Business Digest

BUSINESS DIGEST

October 19, 2004

In The Region

US Airways to add 230 daily flights, including 3 at BWI

US Airways Group Inc., operating in bankruptcy, will increase service from Charlotte, N.C., and Philadelphia and spread flights during the day, boosting its schedule 7 percent without adding aircraft.

With the changes, Baltimore-Washington International Airport will gain three flights a day, two to Charlotte and one to Philadelphia. That will boost total daily flights from Baltimore to 23 from 20 for the airline, but still will be hundreds less than in the carrier's heyday at the airport in the 1990s.

The changes, which begin Feb. 6, will add 230 daily flights to the Arlington, Va.-based carrier's 3,299, said Amy Kudwa, a company spokeswoman. US Airways, the No. 7 U.S. carrier, will increase revenue and save money with the altered schedule, Kudwa said, declining to give figures. US Airways sought Chapter 11 bankruptcy protection Sept. 12, its second such filing in two years.

Brady joins board of Swales Aerospace

James T. Brady, former secretary of Maryland's Department of Business and Economic Development, has joined the board of Swales Aerospace, a Beltsville company that makes small and micro-satellites.

Brady, who is Mid-Atlantic managing director of Ballantrae International Ltd., has more than 40 years experience in business and financial management. He serves on the boards of Constellation Energy Group, McCormick & Co., T. Rowe Price Group Inc. and Aether Systems Inc.

Before he took the state post, Brady worked at Arthur Anderson LLP for 33 years. Swales reported more than $160 million in revenue in 2003 and has 900 employees in Maryland, Virginia, California and Texas.

HealthExtras registers to sell 5 million shares

HealthExtras Inc., the Rockville pharmacy benefits management company, announced yesterday that it has filed a registration statement with the Securities and Exchange Commission to sell 5 million shares in the company, including 1.5 million held by current shareholders.

The company said it would use the proceeds of the offering to pay off the balance on its revolving credit facility and for working capital.

Elsewhere

N.Y. attorney general deepens probe of insurance industry

New York Attorney General Eliot Spitzer is expected to probe deeper into practices in the insurance industry, including examining other incentives insurance brokers set up with carriers, including a practice called "tying" in which a company demands clients buy another product along with the one they really want.

Health insurers Aetna Inc. and CIGNA Corp. confirmed yesterday that they have received additional subpoenas from Spitzer's office since the ones the companies disclosed in June.

Spitzer has already said the practice of paying "contingency commissions" or extra fees to insurance brokers weren't limited to Marsh & McLennan Cos. Inc., the company he sued last week. Other brokers who have been asked for more information include insurance brokers such as Aon Corp. and Willis Group Holdings Ltd. as well as several carriers including MetLife Inc. and Chubb Corp.

Analyst is arrested in bid to extort Hardee's parent

A stock analyst was arrested yesterday for allegedly trying to extort thousands of dollars from the parent company of Hardee's Food Systems of St. Louis.

In the midst of the extortion plot, analyst C. Clive Munro issued a negative report that caused CKE Restaurants Inc.'s stock to lose $160 million in value, said James G. Martin, the U.S. attorney for the eastern district of Missouri. Munro, 54, was arrested yesterday by the FBI at his home in Cheyenne, Wyo. He faces federal charges of extortion, wire fraud and securities fraud.

Munro, an independent analyst, published negative reports about CKE, but offered to stop if the company would hire him as a consultant at a fee of $25,000 per month for one year, Martin said.

U.S. to appeal WTO ruling against its cotton subsidies

The United States lodged a formal appeal yesterday against a ruling that ordered it to withdraw some of its subsidies for producers of cotton and other commodities, trade officials said.

Washington took its case to the appeals body of the World Trade Organization after a panel of trade experts - acting on a complaint from Brazil - ruled last month that many U.S. programs include illegal export subsidies or domestic payments that are higher than permitted by WTO rules.

Brazil alleges that the United States has kept its place as the planet's second-largest cotton grower and largest exporter because the U.S. government paid $12.5 billion in subsidies to American farmers between August 1999 and July 2003 alone.

Tyco unit is accused of infringing patent

Becton, Dickinson & Co., the world's largest maker of hypodermic syringes, told a jury that a Tyco International Ltd. unit cost the company $6 million by infringing a patent for a needle safety shield.

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