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HAWAII

Frequent flier cuts hit Hawaii route

With a new round of cuts to frequent flier programs about to kick in, it looks like Hawaii is one of the big losers. Starting June 4, Continental, Northwest and American will require 15,000 to 30,000 more miles -- a 25 percent jump over current levels -- to get to Hawaii from the U.S. mainland. The number of miles for a business class ticket at Northwest, for example, will jump to 150,000 from 120,000, while a coach ticket will go to 75,000 from 60,000.

The airlines say they're just keeping pace with the competition -- last summer, United hiked the cost of an upgrade to the islands 5,000 to 8,000 miles -- but it's about the last news Hawaii wanted to hear. Tourism to the state has slowed significantly this year.

"It's not a positive development," says Chris Resich, chairman of the board of directors for the Hawaii Chamber of Commerce, about the mileage changes. In all, he says, about a quarter of visitors to the state use frequent flier points to get there.

MAINLAND

United gets deal with mechanics

Chicago >> UAL Corp.'s United Airlines, the world's second-biggest carrier, reached a tentative contract with its mechanics that would save $349 million a year, wrapping up labor accords that are part of efforts to avoid liquidation.

The six-year agreement would cut wage rates 13 percent, raise employees' medical insurance co-payments and change work rules, the Machinists union said. United's pilots approved a contract that will save the company $1.1 billion annually, with 82 percent voting for it, the Air Line Pilots Association said.

UAL, which filed for bankruptcy protection in December, is seeking concessions from its unions by a company-imposed May 1 deadline. The company has been trying to shave $2.56 billion in annual labor costs and threatened to seek court approval to impose new terms on the workers if agreements couldn't be reached.

Moody's cuts airline debt ratings

MINNEAPOLIS >> Moody's Investor's Service lowered its long-term debt ratings for three of the nation's largest airlines yesterday, citing higher risks for debtholders because of the drop in airline traffic.

Moody's downgraded the ratings of NWA Corp. and its Northwest Airlines subsidiary, Houston-based Continental Airlines, Atlanta-based Delta Air Lines and ATA Holdings Corp., the parent of Indianapolis-based ATA Airlines Inc., the 10th-largest U.S. airline.

Even if airline traffic picks up, Moody's said pricing is expected to remain very competitive as some carriers reduce fares to generate short-term cash rather than long-term profits.

OPEC urged to keep production up

LONDON >> OPEC should think twice about cutting production to boost sagging oil prices because supplies are still tight and the immediate outlook remains cloudy, the International Energy Agency said yesterday.

But OPEC's president, Abdullah Hamad bin al-Attiyah of Qatar, said yesterday in Paris that the world's oil markets are glutted, and the resumption of Iraqi oil production could worsen that situation.

Officials at the Organization of Petroleum Exporting Countries said Monday that oil ministers planned to meet April 24 in Vienna, Austria, regardless of whether the Iraq war has ended.

Mortgage rates edged higher this week

WASHINGTON >> Rates on long-term mortgages edged up this week as the economy showed signs it is still working through a rough patch, economists said.

The average interest rate on a fixed-rate 30-year mortgage rose to 5.85 percent for the week ending April 11, the mortgage company Freddie Mac reported yesterday in its weekly nationwide survey. This week's rate was up from 5.79 percent a week ago.

In the middle of March, rates on 30-year mortgages declined to a record 5.61 percent, the lowest since Freddie Mac began tracking 30-year mortgages in 1971. Records that go back even further than Freddie Mac's indicate that the rate is the lowest since the early 1960s.

Tenet Healthcare posts $55 million loss

SANTA BARBARA, Calif. >> Tenet Healthcare Corp. reported a $55 million loss in its third quarter as it wrote down the value of some of its hospitals due to a sharp drop in Medicare reimbursement revenue and one-time costs from layoffs.

The company also lowered its earnings guidance for the full year, citing a decline in Medicare revenue and higher costs. The nation's second-largest hospital chain reported a net loss of 12 cents per share, in the quarter ended Feb. 28 in contrast to a profit of $280 million, or 56 cents per share, last year.

WorldCom may change its name to MCI

JACKSON, Miss. >> WorldCom Inc., which has struggled to escape the taint of an $11 billion accounting fraud, will take the name of its MCI unit next week, a source close to the company said yesterday.

The bankrupt telecommunications company is assuming the name of its consumer long distance unit because it believes the brand retains market cache, the source said, speaking on condition of anonymity. It also wasn't financially feasible to launch an unknown brand, the source said.