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Airline cancels flights to check engines

In the wake of an in-flight engine failure that killed a Southwest Airlines passenger, the carrier has started ultrasonic engine inspections covering virtually its entire fleet of more than 700 planes.

The Dallas-based carrier canceled 40 flights over the weekend as it moved to conduct the inspections of the fan blades on all of its CFM56 engines over the next 30 days, exceeding the requirement of a Federal Aviation Administration order last week.

The accident took place when an engine fan blade fractured, sending shrapnel into the fuselage, killing Jennifer Riordan, a bank executive and mother of two from New Mexico. The flight from New York to Dallas made an emergency landing in Philadelphia.

The FAA and CFM International, the manufacturer of the CFM56 engines, both called on Friday for ultrasonic inspections within 20 days of engines with at least 30,000 cycles -- or takeoffs and landings. The FAA said its order would apply to 352 engines on planes flown in the U.S. and 681 engines flown worldwide by various carriers.

Southwest said it will inspect all of the roughly 700 Boeing 737-700 and 737-800 model Southwest planes that are installed with CFM56 engines. Only about a dozen planes in the Southwest fleet will not need to be inspected because they don't use CFM engines.

-- Los Angeles Times

Rates on short-term Treasury bills climb

WASHINGTON -- Interest rates on short-term Treasury bills rose in Monday's auction to their highest levels in more than nine years.

The Treasury Department auctioned $48 billion in three-month bills at a discount rate of 1.830 percent, up from 1.760 percent last week. Another $42 billion in six-month bills was auctioned at a discount rate of 1.985 percent, up from 1.945 percent last week.

A recent spike in commodity prices has lifted inflation expectations, and with them the interest rates on Treasury securities. The yield on the benchmark 10-year Treasury note on Monday reached its highest level since January 2014, rising to 2.99 percent. The 10-year rate is tied to auto loans, mortgages and other credit, and breaching the key 3 percent level could send financial shock waves.

The three-month rate at Monday's auction was the highest since those bills averaged 1.850 percent on Aug. 18, 2008, shortly before the onset of the financial crisis. The six-month rate was the highest since those bills averaged 2.020 percent on Aug. 11, 2008.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,953.74 while a six-month bill sold for $9,899.65. That would equal an annualized rate of 1.864 percent for the three-month bills and 2.033 percent for the six-month bills.

-- The Associated Press

Texas to waive $1.3B in toll-road fines

AUSTIN, Texas -- The Texas Department of Transportation will forgive more than $1.3 billion in late fines and fees owed by drivers on state toll roads since 2007.

The department announced the decision last week at a House Transportation Committee meeting in response to a cap on unpaid toll fees lawmakers imposed last year, the Austin American-Statesman reported.

The move covers only tolls incurred on roads operated by the Transportation Department, such as Texas 130 and Texas 45 North. The decision doesn't affect tolls, fines or fees racked up on tollways operated by the Central Texas Regional Mobility Authority or other local toll agencies.

The new law took effect last month and limits administrative fees on state-operated tollways to $6, with an annual maximum of $48. The department will charge $4 a month for unpaid tolls. Texas didn't have such a cap before, so the department's fines could quickly amount to $25 per unpaid toll or more when cases were referred to a collection agency or a court. Some drivers saw debts up to tens of thousands of dollars.

-- The Associated Press

CenterPoint to buy Vectren in $6B deal

NEW YORK -- CenterPoint Energy Inc. is paying just under $6 billion for rival Vectren in a move that will expand the utility operator's reach.

The combined company will serve more than 7 million gas and electricity customers in eight states and will hold about $29 billion in assets. CenterPoint will pay $72 per share cash for Vectren and assume the company's debt.

Houston-based CenterPoint has natural gas operations in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma and Texas. It delivers electricity in the Houston area. It currently employs nearly 8,000 people. Evansville, Ind.-based Vectren Corp. provides natural gas in Indiana and Ohio, along with electricity in Indiana. It employs about 5,500 people.

--The Associated Press

Lampert floats buying Sears’ Kenmore

Edward Lampert is pushing for a more aggressive breakup of Sears Holdings Corp. as the hedge-fund manager aims to salvage what's left of the struggling retailer and stave off a potential bankruptcy filing.

The announcement sparked a 7.6 percent share jump to $3.24 on Monday.

Lampert's hedge fund, ESL Investments Inc., said selling the appliance-maker Kenmore, home-improvement services and an appliance part-replacement business would improve the debt profile and liquidity of the struggling retailer, according to a statement from Sears. ESL would also be interested in making an offer for real estate -- if requested by the retailer's board. Lampert's fund could then lease some or all of the stores back to the company.

Lampert has been using his own money for years to keep Sears afloat as its store traffic and sales fall. The 125-year-old retailer, based in Hoffman Estates, Ill., has relied on asset sales and infusions from the hedge-fund manager to offset billions of dollars in losses. It's also closed hundreds of stores and cut more than $1 billion in expenses.

-- Bloomberg News

Business on 04/24/2018

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