theSun | TUESDAY FEBRUARY 17 2009 19

news without borders

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Aussie court fines three
airlines for price fixing
SYDNEY: An Australian court has fined three
Europe-based airlines a total of A$16 million
(RM38.4 million) for price fixing, the country’s
competition watchdog said yesterday.
The Federal Court fined Air France-KLM A$6
million (RM14.4 million) after they admitted
fixing fuel surcharges in the air cargo market,
the Australian Competition and Consumer
Commission (ACCC) said.
It said Martinair of the Netherlands and
Luxembourg-based Cargolux International
were both fined A$5 five million (RM12 million)
after making similar admissions.
“This matter sends a clear message to
those involved in cartel behaviour – the ACCC
will not stop its endeavours to identify and
bring to an end illegal price-fixing conduct,”
commission chairman Graeme Samuel said in
a statement. – AFP
Obama targets housing fix
after stimulus victory
WASHINGTON: President Barack Obama
will head West this week bidding to cure
America’s epidemic of home foreclosures
after his gargantuan economic stimulus
plan finally cleared Congress.
Aides to the president – who Saturday
called the US$787 billion (RM2.833 trillion)
package of investment and tax cuts “a
major milestone on our road to recovery”
– said he would outline his housing plan in
Phoenix, Arizona tomorrow.
The day before in Denver, Colorado,
Obama will sign the stimulus package
into law, setting the seal on the first major
legislative triumph of his presidency just
under a month after he took office.
“I think it’s safe to say things have not
yet bottomed out,” White House spokes-
man Robert Gibbs told CNN Sunday.
But US states will start getting the stim-
ulus money “relatively quickly,” he said, “so
they don’t have to lay off police officers or
firefighters or teachers” and can begin to
create alternative energy jobs. - AFP
Japan says economic
crisis worst since WWII
TOKYO: Japan warned yesterday it was in
the deepest economic crisis since World War
II, after Asia’s biggest economy suffered its
worst contraction in almost 35 years in the
fourth quarter of last year.
The economy shrank for a third straight
quarter, sinking deeper into recession as
the global slowdown crushed demand for
Japanese exports, a key pillar of the world’s
number two economy.
The government said the slump was even
worse than the recession of the 1990s after
the country’s economic bubble burst, usher-
ing in a decade of economic stagnation and
deflation.
Japan’s economy contracted 3.3% in the
fourth quarter of last year – 12.7% on an an-
nualised basis, official data showed.
It was the weakest performance since
1974 when the country was reeling from the
first oil crisis, and the government said this
slump would be even more severe.
“This is the worst ever crisis in the post-
war era. There is no doubt about it,” Economic
and Fiscal Policy Minister Kaoru Yosano said,
warning that a rebound is impossible before
the global economy improves.
The figures were even more dismal than
analysts had expected and marked a sharp
deterioration compared with the third quar-
ter’s 0.6% contraction.
The current recession will be Japan’s
“longest, deepest and most severe in the
post-war period,” said Glenn Maguire, chief
Asia economist at Societe Generale in Hong-
kong.
The deepening gloom came as Finance
Minister Shoichi Nakagawa faced calls to be
sacked over his performance at key talks on
the world economy at the weekend in Rome,
where he appeared drowsy and slurred his
words. Nakagawa apologised yesterday for
his behaviour but denied being drunk, blam-
ing cold medicine.
Japanese exports plunged a record 13.9%
in the fourth quarter as demand for Japanese
cars, electronics and other goods slumped in
recession-hit overseas economies.
“Exports absolutely collapsed,” BNP Pari-
bas economist Hiroshi Shiraishi said.
“The first quarter could be even worse.
Exports continued to fall very sharply in
January and producers are planning to cut
production very, very aggressively,” he said.
Business investment in factories and
equipment dropped sharply as companies
scrambled to reduce their costs to cope
with the recession. Household spending also
slipped as consumers tightened their belts
following a wave of layoffs.
Hundreds of sacked workers protested
outside the headquarters of major Japanese
companies yesterday, calling for a better
social safety net.
Japanese firms including Sony, Nissan Mo-
tor and Hitachi have announced massive job
cuts in response to the country’s deepening
economic woes.
Chief Cabinet Secretary Takeo Kawamura,
the top government spokesman, said Tokyo
needed to take fresh measures to boost the
economy.
Before the global financial crisis erupted,
Japan had been enjoying its longest economic
recovery in post-war times.
But the recovery from the recession of the
1990s was driven almost entirely by soaring
exports. With demand now cooling rapidly
overseas, Japan’s economy has seen a dra-
matic deterioration in its fortunes. – AFP

Obama forming auto task

force, drops ‘car czar’ idea
CHICAGO: President Barack Obama has
decided to form a government task force for
restructuring the struggling US auto industry
instead of naming a “car czar with sweeping
powers, a senior administration official said
on Sunday.
Obama is appointing Treasury Secretary
Timothy Geithner as his “designee” for over-
seeing auto bailout loans and as co-head of
the new high-level panel along with White
House economic adviser Lawrence Summers,
the official said. “There is no ‘car czar’,”the of-
ficial said, speaking on condition of anonymity.
– Reuters
Singapore Airlines to cut 17% of fleet
SINGAPORE: Singapore Airlines said yester-
day it will cut 17% of its operating fleet and is
exploring other cost-saving measures amid a
global economic slump which has hit travel
and cargo demand.
The airline, one of Asia’s major carriers,
said in a statement that it will decommission 17
passenger aircraft over the financial year from
April this year to March next year, instead of
just four as originally planned before the global
downturn hit major markets.
An airline spokesman said Singapore Airlines
(SIA) had 102 passenger aircraft as of Feb 1.
“The drop in air transportation has been
sharp and swift,” SIA chief executive Chew
Choon Seng said in the statement.
“Given the falls of over 20% that we have
seen recently in air cargo shipments and the
tradition of demand for air travel following
closely behind trends on the cargo side of
business, we have to face the reality that 2009
is going to be a very difficult year.”
SIA said it made the decision in view of
falling demand which is reflected in advance
bookings. The cuts will translate into an 11%
reduction in capacity from the preceding 12
months, it said.
“It’s going to get worse,” said Shukor Yusof,
an aviation analyst with Standard and Poor’s.
“It is likely that layoffs will come next.”
Chew said job cuts would be only a last re-
sort, but the airline management had met with
the leaders of its labour unions about plans to
cushion the impact of the downturn.
This includes asking staff for voluntary
unpaid leave, early retirement, shorter work
months and accelerated clearance of leaves.
SIA’s latest announcement came just two
days after it said it will indefinitely suspend its
thrice-weekly service to Vancouver from April
25 due to poor passenger demand.
Chew said unlike airlines of bigger countries,
SIA does not have a domestic operation to soften
the impact of the slump in international traffic,
so the management must act decisively. – AFP