NATIONAL

US AIRWAYS TO REARRANGE FLIGHTS TO BOOST CAPACITY

US Airways Group Inc. plans to rearrange some of its hub operations in a way that adds 230 more daily flights without adding more airplanes.

The idea is to increase capacity in February by using airplanes and airport gates more efficiently, particularly the gates that bankrupt US Airways uses at some of the country’s most popular or restricted airports.

The changes come at a time when US Airways faces the possibility of insolvency, and already competitors are considering how to divvy up the spoils. Southwest Airlines Co. executives have said they would love to get their hands on US Airways’ Philadelphia gates. And a number of executives with other airlines have been eyeing gates at other East Coast airports, which US Airways’ operational changes also address.

Still, US Airways’ plans to boost capacity run counter to complaints from executives across the industry that overcapacity is keeping fares too low for some airlines to make money. Southwest Airlines turned a stronger-than-expected profit in the third quarter, but US Airways, along with the other major network carriers, is expected to remain in the red.

“With our February schedule, we will lay the groundwork for a complete overhaul of the US Airways business model, a design that uniquely combines the best business practices of both legacy and low-cost carriers,” said US Airways’ head of marketing and planning, Ben Baldanza, in a statement.

– Dow Jones Newswires

JUDGE DENIES EBBERS’S BID TO MOVE TRIAL TO MISSISSIPPI

A federal judge in Manhattan yesterday denied a motion by Worldcom Inc.’s former chief executive, Bernard J. Ebbers, to move his criminal fraud trial to Mississippi from New York.

In an order issued yesterday, U.S. District Judge Barbara Jones said that Mr. Ebbers failed to justify the need for a venue change despite his arguments that it would be an inconvenience for him and some witnesses expected to testify at the trial. Mr. Ebbers lives in Mississippi where WorldCom had its headquarters.

“It is the government who bears the burden of proof…It is the government that must organize and present the majority of the evidence and witnesses at trial,” Judge Jones said in her ruling. “It would impose an enormous burden on the government to move the prosecutors, investigators, support staff, court staff, and others familiar with the case, along with the evidence and voluminous documents, to another jurisdiction.”

Mr. Ebbers has been charged with conspiracy, securities fraud, and making false regulatory filings in connection with an $11 billion accounting fraud at the company, the largest in U.S. history. If convicted of committing securities fraud or making false statements, Mr. Ebbers faces up to 10 years in prison. He has denied wrongdoing.

WorldCom is now called MCI Inc. A pretrial conference is scheduled for today. Mr. Ebbers’s trial is scheduled to begin November 9.

– Dow Jones Newswires

LEVI STRAUSS WON’T SELL ITS DOCKERS KHAKIS BUSINESS

Levi Strauss & Co., the closely held maker of denim jeans, is keeping its Dockers line after a five month search for a buyer failed to generate any “appropriate” offers for the khaki-slacks business.

While a “high level of interest” was expressed in Dockers, Levi determined it would benefit more from building the brand than selling it, the chief executive, Phil Marineau, said in a statement.

The decision to keep Dockers also was motivated by Levi’s improved financial condition, including cutting debt by $100 million in the first nine months of the year, the company said. Levi said in May it wanted to sell Dockers to focus on Levi’s Red Tab and Levi Strauss Signature jeans and to trim debt by at least 30%. Sales of Dockers totaled about $1 billion last year.

Demand for Dockers clothing has picked up this year, Levi has said, after it introduced items such as the ProStyle collection, which has wrinkle-prevention and stain-resistance features.

Levi, which received an American patent in 1873 for adding reinforcing rivets to denim pants, releases financial information because its debt is registered with the Securities and Exchange Commission.

The company said it has sufficient liquidity and will be in compliance with all of its debt covenants. It had net debt of $2 billion as of August 29.

The company had planned to sell Dockers to New York-based buyout firm Vestar Capital Partners for about $800 million, the New York Post reported last month, citing unidentified sources. The newspaper said last week their talks broke off after the two parties failed to agree on a price.

– Bloomberg News

PHARMACEUTICALS

FDA PLANS PANEL HEARING ON PFIZER’S CELEBREX, BEXTRA PAIN DRUGS

The Food and Drug Administration plans to meet with outside medical advisers as early as January to discuss any questions about the safety of Pfizer Inc.’s painkillers Celebrex and Bextra.

The agency is looking more closely at drugs in the same class as Vioxx, a Cox-2 medicine, after Merck & Co. voluntarily withdrew it because of a heart risk. The recall last month was the largest for an American-approved drug.

So far, studies of Celebrex and Bextra pills, which are Cox-2 painkillers, don’t raise any concerns, the FDA said. The agency is collecting information and evaluating more recent studies. The FDA said it wants advice from the panel on how to best monitor safety of the drugs, which are already widely used, and will also ask for suggestions on research that should be conducted.

“It would certainly behoove the companies to learn from Vioxx and do the trials they need, at least 18 months, to get the appropriate information that the public will demand,” Crystal Rice, a spokeswoman for the FDA said in an e-mailed response. “This is where, again, we need help from the advisory committee to give us input.”

New York-based Pfizer yesterday announced plans for a 4,000-patient study measuring whether Celebrex improves heart health among arthritis patients who already have had an attack. The company said it would review the study with the FDA before it starts.

– Bloomberg News

INTERNATIONAL

AMERICA APPEALS WTO COTTON RULING

The Bush administration appealed a World Trade Organization decision that last month found $3 billion in American cotton aid violates global trade rules, an American official at the mission to the WTO and a WTO spokeswoman said.

Should the Geneva-based WTO uphold its initial finding in favor of Brazil, the case would force American to change its farm-payment laws and may push some cotton farmers, who produced $5.6 billion of the fiber in 2003, into planting other crops. The two officials declined to be identified by name.

The dispute was the first targeting domestic farm payments and the appeal may delay any requirement for America to comply with the ruling until the second half of 2005. It was followed by a complaint against European Union sugar exports, which Brazil, Australia and Thailand successfully argued illegally benefit from production programs.

The WTO ruled that aid to 35,000 American cotton farmers overshoots payment caps America accepted a decade ago. Brazil argued that the legal protection for subsidies, known as the Peace Clause, had expired and wouldn’t apply because American payments are higher than those paid in 1992, the reference year.

– Bloomberg News

TELECOMMUNICATIONS

MCI TO WRITE DOWN ASSET VALUES BY $3.5 BILLION

MCI Inc., the second largest American long-distance telephone company, will write down its assets by $3.5 billion in the third quarter, reflecting their reduced value as calling prices tumble and demand declines.

MCI’s $10.9 billion of property, plant and equipment, and non-network assets will be sliced by a third. The value of MCI’s brand will be cut by $260 million and network assets will be reduced by about $3.25 billion, Ashburn, Virginia-based MCI said in a statement.

Increasing competition and an American decision to raise the price of offering local-phone service reduced the value of the assets. MCI said. AT &T Corp., the no. 1 seller of long-distance service, this month said it would slice the value of its assets by $11.4 billion because of the ruling. The two companies are retreating from the residential market.

The write-down will reduce depreciation and amortization costs by about $220 million in the second half, MCI said.

A U.S. federal appeals court in March struck down regulations that enabled MCI, AT&T, and Sprint Corp., another long-distance operator, to rent the networks of local-phone companies including Verizon Communications Inc. at below-market rates. Sprint said last week that it would also write down its long- distance assets. The company said it will be more specific about the charge when it reports results today.

– Bloomberg News