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Continental cuts flights as SARS hurts demand

CHICAGO >> Continental Airlines said today that it would suspend nonstop flights between New York and Hong Kong because of passenger fears caused by SARS, a new virulent form of pneumonia sweeping the world.

Continental, the No. 5 U.S. air carrier, said traffic from Hong Kong has remained stable, but passenger demand from the United States has plummeted because of government and health organization advisories against Hong Kong travel. The pneumonia-like disease has killed 100 people worldwide and infected more than 2,600.

Continental said it would suspend its five-times per week service from its Newark, N.J., hub to Hong Kong until June 2. The last flight to Hong Kong will be Thursday and the last flight to Newark Saturday.

The nonstop Newark to Hong Kong flight over the North Pole takes 15.5 hours, shaving at least two hours off other routes and making it a favorite of business travelers.

United Airlines has suspended daily flights between Hong Kong and Singapore for April. Northwest Airlines has made no SARS-related schedule changes, a spokeswoman said. And American Airlines has canceled no flights because of SARS.

American shrinks May schedule

NEW YORK >> American Airlines said today it will cut its planned May domestic flight schedule by about 2 percent and shrink its international schedule by 13 percent, as the entire airline sector struggles to bring its capacity in line with sagging travel demand.

American, the world's largest air carrier, barely avoided filing for bankruptcy protection last week by reaching tentative agreements with its workers for $1.8 billion in annual cost cuts.

American, the main operating unit of AMR Corp., said it will postpone the launch of its planned service between Los Angeles and Tokyo until next spring. The airline, which did not cite SARS as a reason for the delay, said it expected "some strengthening of the marketplace" for service between Los Angeles and Tokyo by the spring of 2004.

Consumer borrowing slows

Washington >> U.S. consumer borrowing through credit cards and auto loans slowed in February as Americans bought fewer new cars and trucks, Federal Reserve statistics showed.

Household credit increased by 1 percent, or $1.5 billion, the Fed said, after rising a $12.3 billion in January, the most since November 2001. The February total reflected the biggest drop in non-revolving credit, which includes auto loans, since October 1991. The report excludes loans secured by real estate, such as mortgages.

"The overall trend in credit has softened over the past two years, reflecting slowing consumption growth and the switch to cheaper home equity loans/cash-outs from mortgage-refinancing," said Ian Morris, chief U.S. economist at HSBC Securities Inc.

Economists had predicted a $3 billion rise in February credit based on the median of 42 forecasts in a Bloomberg News survey. The Fed previously said January consumer credit surged $13.2 billion. The central bank's credit statistics are often volatile and subject to revision.

The increase brought total non-mortgage credit in January to $1.74 trillion. Loans secured by real estate, which aren't included in the report, reached $6.053 trillion in the fourth quarter, the most recent data published by the Fed.

Average U.S. gas price drops 6 cents a gallon

CAMARILLO, Calif. >> Gas prices fell 6 cents a gallon nationwide in the past two weeks, the first drop in four months and the biggest two-week drop since October 2001, an industry analyst said yesterday.

Increased certainty about Middle East oil supplies resulted in falling crude oil prices, which led to the decrease, analyst Trilby Lundberg said.

The average price for gas nationwide, including all grades and taxes, was about $1.70 a gallon on Friday, according to the Lundberg survey of approximately 8,000 gas stations. That was a decrease of 6.03 cents from March 21, the date of the last Lundberg survey.

But Hawaii is bucking the trend,. The average Honolulu gas price rose 5.1 percent in the past month to $1.983 per gallon from $1.886, and has been hitting record highs since mid-March. A year ago, the average Honolulu price was $1.565 a gallon, according to a AAA survey.

On the neighbor islands, prices are even higher. The average price in Wailuku, Maui, is $2.296 a gallon, while the average price in Hilo is $2.157 a gallon.

OPEC considers emergency oil cut

PARIS >> OPEC said today it had proposed an emergency meeting of the oil cartel on April 24 to discuss cutting supply to stem a price drop after substantial U.S. military progress in its war against Iraq.

The Organization of the Petroleum Exporting Countries is concerned that oil prices, already down 30 percent in a month, could continue dropping unless cartel members rein in supplies raised before the war.

Crude oil for May delivery fell 66 cents, or 2.3 percent, to $27.96 a barrel today on the New York Mercantile Exchange.

Yahoo! search engine takes aim at Google

SAN FRANCISCO >> Yahoo! Inc. is rolling out a souped-up search engine today in a bid to supplant its business partner, Google, as the most popular place to find things on the Internet.

With the revisions, Yahoo believes its search engine will provide more useful information than Google's and be simpler to use. The rebuilt version will combine Google's index with Yahoo's customized services spanning sports, driving directions and weather reports.

Google declined to comment on Yahoo's new search engine.

Toppling Google won't be easy. In just five years, Google has become synonymous with online searching.

According to the industry newsletter, Google handles an average of 112 million searches a day, and Yahoo handles about 42 million. Most of Yahoo's results are generated by Google's software.