French President Nicolas Sarkozy and German Chancellor Angela Merkel paved the way on Saturday for European measures to tackle the global financial crisis but revealed little about their plans.
Sarkozy, whose country holds the rotating six-month presidency of the European Union, has called an emergency meeting on Sunday of the 15 countries that have the euro as their currency, with a view to taking steps to stop the rot.
“We have prepared a certain number of decisions that we will submit to our partners in the presence of the president of the European Commission and the governor of the (European) central bank. You understand that it is not appropriate for us to talk about it,” Sarkozy told a joint news conference with Merkel.
While the leaders would not provide details, they vowed to act in a coordinated manner, but ruled out an EU-wide bank rescue fund, an idea which EU officials say France originally floated but has since been scrapped in the face of opposition from Germany and others.
“We know where we want to get to and how we want to get there, but first we want to coordinate between the euro zone countries and then all of Europe,” Sarkozy said, adding that he would meet British Prime Minister Gordon Brown before the Eurogroup meeting on Sunday afternoon.
A source close to the French presidency said the euro zone leaders would discuss the possible creation of a bank rescue package which will take Britain’s initiative as a reference.
“There are two competing models. The American model, which no one wishes to draw inspiration from, and the British model. This is what everyone is talking about,” the source said, on condition of anonymity.
Britain’s rescue plan, launched last week, involved injecting 50 billion pounds ($86 billion) of taxpayers’ money into its banks and, crucially, to underwrite interbank lending which has all but frozen around the globe.
The International Monetary Fund will use a “rapid-fire'' emergency-loan program to lend hundreds of billions of dollars to emerging markets as the credit squeeze threatens to hobble nations that until this year were weaning themselves off the fund's aid.
Dominique Strauss-Kahn, the IMF's managing director, said yesterday he has activated the program, which could distribute a record amount of cash. The move comes as the cost of protecting bonds issued by a number of developing countries has climbed sharply, and nations such as Brazil, Mexico and Peru have sold dollars to shore up their currencies.
The financial turmoil may restore the Washington-based lender to a central role in the global economy. Demand for IMF assistance has collapsed in the past few years as buoyant capital markets and rising commodity prices allowed many developing nations to raise funds on their own and build up currency reserves. Now central banks around the world are drawing on those reserves as the credit crisis spreads.
“The IMF had been written off as increasingly irrelevant,'' said Claudio Loser, a scholar at Inter-American Dialogue, a policy-analysis center in Washington, and former director of the IMF's Western Hemisphere department. “Now we could see a renaissance at the fund. Countries that had hoped never to need the fund again may be forced to ask for help as the normal sources of finance dry up.''
Less Burdensome
Strauss-Kahn, 59, announced the plan on the eve of the fund's annual meeting this weekend in Washington. The program will allow the fund's 184 member nations to get loans in 10 days or less, rather than the usual several weeks it takes to process requests. Conditions the fund typically requires, such as cutting government spending, will also be less burdensome.
The IMF had $110.2 billion in outstanding loans at its peak as of Dec. 31, 2003. That had fallen to $17 billion as of September 30.
“The fund did not lend a lot during the last five or six years,'' Strauss-Kahn said. “We have hundreds of billions of dollars which are likely to be used in one year, and even more if we go over this period.''
Iceland's Prime Minister Geir Haarde said Oct. 8 an IMF loan is “definitely an option,'' and a mission from the fund was on the island yesterday. The government has taken control of the country's three biggest banks after they collapsed under the weight of debt.
At Risk
Win Thin, a senior currency strategist at Brown Brothers Harriman & Co. in New York, said in an Oct. 7 report that Eastern European nations are among the most at risk, because of large current-account deficits and high levels of external debt.
Estonia's current-account deficit — the broadest measure of trade because it includes transfer payments and investment income — is equal to 16 percent of the country's $28 faxless payday loans.6 billion gross domestic product. Its short-term debt is $10 billion, more than twice its $4 billion in foreign-exchange reserves, according to data compiled by Brown Brothers Harriman.
The data show Bulgaria's $14 billion in short-term debt equals three-quarters of foreign-exchange reserves, and its $12 billion current-account deficit is 25 percent of GDP.
Brazil sold dollars this week for the first time in five years, and Mexico sold $2.5 billion in the spot market Oct. 8 and 9, helping their currencies pare losses. Last month, Peru's central bank was forced to pour record sums into the foreign- exchange market to support its ailing currency.
Default Protection
The cost of default protection suggests other developing countries that may need help. Credit-default swaps for Kazakhstan imply a 52 percent chance the country won't meet its debt obligations in the next five years, according to Bloomberg data. Swaps for Pakistan indicate an 86 percent chance of default.
The IMF has been at the center of some of the biggest financial bailouts of the past three decades, helping broker solutions to the Latin American debt crisis in the 1980s and rescues for Mexico, Russia, Brazil and Asia in the 1990s.
The fund established its rapid loan program in the wake of the so-called Mexican peso crisis of December 1994, when the country was forced to abandon its currency peg to avoid depleting its reserves. During the next six weeks the Mexican peso plunged 45 percent, prompting a $17.8 billion loan from the IMF — at the time, the fund's largest.
In 1997 and 1998, the IMF extended credit lines of more than $80 billion to Indonesia, Thailand and South Korea to help them avoid default after a decline in their currencies pushed up the cost of foreign-debt payments.
Financial Losses
Even a modest pickup in loans would help stem financial losses at the IMF that totaled $165 million in 2007. The fund's first shortfall since 1985 led Strauss-Kahn to announce an 11 percent, or $100 million, cut in operating costs that included eliminating at least 380 of the IMF's 2,900 jobs. Even with the cuts, the fund is expected to lose $135 million in 2008.
“If there are no fires, then the fire department does not have much to do, and after a while people start to wonder whether they need a fire department at all,'' said Michael Mussa, the IMF's chief economist from 1991 to 2001. “This has been the position for the fund in recent years, but things have changed in just a few weeks.''
The Bank of England should cut the benchmark interest rate by a half point tomorrow after the economy tumbled into a recession in the third quarter, the National Institute for Economic and Social Research said.
Gross domestic product shrank 0.2 percent in the three months through September, the first contraction for a calendar quarter since 1992, the London-based institute, whose clients include the central bank, said today. The International Monetary Fund expects the economy to contract next year, according to a draft of its revised forecasts obtained by Bloomberg News.
“In view of these figures and of the intensifying banking crisis we take the view that the Bank of England should cut the interest rate by half a percentage point at its next meeting,'' Martin Weale, Niesr's director, said in a statement.
Niesr joined lobby groups including the Confederation of British Industry in calling for the biggest interest-rate cut since the aftermath of the Sept. 11 terrorist attacks in 2001. The Bank of England and central banks around the world pumped more than $480 billion into markets yesterday to stem the global financial crisis.
The IMF expects the U.K. economy to contract 0.1 percent next year after forecasting growth of 1.6 percent six months ago, the Washington-based lender said in a report prepared for the Oct. 10 meeting of finance ministers and central bankers. Consumer confidence fell to its lowest level since at least 2004, a separate report by Nationwide Building Society showed.
Crisis Meeting
The Bank of England will cut its benchmark rate by at least a quarter point from the current 5 percent tomorrow, according to 49 economists of 61 economists in a Bloomberg News survey (paydayloans). Six predict a reduction of half a point, including Citigroup Inc. and JPMorgan Chase & Co. Policy makers have left the key interest rate unchanged since April.
Prime Minister Gordon Brown was scheduled to meet Bank of England Governor Mervyn King and Financial Services Authority Chairman Adair Turner late yesterday to discuss the crisis. Brown's government is looking at “every aspect'' of the market turmoil, his spokesman said yesterday, refusing to rule out any measure to help the economy.
An index of consumer confidence dropped three points to 50, the lowest since the survey started four years ago, while the measure of sentiment about the current economic situation fell seven points to 39, Nationwide said.
A separate survey of job consultancies by KPMG and the Recruitment and Employment Confederation signaled that companies are hiring fewer workers. Demand for temporary staff fell to an 11-year low, the report showed.
“Rising unemployment, falling house prices and the continued turmoil in the financial markets are likely to mean that confidence will take some time to recover,'' Fionnuala Earley, Nationwide's chief economist, said in a statement.
Business confidence is also declining. The British Chambers of Commerce said yesterday that confidence among the 5,100 companies in its quarterly survey plunged to the lowest rate since the data began in 1989. Britain is in a “worsening recession,'' the report said.
The Federal Reserve may have trimmed borrowing costs yesterday without actually saying so.
The central bank used power granted under last week's financial-rescue legislation to effectively set a floor under its main interest rate that's lower than the 2 percent target set by policy makers last month. The Fed may now pay interest on bank reserves while it floods financial markets with liquidity, pushing down the overnight lending rate by about 0.75 percentage point to 1.25 percent.
“Absolutely, it's a stealth easing,'' said John Ryding, founder and chief economist of RDQ Economics LLC in New York and a former Fed researcher.
The announcement, and a Fed decision to double the auction of cash to banks to as much as $900 billion, failed to avert a 3.9 percent decline yesterday in the Standard & Poor's 500 Index. The index has tumbled 28 percent this year even as the central bank has expanded credit more than at any time in seven decades, including a 3.25 percentage-point cut in the main rate during the past 13 months.
“The problem is it's an easing that's trying to offset a massive tightening in the market. Net-net, are we easier in policy? In some sense the answer is no,'' Ryding said.
By paying interest on reserves, the Fed can pump more cash into the financial system without worrying the overnight lending rate will drop to zero at the end of each day as banks withdraw excess reserves. The move doesn't preclude a further reduction in the target rate by the Federal Open Market Committee.
Biggest Surprise
The 0.75-point spread, announced yesterday, was the biggest surprise in the Fed's moves to implement its authority under the financial-rescue legislation, economists said. The Fed set the new rate Oct. 3, the same day the House approved the bill and President George W. Bush signed it into law.
The FOMC, composed of the Washington-based governors and 12 Fed regional-bank presidents, meets about every six weeks to set a target for the overnight lending rate, which the New York Fed tries to achieve by buying and selling Treasury securities from bond dealers.
The Fed requires banks to keep a level of reserves at the central bank. On those funds, the Fed will pay a higher rate equal to the average target rate over a one or two-week period less 0.10 percentage point. For excess reserves, the rate is the lowest FOMC target over a period less 0 (fast cash loan).75 percentage point.
The Fed said it would raise or lower the spread so the New York Fed trading desk can keep the federal funds rate near policy makers' target “based on experience and in response to evolving market conditions.''
The central bank didn't set a meeting schedule for discussing the reserve-interest rate.
Channeling Cash
The federal funds rate will probably trade below the FOMC's target as long as the Fed is channeling cash into the banking system, thereby prompting financial institutions to park their funds with the central bank each day. The rate may trade closer to the policy target when the credit crisis eases and the Fed begins to withdraw its emergency lending.
Still, a “soft federal funds rate does not provide a perfect substitute for a cut in the target,'' former Fed Governor Laurence Meyer and former Fed researcher Brian Sack, now with Macroeconomic Advisers LLC in Washington, said in a research note to clients.
The Fed said yesterday “the rate on excess balances should be set sufficiently low to provide an incentive for eligible institutions to trade funds in excess of required reserve balances and clearing balances in the federal funds market.'' The rate should also discourage banks from trading funds “far below'' the federal funds rate.
The interest payments begin Oct. 9.
Start Lending
A higher rate on payments may give banks too much of an incentive to keep funds at the central bank, said Peter Hooper, chief U.S. economist at Deutsche Bank Securities Inc. in New York and a former Fed official. “The whole objective here is to get banks to start lending again, and the more you pay them to hold on to their reserves, the less likely they'll be willing to lend.''
Even if the funds rate trades below the 2 percent target, it doesn't mean the FOMC is deploying a new policy tool by paying interest on reserves, said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “I doubt the FOMC will want to give up their Fed funds rate target as the key indicator of monetary policy.''
Sunday is the new Monday.
From Wall Street to Washington, the U.S. credit crisis has claimed the leisurely weekend along with Lehman Brothers Holdings Inc. and Washington Mutual Inc.
“The news cycle is ruining everyone's weekend,'' Chris Rupkey, chief financial economist for Bank of Tokyo-Mitsubishi UFJ in New York, said in an e-mail. In addition to working more at the office, he's tethered to his BlackBerry on Saturdays and Sundays “waiting for the next shoe to drop.''
Every weekend since Labor Day, the meltdown has forced U.S. Treasury and Federal Reserve officials, members of Congress and Wall Street executives to huddle under pressure to react before Asian markets reopened.
On Saturday, Sept. 6, Treasury Secretary Henry Paulson gathered with the chief executive officers of Fannie Mae and Freddie Mac. On Sunday, Sept. 7, the government seized control of the mortgage-finance companies.
The following weekend, New York Fed President Timothy Geithner summoned Wall Street leaders to discuss the possible sale of Lehman Brothers. By Sunday night, Lehman was preparing bankruptcy papers and Merrill Lynch & Co. was selling itself to Bank of America Corp.
Forget Fishing
The next two weekends, government officials met in Washington to discuss a proposed $700 billion bailout of the financial-services industry.
The Senate approved the rescue on Oct. 1 and the House of Representatives is scheduled to vote on it today, setting up another weekend of work to study and implement details if the measure passes, or come up with something else if it fails.
“Every weekend, there's been a crisis,'' said David Kotok, chief investment officer at Cumberland Advisors Inc. in Vineland, New Jersey, which manages $1 billion in assets.
Kotok said he had planned to spend his September weekends on a fishing boat. Instead, he's been on his computer and phone, trying to translate details of the latest news to worried clients.
“I've been here the last three Sundays, and I'll be here this Sunday,'' John Silvia, chief economist at Wachovia Corp., said on Sept. 26, referring to the bank's Charlotte, North Carolina, headquarters. “A lot of people are here.''
Wachovia's What-If
Sundays at Wachovia were more like strategy sessions rather than actual workdays, Silvia said. He and his colleagues followed the news and came up with “what-if'' scenarios, he said.
The what-if for Wachovia came on the morning of Monday, Sept. 29, when the company agreed in principle to sell its consumer banking business to Citigroup Inc. The deal, triggered by Wachovia's mounting mortgage losses, was brokered by the Federal Deposit Insurance Corp. over the weekend.
Citigroup had more than 200 people “working on this nonstop'' for the 72 hours before the deal was announced, Citigroup Chief Executive Officer Vikram Pandit said in a Sept. 29 teleconference. Wells Fargo & Co. said today it had agreed to buy Wachovia for $15.1 billion in stock without federal assistance, ending the Citigroup deal.
Wachovia's Silvia said he'll be working again this weekend, studying the continued fallout from the crisis.
“It's almost most like the bubonic plague in Europe,'' Silvia said. “It just goes from one town to the other town and you wipe out the entire population fast.''
The Treasury Department sent Paulson and a team of aides to Capitol Hill at noon on Saturday, Sept (best payday loan). 27, spokeswoman Michele Davis said. Some worked with lawmakers until 3 a.m. on the rescue package, she said.
Sunday Buffets
That team was replaced the next day with one that also toiled overnight, this time on the Wachovia sale.
“Working weekends has become so normal here that we now have a buffet breakfast and lunch each day,'' Davis said. “Sunday was a spread more common on a day of watching football — wings, cheese sticks, hot dogs and chili.''
In New York on the weekend of Sept. 13, Shai Waisman, a partner at Weil Gotshal & Manges LLP, missed a planned dinner with friends from Texas who were on a layover at John F. Kennedy International Airport. He had to prepare papers for the Lehman bankruptcy, which his firm is handling.
That Sunday, a cousin from Israel arrived for a visit and let herself into his apartment. She stayed for seven days, Waisman said, and he never saw her once.
“I've never seen so many New Yorkers with the same ashen, exhausted look at the same obscene hours,'' Waisman said.
His firm is also handling the Washington Mutual bankruptcy. “I will be working this and every coming weekend for the foreseeable future,'' Waisman said in an e-mail yesterday.
`Days Run Together'
In Congress, the crisis has forced committees to schedule votes on other matters to late on weekend nights. The House Committee on Rules voted on tax-relief and energy-related bills at 10 p.m. on Sunday, Sept. 28, a “highly unusual'' time slot, said Emily Davis, a spokeswoman for Representative Pete Sessions, a Texas Republican who sits on the committee.
“The last time I had a day off was a couple weekends ago,'' Davis said. “The days just run together.''
The past several weekends, U.S. Representative Eric Cantor and his aides have dined on pizza, Popeyes fried chicken and “a couple nights of bad Chinese,'' said Rob Collins, chief of staff for the Republican from Virginia, who is deputy minority whip. About 10 Cantor staffers have been working weekends, Collins said.
Collins's wife, at home with their 10-month-old child, joined the social-networking site Facebook.com one weekend night as he worked until 11 p.m., Collins said.
The first message posted to her profile: “I wish Congress would pass this bill so my son could see his father for once.''
Paulson's Rest
Takeout Taxi, a Falls Church, Virginia, company that delivers food from Washington restaurants, has seen orders more than double to as many as 150 the last three Sundays from the typical 50 to 70, said call representative Jenna Burrows.
“Sundays are usually pretty slow, but we've had a dinner rush each night that lasts till 10 o'clock,'' Burrows said Sept. 29. “They want chicken tikka masala and kabobs.''
The long hours may be taking a toll on Treasury Secretary Paulson as well. During the marathon negotiating session Sept. 28 on Capitol Hill, he leaned back in his chair at one point and closed his eyes, sparking worries that he might need a doctor.
It wasn't a health crisis, just fatigue, said a person familiar with the deliberations.
NEW YORK — A measure of U.S. manufacturing activity contracted more than expected last month, hitting the lowest level since the aftermath of the Sept. 11, 2001 attacks, as new orders slowed dramatically.
The Institute for Supply Management on Wednesday released a September reading of 43.5, the lowest level since October 2001. The reading dropped from 49.9 in August, the largest one-month decline since January 1984, when it fell to 60.5 from 69.9.
A reading below 50 signals contraction.
"The headline ISM has plunged into recession territory," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
Wall Street economists had predicted a much stronger reading of 49.5, according to the consensus estimate of those surveyed by Thomson/IFR. The index has been hovering on what economists call "the boom-bust" line for most of the year.
The survey of purchasing managers found new orders fell to 38.8 in September from a reading of 48.3 in August. Employment, deliveries, inventories and manufacturers’ order backlogs also fell.
Industries reporting contraction included apparel, furniture, machinery, transportation equipment and electrical appliances.
High prices for commodities, along with tight credit conditions, have begun to squeeze companies. Pilgrim’s Pride Corp., the nation’s largest chicken producer, said last week it expected a "significant" fiscal fourth-quarter loss.
Separately, the Commerce Department on Wednesday said construction activity was flat in August, better than the 0.5 percent fall economists expected. The big surprise was a 0.3 percent rise in residential activity, the first increase in housing since March 2007.
Still, the government revised July activity to show a much bigger drop of 1.4 percent, compared to the 0.6 percent decline initially reported.
Momentive Performance Materials Inc. wants to cut 49 employees in its warehouse and maintenance divisions and outsource that work to outside companies.
The company, which is in the process of moving its headquarters to a site in Rensselaer County, announced the plans to the affected employees on Wednesday. Momentive has 5,000 employees worldwide; 20 percent of them work at a plant in Waterford, where the 49 jobs—which make up the warehouse and maintenance divisions—would be eliminated.
All but six positions are unionized, so the local 359 of the IUE-CWA must approved those job cuts, said Momentive spokesman John Scharf. The two sides have 45 days for bargaining and negotiations, he said.
If approved, the cuts would begin before the end of this year.
Union officials could not be reached for comment.
Momentive was formed less than two years ago when General Electric Co. sold its silicone plants for $3.8 billion to Apollo Management LP, a private-equity firm in Westchester County. The company makes adhesives, resins and sealants for a number of industries and business sectors, including cosmetics, agriculture and electronics.
Last year, the company lost $254 million on sales of $2.5 billion.
In mid-July, the company announced that it was moving its global headquarters from Wilton, Conn., to a yet-undetermined site in Rensselaer County, creating 150 jobs in the process. In exchange for $6.5 million in state funds, Momentive has committed to $150 million in new projects at its Waterford site over the next five years.
Scharf said Momentive will save money and become more productive by cutting the 49 workers in question and contracting with outside firms, who will hire their own workers to do the work at Momentive’s Waterford plant. He declined to provide an estimate of those savings.
Scharf said Momentive has not yet selected any firm to provide the work.
“We are hopeful that within those 45 days, we’ll reach an agreement,” Scharf said. If not, the union and Momentive could opt to extend the negotiation period, or there could be a work stoppage, among other options, Scharf said.
Workers who are laid off could be eligible for severance pay packages, as well as continued medical and dental benefits, Scharf said. Certain employees would also be eligible for tuition reimbursement and retraining benefits for up to 12 months after they are released.
European Central Bank President Jean- Claude Trichet said U.S. lawmakers must pass a $700 billion rescue package for banks to shore up confidence in the global financial system.
“It has to go, for the sake of the U.S. and for the sake of global finance,'' Trichet said in an interview in Frankfurt with Bloomberg Television late yesterday. “I am confident, but of course it is the decision of the U.S. Congress.''
President George W. Bush and Senate leaders yesterday vowed to revive a plan aimed at buying distressed assets from banks that was rejected by Congress a day earlier. The vote roiled markets already struggling to cope with the collapse of Lehman Brothers Holdings Inc. European governments have helped rescue at least five banks since Sept. 28, with Trichet taking part in talks to save Belgium's Fortis over the weekend.
Trichet said a pan-European approach to the banking crisis was unlikely, saying “we are not a fully-fledged federation with a federal budget.''
“Each country has to mobilize its own efforts,'' said Trichet. “But of course there is a European spirit and that is the spirit of the single market.''
Trichet declined to answer questions about ECB monetary policy before tomorrow's interest-rate decision. All 58 economists surveyed by Bloomberg News expect the central bank to keep its benchmark rate at 4.25 percent.
Clear Message
U.S. stocks plunged after lawmakers rejected a proposal that would give the Treasury broad power to buy mortgage-backed securities saddling investors and financial institutions with losses. Banks have recorded $588 billion in writedowns since the start of last year.
“I think the message from the markets yesterday was clear,'' Senate Republican leader Mitch McConnell said on Sept. 30.
Stocks rebounded yesterday on optimism the bill will be passed later this week. The Standard & Poor's 500 Index rose 58.35 points to 1,164.74, recouping more than half of the previous day's 8.8 percent plunge.
European leaders are trying to better coordinate their response to the financial crisis. Luxembourg Finance Minister Jean-Claude Juncker said yesterday he expects to meet with Trichet and French President Nicolas Sarkozy on Oct. 4 to discuss “a more systematic approach.''
Trichet's ECB has so far chosen not to follow the Federal Reserve in slashing interest rates since credit markets seized up 13 months ago, injecting cash into their markets instead, while keeping monetary policy focused on inflation.
Price Stability
“What's needed is for us to continue to tell our fellow citizens that we will ensure price stability,'' Trichet said in an interview broadcast yesterday on the France 2 television channel.
Belgium, the Netherlands and Luxembourg on Sept. 28 agreed to inject 11.2 billion euros ($16 billion) into Fortis, the largest Belgian financial-services company.
Governments and other authorities have also taken steps to protect the U.K.'s Bradford & Bingley Plc, Brussels- and Paris- based Dexia SA, Iceland's Glitnir Bank hf and Germany's Hypo Real Estate Holding AG. Ireland yesterday guaranteed the deposits and borrowings of six lenders.
Amcom Software Inc. has acquired CommtechWireless for an undisclosed sum, it announced Tuesday.
Eden Prairie-based Amcom said Jacksonville, Fla.-based CommtechWireless will expand its offerings in the health care, government and hospitality industries. CommtechWireless makes software for patient monitoring, emergency alert systems, customer paging and high-security government systems.
CommtechWireless has around 45 employees at offices located in the United States, Australia, Europe and Hong Kong. Amcom plans to run Commtech Wireless as a new division, retaining employees and operations in their current locations.
Delta Air Lines Inc. said Friday it would offer first and economy class aboard its shuttle flights beginning Dec. 1.
Delta spokeswoman Betsy Talton said prices will vary by route, but first-class seats will generally cost $100 to $250 more than economy.
Delta said it would offer 14 seats in first class and 128 in economy after reconfiguring its MD-88 jets used in shuttle service.
Open-seating - without assigned seats - will remain in each class, the Atlanta-based airline said.
Delta said elite "Medallion" members of its SkyMiles frequent-flier program would be eligible for free upgrades to first class.
To promote the service, Delta said new and current SkyMiles members can earn double miles on shuttle flights on or before Dec. 15 between New York’s LaGuardia Airport and Boston or Washington.
The airline said it is keeping perks such as free beer, wine, snacks and newspapers on the shuttle service and would expand selections in first class, where the seats will be wider and cocktails will be complimentary.
By next spring, Delta said, the entire shuttle fleet of nine planes will be equipped with high-speed Internet access and texting services through vendor Aircell’s Gogo system for $9.95 per flight.
Lee Macenczak, Delta’s executive vice president of sales and marketing, said dividing shuttle flights into two classes would give customers more options.
Delta said customers may see two-class service on some shuttle planes in November as the company completes the reconfiguration of its planes.
Delta (DAL, Fortune 500) shares fell 10 cents to $7.96 in afternoon trading.
Powered by WordPress -- XHTML 1.0