Thursday PM August 14th, 2008

British Airways, American Airlines and Iberia Airline sign joint business arrangement…Bush signs legislation banning lead from children's toys…FTC proposes rule addressing petroleum market price manipulation…

British Airways, American Airlines and Spain’s Iberia Airline have signed a joint business arrangement on flights between North America and Europe. The three airlines are planning to file for worldwide antitrust immunity from U.S. authorities. They’re also notifying European regulatory authorities. A deal between the three has long been anticipated. Rival British carrier Virgin Atlantic earlier this week sent a pre-emptive letter to both U.S. presidential candidates warning that a deal would be anticompetitive on the lucrative trans-Atlantic route. But BA, Fort Worth-based American and Iberia argue a closer relationship on pricing and seat capacity will benefit customers by providing improved connections and flight schedules. Under the joint business agreement, the three will cooperate commercially on flights between the United States, Mexico and Canada, and the European Union, Switzerland and Norway. All the while, they’ll continue to operate as separate legal entities. They’ll also expand their codeshare arrangements on flights within and beyond the European Union nations and the United States. That’ll significantly increase the number of destination choices the airlines can offer customers.

The Federal Aviation Administration has accused American Airlines of safety and drug-testing violations. The agency says Fort Worth-based American returned two aircraft into service after pilots reported safety problems. The FAA says two MD-83 jets were flown 58 times in violation of federal safety regulations. The Feds also cited the nation’s largest carrier for deficiencies in its drug and alcohol testing programs. The FAA is seeking more than $7 million in penalties from American.

President Bush has signed legislation that bans lead from children’s toys, imposing the toughest standard in the world. The measure, approved by Congress two weeks ago, strengthens rules for the Consumer Product Safety Commission concerning toy safety and restricting marketplace practices used by the tobacco industry to target children. The commission estimates there are about 28,000 deaths each year from unsafe products, including toys, in the United States. More than 33 million people were injured last year by consumer products.

BP says it has resumed pumping gas into a pipeline that runs through Georgia, while two oil pipelines that also run through the country remain closed. BP says it began pumping gas into the Baku-Tbilisi-Erzurum pipeline earlier Thursday. It had stopped pumping gas into the pipeline on Tuesday because of security fears. BP’s Baku-Supsa oil pipeline–also shut down on Tuesday–remains closed as the company continues to assess the security situation. The larger Baku-Tbilisi-Ceyhan line remains out of action after a fire earlier this month on the Turkish section of the line. BP says engineers are still trying to review the damage and no time has been set for the reopening of that line.

BP says a Russian labor court has barred the chief executive officer of its troubled Russian joint venture, TNK-BP, from office for two years. BP says it is disappointed by the court’s decision and says that Robert Dudley will retain his position until completion of an appeal process. American-born Dudley had left Russia last month when his work permit was not renewed, but has been continuing to work as CEO from outside the country.

A lawsuit has been filed in state district court by a relative of three of the victims of the bus crash near Sherman–seeking unspecified actual and punitive damages. Lau Pham is suing the vehicle’s manufacturer, owner and driver for negligence. His wife was injured and his mother-in-law, Cham Nguyen, and sister-in-law, Catherine Tran, were among the 17 who died as a result of the accident early last Friday. The Houston Chronicle reports Pham, who was not among the 55 passengers on the bus, filed the lawsuit in state district court naming Angel de la Torre and his bus firms. He’s also suing the bus driver, Barrett Wayne Broussard, and Motor Coach Industries, the bus manufacturer. Broussard is in a Sherman hospital in critical condition. None of the parties named in the lawsuit could be reached for comment.

The Federal Trade Commission has proposed a rule addressing petroleum market price manipulation. The proposed rule is modeled after rules already enforced by the Security and Exchange Commission regarding stock sales and by the Federal Energy Regulatory Commission concerning electricity and natural gas transactions. The rule would make it illegal to use fraudulent or deceptive practices when selling crude oil, gasoline or petroleum distillates at wholesale. Refiners, pipelines or investment banks would be prohibited from providing false information to private data services to deceive others.

Democratic Senators say a government report issued last month on oil prices was based on flawed information. They’re asking for an investigation into the matter. In a letter to the inspector general of the Commodity Futures Trading Commission, four Senators criticized an interim study that said fundamental supply-and-demand factors were to blame for the run-up in oil prices. The study played down the role of speculation. The Senators said the study was based on inaccurate data and they questioned the timing of its release. The study was issued a few days before the Senate voted not to move forward on legislation that would have required the commission to set limits on trading in oil markets by investors and speculators.

AAA Texas reports the average cost per gallon for regular unleaded gasoline slipped to $3.64, or down ten cents in the past week. Nationally gas prices also tumbled, by seven cents, to settle at $3.78. That’s down about a penny a gallon over the past day, marking further pullback from the peak in gas prices in mid-July. The association reports gas prices in Texas are still 96 cents higher than one year ago. Corpus Christi has the least expensive gasoline this week, at just below $3.59 a gallon. El Paso was on the high end, at $3.74 per gallon. AAA Texas spokesman Dan Ronan says the price of crude oil has fallen some $30 a barrel in recent weeks and that’s translating into big cuts at gas stations.

If you are waiting for a DVD from Netflix, you may have to wait a while longer. The DVD-by-mail service says it has been hit with technical problems, hurting its ability to send out disks. A Netflix spokesman says it was able to send out some discs Wednesday, but none were shipped on Tuesday and it hadn’t shipped any this morning either. The problems affect all of Netflix’s 55 shipping centers. The company hasn’t specified the problems, nor has it identified the root cause. About a third of the company’s more than eight million subscribers are currently waiting for DVDs held up by the problems.

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