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US Airways reverses some restrictions

Reacting to response from business travelers, US Airways backpedaled yesterday on some aspects of its recently announced restrictions on nonrefundable, advance-purchase fares.

With the reversal announced yesterday, mileage earned on cheap nonrefundable tickets will continue to count toward qualification for the various tiers of elite-level frequent flier status, US Airways said.

But the main component of the change announced last week, and subsequently adopted by other major carriers except United Airlines, remains in effect. That is, effective Oct. 1, nonrefundable tickets that are not used lose their value unless an alternate flight is booked on or before the travel date.

Amazon sues Expedia for $3.7 million

SEATTLE >> Amazon.com Inc. sued Expedia Inc. yesterday, saying that the Web-based travel firm had failed to pay the No. 1 online retailer $3.7 million due as part of a contract signed last year.

A spokesman for Expedia had no immediate comment.

In a complaint filed with the Superior Court of King County, Wash., where Expedia and Amazon both have their headquarters, Amazon said that Expedia breached the contract by "refusing to pay the amounts owed to Amazon.com unless Amazon.com renegotiated" its agreement to offer Expedia's services, according to a copy of the complaint.

After paying an initial $3.33 million, Expedia had failed to pay $3.7 million due since February of this year, Amazon said. Amazon is suing for that amount plus interest, attorney fees and expenses.

McDonald's mulls plan to spur slow sales

NEW YORK >> McDonald's Corp. said yesterday that it would discount two sandwiches and promote a menu of $1 items across the United States starting this fall, in a bid to spruce up lackluster sales in its biggest market.

The promotions are part of a strategy to drive growth in the United States, the company said in a statement. Roughly half of McDonald's U.S. restaurants now offer a dollar menu, but yesterday's announcement marks the first time McDonald's said it would roll it out on a nationwide basis.

Other proposals call for measures to improve customer service during peak lunch hours and investment in select restaurants for improvements ranging from new signs to complete restaurant remodeling, McDonald's said.

Citigroup nears settlement with FTC

Citigroup and the Federal Trade Commission confirmed yesterday they were close to an agreement to settle accusations that a consumer lending business acquired by the company two years ago engaged in aggressive and misleading lending practices.

Some analysts viewed the negotiations as an encouraging sign at a time when Citigroup is confronting a multitude of regulatory investigations and lawsuits regarding practices at its investment banking division, Salomon Smith Barney.

The potential settlement with the FTC concerns activities by employees at Associates First Capital, a lender that focused on customers with poor or less-established credit histories.

Boeing machinists end talks with mediator

SEATTLE >> The Machinists union ended its talks with federal mediators in the nation's capital last night, blaming The Boeing Co. for failing to budge on any key issues in its contract offer to its largest union.

The union said it will soon schedule a new vote on the aerospace company's contract offer from Aug. 27, and will urge the members to reject the proposal and vote to strike.