
Without offering specifics, Qantas said it will take more cost-cutting measures, blaming the need on the spread of the SARS virus. The Australian national carrier also lowered its profit forecast for the second time in two months. Its chairman suggested the new measures would include additional job cuts, retirement of some jets, deferral in the delivery of new planes, and "significant" restructuring of work practices. Last month, Qantas announced 1,000 layoffs and a 20 percent reduction in international flights.