The news at a glance
British Airways: Labor unrest in the skies; Entertainment: Lions Gate rebuffs Icahn; Food: PepsiCo pushes more healthful snacks; Books: Barnes & Noble promotes online chief to CEO; Transport: FedEx’s blowout quarter
British Airways: Labor unrest in the skies
British Airways cabin crews staged a three-day walkout this week, to protest a proposed pay freeze and staffing cuts, said Michael Carolan and Daniel Michaels in The Wall Street Journal. The strike snarled air traffic across Europe, as BA canceled about 40 percent of long-haul flights. BA Chairman Willie Walsh has taken a “hard line” with Unite, the cabin crews’ union, and he appears to be “willing to take a hit to this year’s results to achieve long-run cost reductions.” The strike cost BA an estimated $15 million a day in revenue; a second, four-day strike is slated to begin March 27.
Travelers are “bracing for even worse times to come,” said David Jolly in The New York Times, as labor strife spreads to other European airlines. Alitalia flight crews and baggage handlers disrupted service with a four-hour strike this week, Air France crews plan a four-day walkout next week, “and pilots at Lufthansa and TAP Portugal are also in a combative mood.” The unions want pay increases and no reductions in cabin staffing, which management says are crucial to the airlines’ financial health.
Entertainment: Lions Gate rebuffs Icahn
The board of Lions Gate Entertainment, Hollywood’s largest independent studio, has rejected a $575 million takeover offer by activist investor Carl Icahn, said Claudia Eller in LATimes.com. Icahn, who made his fortune by buying stakes in companies and then pressuring their management to boost share prices, wants the studio to cut costs and drop its effort to buy Metro-Goldwyn-Mayer’s film library, which Icahn considers overpriced. Shareholders still have the option to sell their shares to Icahn, but analysts doubt they’ll do so unless he ups his offer.
Food: PepsiCo pushes more healthful snacks
PepsiCo this week announced plans to reduce the amount of sugar, sodium, and saturated fats in its top-selling snack foods by 25 percent by 2015, said Andrew Jack and Jonathan Birchall in the Financial Times. The move by PepsiCo, which along with its signature soft drink owns the Frito-Lay and Quaker Oats brands, is pre-emptive: Health officials in the U.S. and Europe “have threatened regulation if action is not forthcoming” on making its products more healthful.
Books: Barnes & Noble promotes online chief to CEO
Barnes & Noble has tapped William Lynch, head of the company’s dot-com operation, to be its new CEO, replacing Steve Riggio, said David Lieberman in USAtoday.com. The surprise promotion of Lynch, 39, signals the importance of electronic books to Barnes & Noble, which badly trails Amazon in that category. Barnes & Noble is also resisting a takeover attempt by billionaire Ron Burkle, who wants to oust Leonard Riggio, the company’s vice chairman; the Riggio family owns 31 percent of Barnes & Noble stock.
Transport: FedEx’s blowout quarter
FedEx this week posted a startling first-quarter profit gain of nearly 150 percent, a strong hint that the global economic recovery is gaining traction, said Wayne Risher in the Memphis Commercial Appeal. The Memphis-based company, “considered a barometer of the global economy” because of its role in the movement of goods, earned $239 million in the first quarter on revenue of $8.7 billion. It’s the company’s first year-on-year profit increase in five quarters.