TEPCO to raise rates
Tokyo Electric Power Co (TEPCO) plans to raise electricity rates for companies from April to help offset the rising costs of fuel to run thermal power plants after the Fukushima Dai-ichi disaster shut down most of its nuclear reactors. The utility known as TEPCO will announce the size of the increase next month, it said in a statement. It will also seek approval from the government to raise tariffs for households “as soon as possible,” according to the statement. TEPCO estimates its fuel costs will rise by ￥830 billion (US$10.6 billion) to ￥2.31 trillion in the year ending March 2012. Only two of the company’s 17 nuclear reactors are now running after the March 11 earthquake and tsunami wrecked its Fukushima Dai-ichi plant.
IAG buys Lufthansa unit
British Airways parent IAG agreed to buy Deutsche Lufthansa AG’s BMI unit in the UK for ￡172.5 million (US$270.5 million), fending off a counterbid from Virgin Atlantic Airways Ltd. IAG will add as many as 56 additional daily slots at London’s capacity-constrained Heathrow airport through the acquisition, the London-based airline said in a statement yesterday. CEO Willie Walsh has said IAG wants Castle Donington, England-based BMI for its mainline operations at Heathrow, and will use the purchase to expand its own long-haul network, particularly on routes to Asia and Latin America. Buying BMI brings access to the 8.5 percent of takeoff and landing slots that IAG controls. UK billionaire Richard Branson’s Virgin also made an offer for BMI and has said British Airways is “already too dominant” at Heathrow and that competition authorities should be concerned.
LAN and TAM close to deal
LAN and TAM are one step closer to becoming LATAM, the largest airline in Latin America. Shareholders of Chile’s LAN Airlines SA approved the company’s US$3 billion purchase of Brazil’s TAM SA on Wednesday, creating one of the 10 largest passenger and cargo airlines in the world. Combined, the two companies had more than US$11 billion in revenue last year. The merged company, known as LATAM Airlines Group SA, will be led by LAN CEO Enrique Cueto as chief executive and TAM’s Rolim Amaro as chairman. Relatives of both men will remain atop each family-owned airline. The deal has been approved by Brazilian regulators and awaits the approval of Chile’s Supreme Court, expected early next year. Together, the group will have 40,000 employees serving more than 45 million customers a year, with flights to more than 115 destinations in 23 counties.
World Cup boosted GDP
New Zealand’s economy exceeded expectations to grow 0.8 percentage points in the September quarter as the Rugby World Cup boosted GDP, official data showed yesterday. Renewed strength in the manufacturing sector also lifted growth, meaning the economy expanded 1.3 percent in the 12 months to Sept. 30, Statistics New Zealand (SNZ) said. The quarterly result showed the economy bouncing back from growth of just 0.1 points in the three months to June and surpassed market forecasts of an 0.6 point rise. “Activity in the retail, accommodation and restaurants industry was certainly boosted by the Rugby World Cup, New Zealanders and visitors to New Zealand,” SNZ national accounts manager Rachael Milicich said.