The head of Continental Airlines says the company would consider a merger to stay competitive--if the industry continues to consolidate. Chief Executive Larry Kellner offered details in a message to employees--two days after U.S. Airways made a hostile bid for bankrupt Delta Air Lines. Kellner says Houston-based Continental wants to remain independent and continue to grow. But he says if the landscape of the industry changes, they'll do what they need to do to act in the best interests of employees, customers, shareholders and communities they serve. Speculation that United Airlines might make a play for Continental or Delta as a merger partner has intensified since last Wednesday's U.S. Airways unsolicited bid.
Southwest Airlines sees U.S. Airways' $8 billion hostile merger bid for Delta Air Lines as an opportunity for the Dallas-based airline to make inroads on the east coast. Spokeswoman Edna Ruano says Southwest founder and board chairman Herb Kelleher has called the CEOs of both airlines to express interest in any assets that might become available. Merging airlines typically have to get rid of assets such as routes, gates and aircraft to allay antitrust concerns. Ruano says the possible merger would create the greatest overlap of services in the east coast, which is also Southwest's least-developed region. Southwest has routes to nine east coast cities in the northeast and mid-Atlantic, six Florida cities and Dulles Airport in Washington.
Delta Air Lines says it's recalling 700 maintenance workers who'd been furloughed. The carrier credits its ability to become more competitive. The recalled workers will support more international service next year, along with doing other tasks. This leaves close to 1,300 Selta maintenance employees on furlough. And Northwest Airlines is planning to hire 200 ground workers to do things like handle baggage, de-ice planes and push aircraft. Northwest says mild growth, along with attrition, make the hirings necessary. The jobs will all be located in Minneapolis.
Call it the year of the merger. Buyouts are so big that by the time the books are closed on 2006, merger activity should set a new record. The all-time best year was 2000, when the value of announced deals hit $3.33 trillion. As of Thursday, proposed acquisitions were at $3.37 trillion. And just as a basis of comparison, that's about 35 percent higher than the 2005 Gross Domestic Product of Germany, Europe's largest economy.
Since the first quarter of 2006, Class A office occupancy has jumped more than six points and absorbed nearly 5.5 million square feet, according to O'Connor & Associates. Top location absorption in two of the past four quarters has exceeded a million square feet. Increases in rental rates over the past seven quarters for Class A have gained $1.28 per square foot, while all classes average an increase of $1.01 psf. The most notable deals in the past months include the purchase of the long-vacant Four Allen Center, the former home of Enron, by Brookfield Properties. The building is being leased to ChevronTexaco. Construction on new office structures in the Energy Corridor and on the Katy Freeway are underway.
KBR has closed its initial public offering of 32 million shares at $17 a share, totally $544 million in proceeds. The Houston Business Journal says KBR's underwriters exercised their over-allotment option, purchasing an additional 4.18 million shares over the 27.84 million shares that KBR failed to sell. The Halliburton
French telecom gear maker Alcatel is suing Microsoft in an East Texas federal court for patent infringement. Alcatel filed Friday two complaints with a federal court in Tyler, seeking compensation for what the Paris-based company contends is a violation of its intellectual property rights. An Alcatel spokesman wouldn't comment on the details of the case. But he says Alcatel hopes a settlement can be reached out of court. Before filing the suits, Alcatel says it notified Microsoft of what it believed be unfair use of several patents. Microsoft hasn't filed a response, and the company's spokesman didn't immediately comment. Also last Friday, President Bush approved Alcatel's proposed $11.8 billion takeover of U.S-based lucent technologies. Alcatel's U.S. headquarters is in Plano, just north of Dallas. But last April, Alcatel said it plans to move those headquarters to New Jersey.
Reliant Energy has given $2 million this month in bill payment assistance funds to four social service agencies administering the company's Community Assistance from Reliant Energy program in the Houston area. The funds are from a rate case settlement with CenterPoint Energy. The money is in addition to the annual contribution to CARE by Reliant of about $900,000 each spring. There will be another disbursement from the CenterPoint settlement in September 2007.
Lubbock economic officials and a Mexico-based manufacturer have announced plans for a new $4 million flour mill. The Macsa Molinos Anahuac plant is expected to serve American tortilla plants. The Lubbock Economic Development Alliance agreed to provide more than $400,000 in incentives to the company. Officials say the new plant should start production next year. It's expected to create 58 jobs with an estimated annual payroll of close to $1.5 million. Alliance CEO Gary Lawrence says the city is working to attract manufacturing jobs at a time when cities are losing such jobs. The new plant will take raw white corn from suppliers across the midwest. The flour will be shipped by truck to its customers.
The Port of Houston Authority has been recognized by the Environmental Protection Agency for renewing its commitment to environmentally beneficial practices beyond regulatory requirements. The port is reducing total water usage by five percent, non-hazardous waste by 15 percent, emission of volatile organic compounds by 15 percent and energy use by ten percent. The port is constructing about 70 acres of wetlands from recycled construction material.