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Tuesday, November 21, 2006 - Page updated at 12:00 AM

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Business Digest

KAL orders 25 Boeing jets

Korean Air Lines (KAL), South Korea's biggest carrier, ordered 15 passenger jets and 10 freighters from Boeing in the airline's largest deal.

The firm order is worth $5.5 billion at list prices, though the price paid likely will be less than $3.2 billion, based on market estimates by aircraft valuation firm Avitas.

The Seoul-based carrier will receive the first planes in 2009, it said in an e-mailed statement today.

The Boeing passenger-plane order consists of 10 777-300ERs, four 737-900ERs and a 737-700. The airline also ordered five 747-8 freighters and five 777-200 freighters. The carrier has also agreed on options for eight more planes: four 777-300ERs, two 737-900ERs and two 747-8Fs.

South Korea's economic growth is boosting travel demand, and as the world's largest non-express cargo carrier, Korean Air also benefits from growing exports of tech goods such as microchips and cellphones.

Three-quarters of its current 118 planes are Boeing aircraft. The airline last ordered aircraft in April 2005, agreeing to buy 10 Boeing 787 aircraft for delivery from 2009.

The carrier also has agreed to buy five Airbus A380s, which it will begin flying in 2010, two years later than originally planned.

Microsoft

Alcatel files suits in patent disputes

Alcatel sued Microsoft, accusing the software maker of infringing patents for digital video and communication networks.

Alcatel, the world's largest supplier of broadband Internet equipment, filed two lawsuits Friday in federal court in Tyler, Texas.

The complaints don't spell out how Paris-based Alcatel believes Microsoft is infringing its patents. Alcatel said it is in licensing talks with Microsoft.

The suits were filed "to preserve Alcatel's rights to fair compensation for its intellectual property rights used by Microsoft," Alcatel said in an e-mailed statement. "Alcatel hopes that the matter can be resolved by further discussions rather than by the courts."

Microsoft also is involved in patent disputes with Lucent Technologies, which Alcatel is buying. Lucent has claimed Microsoft is using Lucent video-decoding technology in the Xbox 360 video-game system. Microsoft spokesman Guy Esnouf said in an e-mailed statement that the company is reviewing the suits.

Comcast

Company teams up with Amazon.com

Comcast, the biggest U.S. cable-television company, opened an online store through Amazon.com to win more customers for its high-speed Internet service.

Users who sign up through the online store will get a $100 gift certificate for purchases on Amazon and high-speed service for less than half the regular price for six months, Philadelphia-based Comcast said in a statement Monday.

Comcast aims to draw more customers by marketing itself through the world's largest Internet retailer, which has 61 million active customer accounts. Before this, the cable company sold its service through third parties on Amazon.

Boeing

Lockheed Martin, Sikorsky file protest

United Technologies' Sikorsky unit and Lockheed Martin are protesting a U.S. Air Force contract worth as much as $15 billion to buy search and rescue helicopters from Boeing.

Sikorsky, whose Pave Hawk aircraft was the incumbent on the order, filed a protest with the Government Accountability Office (GAO) on Saturday, company spokesman Edward Steadham said in an e-mailed statement Monday. Sikorsky wants to be sure its helicopter was "accurately evaluated," he said.

The Wall Street Journal reported online Monday that Lockheed had also filed a protest with the GAO, saying it believed the Air Force did not apply evaluation criteria consistently and that competitors were given different instructions in preparing their bids.

Boeing spokesman Dan Beck declined to comment.

Airbus

Company ramps up A320 production

Airbus plans to increase production of its A320 family of airliners, a company official said Monday, as the European aircraft maker bets on strong demand for its smaller planes to take the sting out of costly delays to its flagship A380 superjumbo.

Airbus spokesman Justin Dubon confirmed the plans, reported by The Wall Street Journal, which will see 32 of the single-aisle planes produced per month from January, instead of the 30 produced currently. Production will increase further to 34 planes per month in March 2008 and 36 by December that year.

Management approved the ramp-up at a meeting Friday, Dubon said. "The reason is that the backlog for A320 aircraft is so huge."

Before the increase was decided, the first delivery windows available to new customers were in 2010, Dubon said. Faster production will open new slots well before that date.

NAR

Home sales, prices drop in 3rd quarter

The feeble U.S. housing market showed more frailty when third-quarter home sales plummeted in 38 states, hitting Nevada, Arizona, Florida and California particularly hard, data released Monday showed.

The National Association of Realtors (NAR) reported Monday that sales retreated during the summer by 12.7 percent from the same period a year ago.

Home prices also dropped: The realtors' survey showed that the midpoint price for an existing home sold during the summer dipped 1.2 percent year over year to $224,900. Some 45 metropolitan areas saw home prices decline.

In the Seattle-Tacoma-Bellevue area, prices for single homes increased 14.6 percent from the third quarter 2005, the NAR reported, with a median price at $372,000. In Washington state, however, they dropped 11.6 percent from last year's third quarter.

And the latest report of building permits showed the slowest pace of annual growth in nine years in October. Housing construction slid sharply as builders tried to curb swelling inventories of unsold new and existing homes.

SEIU

Houston janitors "ecstatic" strike over

Houston janitors ended a monthlong strike Monday against the city's five major cleaning companies after reaching a tentative agreement that will guarantee higher wages, more work hours and medical benefits.

The settlement was hailed as a major victory for the 5,300 janitors who last year organized under the Service Employees International Union (SEIU). It is the first citywide union contract since janitors formed a union last November.

"We're very happy, and our members are ecstatic," SEIU spokeswoman Lynda Tran said. "It's an incredible, incredible day and this is a major victory."

Under Monday's agreement, the SEIU janitors will get a 50.5 percent pay raise over the two-year contract.

The deal was expected to be ratified at a union meeting later Monday, Tran said.

Dell

3rd-quarter results to be disclosed today

Dell, which delayed reporting profit last week because of an accounting probe, said it will announce preliminary third-quarter results today.

Results for the period ended Nov. 3 will be issued after the close of trading. No conference call is planned, the personal computer maker said Monday.

Dell said in August the U.S. Securities and Exchange Commission (SEC) has been investigating the company's revenue recognition and other reporting for a year.

The company said last week the issues involved were too complex to report results as scheduled on Nov. 16, and that the SEC had turned its review into a formal investigation.

U.S. Treasury

Paulson says review of markets needed

The Bush administration will review the regulations governing the operation of America's financial markets to make sure they don't harm this country's ability to compete in the global economy, Treasury Secretary Henry Paulson said Monday.

Paulson said the administration will convene a conference on capital markets and economic competitiveness early next year.

"Our capital markets remain strong and competitive, but they face some significant challenges that do not lend themselves to easy answers or quick fixes," he said in a speech to the Economic Club of New York.

Paulson said he did not believe new legislation was needed to change the 2002 Sarbanes-Oxley Act, but he said changes were needed in the enforcement of that law.

Compiled from The Associated Press , Bloomberg News and The Seattle Times business staff

Copyright © 2006 The Seattle Times Company

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