Gas prices on average rose about six cents across the country in the last three weeks. That's according to a survey of 7,000 stations nationwide. The Lundberg Survey found regular averaged $3.06 a gallon. Mid-grade was $3.17 a gallon and premium was $3.29. The lowest price was in Tucson, Arizona, where a gallon of regular cost $2.80. The highest was in Chicago at $3.46.
It has been a busy summer travel season for the major airlines--with some carriers posting record occupancy loads on their planes. Air carriers begin reporting second-quarter results this week--and airline profits for the April-June period are expected to be higher than a year ago. But the outlook isn't all clear skies. Analysts have lowered their earnings forecasts--in some cases by double-digit percentages. That's out of concern over everything from high fuel costs to summer storms. The up-and-down view from Wall Street is another indication that the industry still faces uncertainty as it emerges from several years of staggering losses. United Airlines filled 89 percent of its seats--its highest mark ever for June. Houston-based Continental Airlines reported a record occupancy of almost 88 percent, and Fort Worth-based American hit just topped 87 percent. But at American and United, planes were fuller because there were fewer of them flying. American--which is the nation's largest airline--carried 3.5 percent fewer passengers in June after cutting capacity by 5.4 percent. And even Dallas-based Southwest, which built its business around lower fares, has raised prices several times this year.
The president and CEO of the Travel Industry Association discussed the effect of travel and tourism policies at a meeting of the Greater Houston Partnership. Roger Dow says Houston has emerged as a national leader in shaping policies that help cities take part in the $7 trillion worldwide tourism industry.
"Houston is one of two airports in the country (that's) designated as a model airport, and I have to say they're way ahead of the other airport and have really (been) smoothing this out. They have a great new facility but this is going to become the model. What's happening in Houston, a lot of other airports are coming to visit Houston, and in fact, I'm going out there today to take a look at how they process people, this afternoon."
Dow believes an open attitude to international travel is important to the Houston region and the nation.
"I think the common question is people just say 'well gee, shouldn't we just batten down the hatches, put a wall around the United States and not let anyone in, and wouldn't we be better off?' And that's—the opposite is true. If we do that, we're going to actually create what we're trying to stop. We've got to get more people to come here to see who we are. There's millions and millions of legitimate travelers that want to come to America and we've got to get them here, because they're going to take the word back, and that's how we're going to get this world battle of ideas done, not through government, but through one-to-one people, like you and me."
Dow says Houston works because city government, federal and local agencies and the private sector are working in concert to create opportunities and overcome obstacles to attract more travelers.
A biodiesel-fuel producer says it will continue operating, despite a bankruptcy filing by a group of investors that claim the company hasn't been paying its debts on time. Five investment groups have filed an involuntary Chapter 7 bankruptcy petition against Dallas-based Earth Biofuels. The investment group says it collectively holds at least $33 million of the company's senior convertible notes, issued last summer. Earth Biofuels produces, distributes and markets biodiesel fuel, which is made for vehicles from natural seed and animal oils and liquefied natural gas. In its annual report filed with the Securities and Exchange Commission on May 18th, the company listed more than $60 million in losses for 2006. In a statement Friday, the company called the creditors' action unnecessary and said it will continue producing.
Defense attorneys tried to assure jurors in the corporate fraud trial of former media mogul Conrad Black that the case wasn't another Enron. It wasn't. But Enron turned out to be inextricably linked to the media mogul's downfall. A Chicago federal court jury's convictions of black and other former executives of Hollinger International was the latest in a series of triumphs by federal prosecutors. It follows an Enron-inspired crackdown on corporate crime that began five years ago this month. If not for the widespread outrage generated by the Houston energy company's scandal, legal experts say black and his cohorts likely would've gotten away with their crimes.
IHOP says it is buying the operator of the Applebee's restaurant chain for about $1.9 billion in cash. IHOP will pay $25.50 a share for Applebee's, which operates a chain of fast-casual restaurants and has been under pressure from shareholders of late. The two companies put the total value of the deal at $2.1 billion. IHOP, best known for the blue roof of its pancake houses, says it plans to franchise out most of the Applebee's company-owned stores. Same-store sales are down more sharply this year for Applebee's company-owned outlets than for its franchise locations. The deal is expected to close in the fourth quarter.
Medical device maker Reable Therapeutics announced plans to acquire orthopedic sports medicine maker DJO Incorporated. Austin-based Reable offered to pay $50.25 per share for Vista, California-based DJO. That's a 19.4 percent premium to the DJO's closing share price Friday. That adds up to $1.18 billion. Assumed debt brings the transaction value to about $1.6 billion. The deal has already been unanimously approved by the DJO board and committee of independent directors. It has 50 days to solicit better offers, but would have to pay an $18.7 million break-up fee if it finds one. Barring that, company officials say the acquisition should close by the fourth quarter of 2007. Reable CEO Ken Davidson says the deal is a strategic fit that will improve value to customers. He says customers could take advantage of both company's products in orthopedic rehabilitation and pain management.
Investors will see an increased pace of economic reports in the week ahead, as well as appearances before Congress by the Federal Reserve chairman. On Wednesday, Fed chief Ben Bernanke is to begin two days of appearances to deliver his semi-annual report on monetary policy. Investors will be curious whether he gives any clues regarding the future direction of interest rates. The Fed hasn't made a rate change in more than a year. On Tuesday, the government releases the Producer Price Index for June. The Consumer Price Index follows the next day, along with a look at housing starts. Later in the week, the Conference Board reports on the Index of Leading Economic Indicators.