In the Region US Airways to begin reducing flights...

BUSINESS DIGEST

August 14, 2002

In the Region

US Airways to begin reducing flights, laying off workers

US Airways will soon trim flights and announce layoffs as it reorganizes under Chapter 11 bankruptcy, President and Chief Executive Officer David Siegel said yesterday in Philadelphia. He said he was holding news conferences in US Airways hub cities to affirm a commitment that service to any of the more than 200 communities to which the airline flies will not be eliminated.

Systemwide, trying to lure business travelers with extensive regional jet service and expanding international service will be key parts of the airline's effort to emerge from bankruptcy with a stronger balance sheet within six months, Siegel said.

He said the country's seventh-largest airline, which filed for bankruptcy protection Sunday, hasn't determined how many flights will be cut or how many employees will be laid off. "There will be some adjustment in our fleet size," Siegel said, adding that announcements will be made "in the near future."

Timonium company buys six Cellular Center stores

Communications Electronics, a family-owned wireless communications dealer based in Timonium, has purchased Annapolis Harbor Electronics' six stores.

The Cellular Center stores will be renamed Sept. 1 as part of Communications Electronics' new wholly owned subsidiary. They are in Annapolis, Crofton, Arnold, Severna Park and Glen Burnie in Anne Arundel County, and in Clinton in Prince George's County.

Communications Electronics now operates 12 stores as the largest independent distributor of Cingular Wireless products in the mid-Atlantic region, including stores in Baltimore and Carroll counties. Financial details of the acquisition were not disclosed.

Elsewhere

Pimco Total Return becomes 2nd-largest mutual fund in U.S.

Pimco Total Return Fund's assets surpassed those of Fidelity Investments' Magellan Fund yesterday, making the bond fund the second-largest long-term mutual fund in the United States.

Magellan's assets slipped more than $6 billion, ending last month at $59.9 billion, according to Fidelity's Web site. Pimco Total Return had $61.2 billion in assets as of yesterday, said Pimco Funds spokesman Phil Neugebauer.

Falling stock markets cut the value of Magellan's holdings, and investors redeemed about $1.27 billion, the biggest monthly outflow in more than 4 1/2 years, analysts said. Pimco Total Return, run by Bill Gross, is this year's top-selling U.S. fund. It took in $7.83 billion in the first half, as consumers turned to bond funds to shield investments, analysts said.

Adelphia creditors want proposed loan rejected

Adelphia Communications Corp.'s creditors have asked a bankruptcy judge to reject a proposed $1.5 billion loan to the cable television company because it promises $300 million in interest payments to earlier bank lenders.

A panel representing the creditors said the banks should not get the payments because they are partly to blame for $3.1 billion borrowed by the company's founding Rigas family that was guaranteed by Adelphia but not reported in its books.

The lenders - banks led by Bank of America Corp., Wachovia Corp., J.P. Morgan Chase & Co. and Bank of Montreal - "knew what they were owed," and they and the Rigases were the only ones in a position to know about the hidden debts, the creditors committee, which includes bondholders, suppliers and other unsecured creditors, said in a bankruptcy court filing.

Qwest agrees to pay $1 million to Colorado

Qwest Communications International Inc. has agreed to pay $1 million to Colorado, along with an undetermined amount of restitution to customers, to settle complaints that it engaged in deceptive marketing of its telephone services.

The settlement was announced yesterday by Colorado Attorney General Ken Salazar, whose office began investigating Qwest's marketing and customer-service practices last year after fielding hundreds of complaints.

Qwest spokesman Skip Thurman said he did not know when or how much the company expected to pay in customer restitution, which might appear as credits on Qwest bills. Salazar estimated that the restitution could total $1 million that Qwest must pay in addition to the $1 million it is paying the state, which will be used to offset the costs of the investigation, enforcement of the settlement and consumer education.

Tyco International to sell global switching center

Financially troubled Tyco International Ltd. is selling its new and never-used $75 million global telecommunications switching center on the Waianae Coast of the Hawaiian island of Oahu for less than a quarter of the original cost.

Some in the industry said the $18 million price is still too high, considering that many of the major telecommunications companies are in financial crisis.

Tyco representatives said the building in Maili is a casualty of troubles that halted expansion plans that included a $1 billion undersea fiber-optic cable linking East and West.

Pharmacia Corp. spins off its stake in Monsanto Co.

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