TODAY

– April 17, 2014

California judge orders Walgreens to pay $16M

Walgreens stores accused of improperly handling hazardous wasteWalgreens stores accused of improperly handling hazardous waste(AP) — A California judge has ordered drugstore chain Walgreens to pay $16.57 million to settle a lawsuit claiming more than 600 of its stores in the state illegally dumped hazardous waste.

The settlement announced Thursday stems from a lawsuit filed in June by district attorneys around the state. The legal action followed inspections of trash bins at Walgreens stores.

It accused the stores of illegally handling and disposing pesticides, bleach, paint, pharmaceutical waste and other items. The stores were also accused of unlawfully disposing of customer records containing confidential medical information.

Walgreen Co. spokesman Jim Graham said the company did not acknowledge any wrongdoing and settled the case to avoid protracted litigation.

He said Walgreens ships all hazardous materials are shipped to a hazardous waste disposal facility, where they are incinerated.

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Written on 04/17/2014, 11:25 am by Business Journal staff
board-delays-chukchansi-leadership-decisionThe rightful leaders of the tribe that runs the Chukchansi Gold Resort & Casino in Coarsegold is still in doubt pending an order today by the Interior...
Written on 04/17/2014, 10:39 am by CANDICE CHOI, MAE ANDERSON, AP Business Writers
(AP) — Chipotle is feeling confident that customers are willing to pay more for its burritos, bowls and tacos. The Mexican food chain said Thursday that it would raise prices in the "mid-single digits" percentage wise for the first time in three years as its popularity continues to grow. Menu boards with the new prices should be in place at all restaurants by the early part of the third quarter. Steve Ells, Chipotle's co-CEO, said during a conference call with analysts that price is not the main reason customers visit its restaurants anyway. "Most of the value comes from the experience," Ells said. He noted that the company had earned "permission" from customers to raise prices because of that experience. And if needed, he said Chipotle still had the leeway to further raise prices without scaring off customers. "We've still got room," he said. The decision comes as higher costs for beef, avocados and cheese have pressured profit margins for the chain, with net income for the first quarter coming in below Wall Street expectations. Still, Chipotle said sales at established locations rose 13.4 percent during the period and it raised its outlook for the year. It now expects the sales figure to grow in the high-single digits, not including the price hikes. The Denver-based chain's popularity has surged in recent years because people like that they can pick what toppings to put on their orders. The chain's "Food with Integrity" slogan is also intended to underscore the higher quality of its ingredients, in comparison to places like Burger King and Wendy's. Those traditional fast-food chains have struggled to grow sales as customers increasingly flock to foods they feel are fresh or higher in quality. In contrast to Chipotle, for instance, McDonald's has said it will focus on underscoring the value it offers. McDonald's CEO Don Thompson has also noted that there is a bit of "bifurcation" in the fast-food industry, with better-off customers heading to pricier places. For the three months ended March 31, Chipotle Mexican Grill Inc. said net income rose 8 percent to $83.1 million, or $2.64 per share. That's up from $76.6 million, or $2.45 per share, a year ago. Analysts expected $2.86 per share, according to FactSet. Revenue climbed a stronger-than-expected 24 percent to $904.2 million from $726.8 million a year ago. Chipotle has also been expanding rapidly. It opened 44 restaurants during the quarter and plans to open 180 to 195 restaurants during all of 2014. It already has more than 1,600 locations. Its shares fell $10.80, or 2 percent, to $541.60 in midday trading. Its shares are up almost 70 percent since a year ago.
Written on 04/17/2014, 10:38 am by 
ANNE D'INNOCENZIO, AP Retail Writer
(AP) — Wal-Mart is offering another incentive to its customers to spend more time at its stores. The world's largest retailer introduced a new money transfer service Thursday that it says will cut fees by up to 50 percent compared with similar services elsewhere. The Walmart-2-Walmart service is being rolled out in partnership with Ria Money Transfer, a subsidiary of Euronet Worldwide Inc.Shares of MoneyGram and Western Union plunged almost immediately Thursday after the announcement. The service, which will be available starting April 24, allows its customers to transfer up to $900 to and from more than 4,000 Wal-Mart stores in the U.S. It's a huge footprint that could reshape that industry and is likely to set off a pricing battle. Customers can transfer up to $50 for a $4.50 service fee and up to $900 for $9.50. Comparable services elsewhere cost up to $70 when transferring less than $1,000, according to Wal-Mart. Western Union on its website puts the price of transferring $900 in New York between $20, if using a bank account, to $85 if using a credit or debit card. Wal-Mart is creating an expanding menu of financial offerings for customers, particularly for those with limited exposure to banks. Wal-Mart already offers prepaid debit cards and tax preparation services. Shares of MoneyGram International Inc., which could get hit the hardest, fell more than 15 percent to $15.25 in midday trading. MoneyGram is the company that currently provides money transfers to Wal-Mart. The stock of Western Union Co., its rival, fell nearly 6 percent to $15.19. MoneyGram could not be reached immediately for comment. But in a statement emailed to The Associated Press, Western Union said, "Our retail product and service offerings today are already quite diverse. " It noted that people have the flexibility to send money in minutes or next day from a retail agent location or online and they can also send money directly into a bank account. "The company is well positioned in the U.S. domestic money transfer space, having offered a fee of $5 for $50 since 2009," it added. Wal-Mart is aggressively trying to increase foot traffic in its stores after seeing comparable-store sales decline for four consecutive quarters. The Walmart-2-Walmart service may help stem that trend, giving customers just one more reason to spend more time inside Wal-Mart. Daniel Eckert, Wal-Mart's senior vice president of services, said that the move into the money transfer business gained momentum after company officials heard complaints from customers about high fees elsewhere. He acknowledged in a conference call Thursday that the program could bring more customers into stores, but he insisted that the goal is to offer shoppers more financial choices. Eckert told reporters that it didn't alert MoneyGram that it was teaming up with Ria, but said that for more than a decade Wal-Mart has had a strong partnership with MoneyGram and that it renewed its contract in 2012. He pointed out that MoneyGram has no money transfer limits and customers can transfer funds outside the U.S. using its services. "Walmart-2-Walmart brings new competition and transparent, everyday low prices to a market that has become complicated and costly for our customers," Eckert said. Shares of Wal-Mart Stores Inc., based in Bentonville, Ark., rose 32 cents to $77.54 in trading Thursday.
Written on 04/17/2014, 10:31 am by LORI HINNANT, Associated Press
(AP) — Small underground nuclear power plants that could be cheaper to build than their behemoth counterparts may herald the future for an energy industry under intense scrutiny since the Fukushima disaster, the incoming head of the Nuclear Energy Agency told The Associated Press. Size is relative — the modular plants could be about as big as a couple of semi-trailers — easily fitting on the dimensions of coal plants they're ultimately intended to replace in the U.S. They would have factory-built parts that are slotted together like Lego blocks and hauled by train or truck — making assembly possible anywhere. William Magwood, the incoming director of the Paris-based forum for nuclear energy countries, said the U.S. has a window in the second half of 2014 for the first contract to build one of the small, modular nuclear reactors, a key test to learn whether they can exist beyond the theoretical. The Energy Department has sunk $450 million into a multi-year effort to persuade companies that the technology can be developed profitably, but companies have been drifting away from the project, citing funding and regulatory questions. It would be at least another six years before one could be built. "Anything with nuclear takes a while, and that's appropriate when you're talking about a technology that has to be built correctly," Magwood said in an interview ahead of his formal introduction this week to his new post. "We haven't built one, so we don't know whether they're going to be financially successful." Microsoft founder Bill Gates has offered enthusiastic support — and investment funds — for similar micro-nuclear technology he believes can provide affordable electricity to the world's poor and help combat climate change. But one of the most promising developers in the Energy Department effort, Babcock & Wilcox Co., this week announced plans to scale back spending, citing the need for "significant additional investors." And safety fears could cause even communities hungry for new sources of power to hesitate, just three years after the meltdown at Japan's Fukushima Dai-ichi plant. In the United States, the untested technology is competing with a shale gas boom that upended the market. A full-size reactor costs $6 billion to $8 billion and takes years to build — and decades to recoup the costs. It can produce enough to power more than 700,000 American homes, more than 10 times the output of its smaller counterpart. "A small reactor ... can be built for a fraction of that cost," Magwood said, describing the costs as being in the tens of millions. "Also these plants potentially would have some safety characteristics that would make them viable near population centers." Gates is a major investor in the reactor development firm TerraPower, which is among a handful of U.S. companies still in the game for the small plants as well as versions that could, in theory, fit handily inside a shipping container. Those plans would have the reactors essentially consume their own waste. For now, the Department of Energy's mock-up indicates that the fuel is sealed into discrete building blocks which are then removed when it is spent. "If you could make nuclear really, really safe, and deal with the economics, deal with waste, then it becomes the nirvana you want: a cheaper solution with very little CO2 emissions," Gates told Rolling Stone magazine in an interview last month. But the essence of the technology is there already, since the modular reactors would mimic the ones that power U.S. nuclear subs, without the high-grade uranium. Japan's nuclear plants have been closed since the March 11, 2011, earthquake and tsunami damaged the Fukushima Dai-ichi plant, causing meltdowns in three reactors. The disaster forced the evacuation of 100,000 residents in a 20-kilometer (12-mile) zone around the plant and prompted governments worldwide to rethink nuclear energy. In the months that followed, Germany announced that it would phase out nuclear power by 2022 and construction plans were abandoned in several countries, including Italy, Malaysia and the Philippines.The idea of reactors spread out throughout a country— even smaller ones — strikes fear in the hearts of critics. After Fukushima, disaster plans that took years to put together were scrutinized with new urgency, leading to the realization that even neighboring countries might have very different ideas of what constitutes an emergency. "A similar accident in Europe would involve several countries, and we are currently in a situation where our decision-making criteria are not the same, in terms of sheltering the population, evacuating, distributing iodine pills," said Pierre-Franck Chevet, president of France's Nuclear Safety Authority. It's for that reason that Robert Rosner, a physicist at the University of Chicago's Energy Policy Institute, cautioned against seeing the new technology as the solution for the developing world. Rosner said the units are safer because they're protected underground against both internal accidents and external attacks, but the effects of nuclear meltdown are both far-ranging and long-lasting. "The people that operate them have to know what they're doing and they have to mean it. They can't be complacent about safety and security," Rosner said. France's nuclear plants produce about three-quarters of its energy needs, more than any country in the world. Chevet said the country, which has 58 full-sized reactors, has no current plans to build modular version domestically. Nuclear engineering firm Areva and government-owned utility EDF have cautiously joined a development consortium, but Areva said the "market remains very limited" — largely because development costs and regulatory hurdles leave the question of profitability unanswered. And that may point to one of the problems in turning theory into reality: Countries most able to make the investment have less incentive to do so. Both France and the U.S. are likely to extend the life of their aging plants to 60 or even 80 years. "The fact that they are old doesn't necessarily mean that they are not safe," said Magwood, whose new post falls under the Organization for Economic Co-operation and Development. "The analogy I often use is it's kind of like a car. You can replace many of the components in a car to keep it operating as long as you want."
Written on 04/17/2014, 10:23 am by ANNE D'INNOCENZIO, AP Retail Writer
(AP) — Target is vastly expanding the goods available to order by subscription as it fends off its biggest non-traditional retail rival, Amazon.com. The nation's second-largest discounter first dabbled with subscriptions last September, trying to win over haggard parents by making available 150 baby care products. Target expanded that program more than tenfold this week to nearly 1,600 items across a much wider array of products. Everything from beauty products and pet supplies to home office supplies, are now available for regular delivery. Target, based in Minneapolis, is playing catch up in the subscription business, which has exploded as companies test consumer appetites for almost every niche, from socks and razors, to sex toys. Amazon.com has been a big force in the subscription space. It offers its Subscribe and Save services. It also offers free, two-day shipping on many goods through its Prime memberships. Target is seeking to offer that same kind of convenience and win back hard-pressed customers who want convenience as much as they want savings. The retailer's free subscription program allows people to schedule shipments in four, six, eight, 10 and 12-week installments. Jason Goldberger, senior vice president of Target.com and its mobile division, told The Associated Press in an exclusive interview this week that the subscription services is expanding much more rapidly than had been expected at Target, driven by very strong demand. While Target does not break out online sales, Goldberger would only say that since the subscription service began just over six months ago, the babycare items that were part of the rollout now account for 15 percent of online sales for that specific category. Target's subscription service has its own perks. The discounter recently added a five percent discount on items ordered through the program. Customers using a Target branded card get another five percent discount. The subscriptions are part of a broader move online by Target. It recently began allowing people to order and pay for goods online, and pick them up at the store. The number of products that can be ordered online has nearly doubled to 60,000 since the program first began in October. But Target is late to that game, with Sears and Wal-Mart both allowing online orders for several years now. It's been a quick payoff, however. The pickup program now accounts for more than 10 percent of Target's online business, Goldberger said. Target is still determining how many products will be available by subscription, Goldberger said. "Our focus is how to serve the Target guests, not look at a competitor," Goldberger said.
Written on 04/17/2014, 10:21 am by BARBARA ORTUTAY, AP Technology Writer
(AP) — Facebook users in the U.S. will soon be able to see which of their friends are in close proximity using a new feature the company is launching on Thursday. Called "Nearby Friends," the optional tool will only be available to people who choose to turn it on. The feature uses your smartphone's GPS system to tell your Facebook friends you are nearby — provided they have the feature turned on. Rather than share your exact location, it will only show that you are nearby, say, within half a mile. If you like, you can manually share a more precise location with a specific friend you'd like to meet up with. Friends can see where you're located in a particular park, airport or city block. By default, your exact location will only be shared for an hour, although you can change this. The Nearby Friends feature will be turned off by default, so people shouldn't expect to broadcast their location unknowingly to their Facebook friends and acquaintances. It also won't be available to users under 18, said Andrea Vaccari, product manager at Facebook who has been working on Nearby Friends for the past two years. He says the tool "makes it easy to join your friends in the real world." If you want to. The feature has a lot of built-in precautions. Facebook, whose motto has long been "move fast and break things," is trying a different approach with Nearby Friends as it tries to avoid privacy fiascos that often bubble up when it makes changes to its service. The new motto, "ship love," is evident in the deliberate, cautious rollout of Nearby Friends, says Jules Polonetsky, director of the Future of Privacy Forum, an industry-backed think tank in Washington who's advised Facebook on privacy issues — including the latest feature. He thinks Facebook is showing "a deeper appreciation that with a billion users, any change needs to be implemented in a way that doesn't surprise the audience." Especially when it comes to privacy, especially when it comes to location-sharing. "Once you start bringing this to a mass audience, you need to be cautious," Polonetsky said. "So inadvertent oversharing is not possible." Of course, all the safeguards and slow rollout mean that most users won't have the feature available right away on Thursday but rather in the coming weeks and months. Initially it will go to people who are likely to appreciate it, Vaccari says, such as people who have "checked in" to various restaurants, bars or other locations using Facebook. Unlike with its Messenger app, Facebook isn't forcing people to use Nearby Friends, so there is a possibility that it won't catch on widely. Vaccari, who joined Facebook when the company acquired Glancee, his startup for meeting nearby people who share your friends and interests, sounds hopefully optimistic that they will. Facebook's employees have been testing out Nearby Friends since it's been in development, and Vaccari cites examples of Facebook-assisted serendipity, like when two people landed at the airport at the same time from different flights, saw that they did through Nearby Friends and shared an Uber ride home together. Then there was the time two were out shopping alone in San Francisco and joined forces after seeing that their co-worker was nearby. Nearby Friends, Vaccari says, is not really for the five to 10 close friends you have, the ones you feel comfortable texting or calling up to hang out. For these people, you "don't need a product," he says. But for the other 20, 30 or more, the ones you enjoy spending time with but wouldn't necessarily call, Nearby Friends may provide the extra push. Nearby Friends launches amid the growing popularity of location-based mobile dating apps such as Tinder and Hinge. But unlike those apps, Facebook's feature will only let you meet up with people you are already friends with. Users who sign up will be shown a short tutorial on how the feature works. In addition to friends who are in close proximity, users can also see which of their friends are traveling, and in general which friends are using the feature even if they are not nearby. For example, users in New York would see their nearby friends within half a mile, and below that see friends who are "near" San Francisco or Los Angeles. Then, if the New Yorkers travel to another city, they can meet up with friends there. Facebook says there are no current advertising plans for Nearby Friends. The company does not currently target ads to users based on their location, only their listed hometown. Of course, this could and will likely change.
Written on 04/17/2014, 10:00 am by 
BREE FOWLER, AP Technology Writer
(AP) — Secret Service investigators say they are close to gaining a full understanding of the methods hackers used to breach Target's computer systems last December. But the agency says it could take years to identify the criminals who stole some 40,000 debit and credit card numbers of Target shoppers and other personal information from as many as 70 million people in the pre-Christmas breach. And it may take even longer to bring the offenders to justice. The federal investigation is complicated by the international nature of high-profile digital heists. The perpetrators are likely located overseas, which makes extradition and prosecution difficult. As a result, the Secret Service is focused on monitoring the online activities of its suspects, in hopes that they'll be able to arrest them at an opportune moment, says Ari Baranoff, an assistant special agent in charge with the Secret Service's criminal investigative division. "We take a lot of pride in having a lot of patience," Baranoff said during a rare sit-down interview with the Associated Press at the agency's headquarters in Washington. "There are individuals we've apprehended that we've known about for 10 years and we're very comfortable indicting these individuals, sitting back and waiting patiently until the opportunity arrives that we can apprehend them." Target says it can't yet estimate what the breach will cost the company, but some analysts put it at close to half a billion dollars. The total cost of the breach —which also would include losses incurred by banks, consumers and others— could easily reach into the billions of dollars. Target, which is in the midst of its own investigation, has said very little about how the breach happened, except that it believes the thieves gained entry to its systems by infiltrating computers owned by one of its vendors, thought to be a Pittsburgh-area heating and refrigeration business. Baranoff couldn't speak specifically about the federal investigation into the Target breach, since the case is ongoing, but he talked candidly about the growing threat of large-scale, financially motivated cybercrimes and the Secret Service's efforts to stop them. Behind every major breach, there's usually a team of highly specialized cybercriminals who mainly know each other through online nicknames and reputations. Most aren't motivated by politics, just greed, Baranoff says. If the hackers do invest in anything, it's their own operations. An increasing number are building their own server farms, sometimes leasing space to other criminals, making it harder for law enforcement to track them down. Further complicating matters, Baranoff says the vast majority of high-level cybercriminals tend to be Russian speakers based in former Soviet and Eastern European countries, which largely puts them out of the reach of U.S. authorities. But the Secret Service has strong ties with cybercrime agencies in many countries — including The Netherlands, Germany and the United Kingdom — and has found others to be helpful as well, even if they don't have extradition treaties with the United States. While best known for protecting the president of the United States, the U.S. Secret Service was originally formed in 1865 to investigate crimes related to counterfeit currency. The passage of the Patriot Act following the Sept. 11 terrorist attacks expanded its role in investigating computer-related crimes. From the agency's unassuming headquarters a few blocks from the bustle of the National Mall, special agents infiltrate online forums frequented by hackers, monitoring their activities, and creating online undercover identities in hopes of infiltrating criminal networks. The same kinds of activities take place at the Secret Service's other electronic crimes task forces in the U.S. and overseas. The tactics the investigators use are surprisingly similar to the law enforcement methods used by traditional beat cops everywhere. But digital investigations come with their own challenges. And based on the growing volume of stolen data now up for sale, hackers are becoming more sophisticated and more successful at evading justice. Chester Wisniewski, senior security adviser for the computer security firm Sophos, says it's the Secret Service's ability to coordinate with law enforcement agencies around the world that make it effective in fighting cybercrime and help speed things up. "With electronic crime, criminals move extremely fast and they're dependent on the police being tied up in red tape," Wisniewski says. But challenges remain. After years of work, agents might be able to shut down a message board where stolen credit card numbers are bought and sold, but there's nothing to stop another from replacing it the next day, he says. Meanwhile, political and economic pressure on countries known to harbor cybercriminals can also help, Wisniewski says, noting that U.S. promises of a better trade status helped eliminate much of the cybercrime that previously originated in Romania. Despite all of that, many countries, including Russia, follow an unwritten rule: they won't pursue cybercriminals as long as they don't commit crimes in their own countries, Wisniewski says. Baranoff says criminals could evade U.S. capture indefinitely if they stay hunkered down in their homes, but they're generally not happy staying put and like to spend their ill-gotten gains on trips to countries friendly to the U.S. That's when authorities can make their move. "These actors are making a lot of money and they want to travel," Baranoff says. "Some have suggested that there's no greater punishment actually than forcing them to stay where they are."
Written on 04/17/2014, 9:55 am by The Associated Press
(AP) — Weibo Corp.'s shares are rising in the Chinese social media company's debut in the U.S. Weibo provides a Twitter-like service that allows users to post up to 140 Chinese characters to share with others. Weibo has 61.4 million average daily active users, according to its filing with the U.S. Securities and Exchange Commission. The company raised $285.6 million, pricing 16.8 million American depository shares at $17 each. That's the low end of the expected $17 to $19 range. Its shares are trading on the Nasdaq under the symbol "WB." They are up 11 percent to $18.90 by midday Thursday. Weibo is incorporated in the Cayman Islands but conducts business in China. Chinese online media company Sina Corp., Weibo's parent, remains a majority owner. It also trades in the U.S.
Written on 04/17/2014, 9:51 am by Business Journal Staff
Zocalo Public Square will present the discussion “Will Obamacare Fail Fresno?” at 7 p.m. April 30 at Frank's Place at Warnors Center for the Performing Arts, 1432 Fulton St. in Fresno. Zócalo Public Square is a not-for-profit daily ideas exchange that blends live events and humanities journalism.  In Fresno County, approximately 200,000 people did not have health insurance before Obamacare. But the county is struggling to enroll people in the new exchanges. And while some low-income residents are signing up to participate in the Medi-Cal expansion that comes with the new law, it’s unclear whether many Fresno doctors will accept new Medi-Cal patients. Fresno County, which has a history of resisting state and federal social programs, may not build the infrastructure needed to handle a greater volume of enrollments. Why has Fresno been so challenging for Obamacare, and what can communities and local governments do to make it easier for people to receive these new benefits? Will newly insured people who have never had health insurance be able to get the care they need? Fresno County Department of Social Services Deputy Director Deborah Martinez, Centro La Familia Executive Director Margarita Rocha and Clinica Sierra Vista Deputy Chief of Programs Kevin Hamilton visit Zócalo to discuss whether Fresno will be able to complete this transition to Obamacare, or whether the region could be left behind by this historic change in healthcare.
Written on 04/16/2014, 10:37 am by SCOTT MAYEROWITZ, AP Airlines Writer
 (AP) — Airline executives frequently complain about fuel costs. But the truth is higher prices actually have been good for business. In the past six years, airlines have overhauled the way they operate to adjust to this new reality. They've shown more discipline by offering fewer seats, which ensures airfares are high enough to cover costs. Unprofitable routes have been eliminated. And every expense has been scrutinized. These changes, along with high oil prices, have created an insurmountable roadblock to startup airlines that hope to undercut established carriers. "Traditionally, it was too easy to start an airline and too difficult to kill one off," says Jamie Baker, an airline analyst with JPMorgan Chase. No more. A decade ago, airlines were paying just $1.42 a gallon for fuel, when adjusted for inflation. Last year, they paid an average of $3.03 a gallon, according to the Bureau of Transportation Statistics. Fuel now accounts for more than a third of airlines' expenses, overtaking salaries, wages and benefits as the single biggest line item. U.S. carriers burned through 16 billion gallons of jet fuel last year at cost of $48.4 billion. That's up nearly $23 billion from 10 years ago — when the airlines consumed 2 billion more gallons of fuel. So why is this good? High oil prices forced the major airlines to do business differently. They grounded older, gas-guzzling jets. Then they charged extra for checking baggage and raised other fees. More passengers were packed into planes and mergers helped push airfares higher. The average cost of a roundtrip domestic ticket — including baggage and reservation change fees — grew to $378.62 from $351.48 in the last five years, when adjusted for inflation. All of that has them on pace for a fifth consecutive year of profits. A big reason for the streak: The majors aren't facing the myriad of fly-by-night start-ups that disrupted their business in the past. Low-cost carriers like PeopleExpress and ValueJet used to be able to enter markets, charge a lot less to fly and push the established carriers out. Now — since fuel is such a great expense — that doesn't happen anymore, said Scott Kirby, president of American Airlines, at a recent aviation symposium in Phoenix. "It's an equalizer," Kirby said. Skybus Airlines launched in May 2007 promising to sell at least 10 seats on each of its flights for $10. By the following April, a spike in fuel prices proved fatal and the airline shut down operations overnight. Without that competition, legacy carriers have avoided fare wars and kept ticket prices high. "This represents the longest post-deregulation stretch that nobody has started a new airline in the United States," Baker says. Virgin America was the last major new U.S. carrier. But since it started flying in August 2007, the San Francisco-based airline has lost hundreds of millions of dollars. It didn't post its first annual profit until last year and that was only after it stopped its rapid expansion. Jeff Knittel, president of transportation and international finance at CIT, which leases planes to airlines, says the high fuel costs has created a financial discipline among carriers that has made them look closely at every expense — in the air and on the ground. As part of their quest to reduce fuel consumption, airlines have replaced drink carts with new, lighter ones. Planes now taxi with only one engine running. And wingtips have been redesigned to reduce drag. "It has forced efficiency throughout the entire organization," Knittel says. High oil prices have also caused lenders to take a closer look at business models. In the past, they just considered the collateral — the airplane — that they were lending against. "It makes the merits of the airlines matter more than they have in the past," says Hunter Keay, an airline analyst with Wolfe Research. Airlines are only expanding to cities where they know they can make money, limiting competition and keeping everybody's flights profitable. Instead of fighting to become the largest airline in a city, airlines are now making rational decisions based on profitability. "The only universal disciplinarian across the entire global airline industry is high oil prices," Keay says. "It makes even the bad actors make hard choices."

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Written on 04/17/2014, 10:21 am by BARBARA ORTUTAY, AP Technology Writer
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Latest National News

Written on 04/17/2014, 10:39 am by CANDICE CHOI, MAE ANDERSON, AP Business Writers
(AP) — Chipotle is feeling confident...
Written on 04/17/2014, 10:38 am by 
ANNE D'INNOCENZIO, AP Retail Writer
(AP) — Wal-Mart is offering another...
Written on 04/17/2014, 10:31 am by LORI HINNANT, Associated Press
(AP) — Small underground nuclear power...
Written on 04/17/2014, 10:23 am by ANNE D'INNOCENZIO, AP Retail Writer
(AP) — Target is vastly expanding the...