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Hawaiian Air, Boeing extend lease talks

Hawaiian Airlines' primary aircraft lessor yesterday granted the carrier another 60-day extension to negotiate new lease terms.

Boeing Capital Corp. cannot take action during that time to repossess the 16 planes it leases to Hawaiian. It was the third extension granted by Seattle-based Boeing Capital.

The extension to Aug. 31 means both sides can continue trying to work out an agreement for Hawaiian's use of the aircraft while it attempts to reorganize its finances under Chapter 11 bankruptcy protection.

"Boeing's willingness to extend this protection is an expression of goodwill toward Hawaiian Airlines, which we appreciate," Hawaiian trustee Joshua Gotbaum said.

Hawaiian, the nation's 12th-largest carrier, filed for bankruptcy protection March 21. The company is seeking to restructure agreements for the fleet of Boeing 717-200 and Boeing 767-300ER aircraft it leases. The airline previously reached a similar extension with International Lease Finance Corp. Hawaiian and Ansett Worldwide have agreed to a restructured lease deal.

Japan visitors on the rise

Japan officials of the Hawaii Visitors & Convention Bureau are noticing a rise in Japanese bookings to Hawaii, aided by the bureau's two-month Summer Hawaii marketing campaign.

"Several tour operators have reported that bookings to Hawaii have increased significantly for the summer and are getting better with each passing month," said Steve Matsuo, the bureau's director of sales for Japan. The bureau's campaign ended with Gov. Linda Lingle's trip to Japan earlier this month.

Japanese arrivals to Hawaii dropped 30 percent to 40 percent in April and May because of the war with the Iraq, SARS and other events, but have improved this month.

According to the Japan Travel Bureau, tour package bookings for Hawaii have been ahead of last year's pace since mid-June.

Mayor touts improved credit rating

A recovering economy, a strong Oahu real estate market, improving financial management and manageable debt are the reasons given by Moody's Investors Service for upgrading the city's general-obligation bond rating.

Moody's raised Honolulu's bond rating one step to Aa2, the third-highest rating, from Aa3.

"The city's credit outlook is stable," Moody's said in a written report.

Mayor Jeremy Harris said that the upgraded credit rating validates the administration's position that the city's finances are strong.

"This is very good news for the city. It not only reaffirms to all of our citizens the strong, solid financial management of the city but it also tells investors internationally that Honolulu bonds are a good investment, are a safe investment," Harris said.

"When we do go and borrow money to build a police station or a fire station, we pay a lower interest rate."

House votes to block FCC rule

WASHINGTON >> House lawmakers voted yesterday to block a new regulation that would allow individual companies to buy up television stations reaching nearly half the nation's viewers.

The provision, included in a spending bill approved 400-21, would roll back part of a Federal Communications Commission decision overhauling decades-old restrictions governing ownership of newspapers and television and radio stations. That June 2 ruling by the Republican-dominated FCC was a victory for media companies who sought relaxed rules.

Opponents say the changes could lead to a wave of mergers leaving a dwindling number of companies controlling media. They are urging Congress to roll back all the changes, but the House measure only addresses TV station ownership. The FCC voted to allow single companies to own TV stations reaching 45 percent of U.S. households. The House measure would return the cap to 35 percent.

Abbott Labs pleads to obstruction charge

EAST ST. LOUIS, Ill. >> An Abbott Laboratories subsidiary pleaded guilty in federal court yesterday to obstructing a criminal health-care investigation and agreed to pay $600 million in fines.

Abbott treasurer Terrence Kearney pleaded guilty on behalf of the company before U.S. District Judge G. Patrick Murphy in East St. Louis, Ill.

The subsidiary, CG Nutritionals Inc., agreed to pay a $200 million criminal fine and $400 million to settle any civil claims in the case. It also agreed to five years' probation.

The settlement stems from Operation Headwaters, a broad federal inquiry into fraudulent sales of tube-feeding gear and other medical equipment.

Prosecutors set up a fake medical equipment store in southern Illinois as part of the investigation. Undercover federal agents posed as buyers of medical devices videotaped Abbott Laboratories salespeople urging them to overcharge Medicare and Medicaid for the equipment, prosecutors said.

In other news ...

>> Boeing Co. posted a second straight quarterly loss yesterday -- $192 million -- and cut its estimate for next year's profits and jet deliveries in a sputtering commercial aviation market it doesn't foresee recovering before 2005.

>> The committee representing Enron Corp.'s former employees in its bankruptcy case is attempting to recover $72 million in bonuses paid to 286 employees, officers and executives of the company in the final hours before Enron filed for bankruptcy.

>> Trying to recruit senior citizens as allies, the drug industry and other opponents of a plan to let consumers import their prescription drugs are waging an advertising, telephone and lobbying campaign to try to sway Congress against the measure.

>> Computer Associates International Inc. said yesterday it swung to a profit in its fiscal first-quarter amid an increase in revenue and improved cost efficiencies.