Business and Finance

A five-hour computer outage that virtually shut down United Airlines Friday night and early Saturday is a stark reminder of how dependent airlines have become on technology.

Passengers saw their flight information vanish from airport screens, and thousands were stranded as United canceled 36 flights and delayed 100 worldwide.

The airline still had no explanation Saturday afternoon for the outage. But things could have been much worse.

A blizzard in the Northeast wiped out more than 10,000 flights over three days in December, a mid-January storm led airlines to cancel nearly 9,000 flights.

Friday’s shutdown occurred late enough in the day that many of the canceled flights were the last planes out for the day, said Henry Harteveldt, an airline analyst with Forrester Research. On a Monday morning, the results could have been catastrophic.

“It happened as a lot of the airline was going to sleep for the night,” Harteveldt said.

That doesn’t mean affected travelers were happy.

“I’m just amazed at how catastrophic the failure was,” said Jason Huggins, 35, who was trying to fly home to Chicago after a week working at his software company’s San Francisco headquarters. “All the computer screens were blank, just showing the United logo.”

Huggins paid $1,200 to book one of the last three seats left on an American Airlines flight home.

Social workers Penny Nordstrom, 57, and Emily Schaefer, 42, who were trying to get home from Cancun, Mexico, to Spirit Lake, Iowa, said their delays started with a computer problem at midday Friday in Mexico.

“We’re way past 24 hours now,” Nordstrom said about noon Saturday before she boarded a rebooked flight from Chicago O’Hare International Airport to Detroit for a connection to Sioux Falls. She expected to get home about midnight but hoped her travel insurance would offer some compensation.

United spokesman Charles Hobart said late Saturday afternoon that the airline didn’t expect to cancel any more flights this weekend due to the computer problems, though delays might continue.

Business travelers are usually hurt less by such disruptions than people flying for vacation or personal reasons because airlines first help passengers with elite status in frequent flier programs and those who bought more-expensive, unrestricted tickets.

Jon Ryan, who had planned to fly nonstop from San Francisco to London on business Friday evening, was rebooked on partner airline Air Canada after two hours on the phone. His new itinerary: San Francisco to Toronto to Halifax to London.

“The poor, poor ticket agents were just bewildered and sitting behind the counter. Everybody was just staring and didn’t know what to do,” Ryan said. “The line grew and grew and then people went from sitting down to lying down.”

On a typical day, United, a subsidiary of United Continental Holdings Inc., cancels 15 to 30 flights for reasons ranging from fog to maintenance problems or staffing shortages. Those are understandable. Passengers and others said a computer glitch should not have grounded the airline.

“They’re infrequent, but the fact that they happen at all is puzzling. These are mission-critical,” said airline analyst Robert Mann cheapest personal loan rates. “The idea that they would fail is troubling.”

College student Jamela Wilson, on her way from Los Angeles home to Roanoke, Va., was curled inside of her hoodie sweatshirt at a gate in Chicago Saturday after an overnight wait.

“I don’t know what happened, but it shouldn’t have impacted me to the point I’m not home right now. It’s a good 12 hours later,” Wilson said.

Mary Clark, a United spokeswoman, said she couldn’t say how many passengers were delayed or how many still needed to reach their destination by midday Saturday. About the outage itself, she and other airline personnel said only that it was caused by “a network connectivity issue.”

Airlines rely on computers today more than ever. Reservations and customer service are largely automated, even flight paths are increasingly computer-generated. Most passengers are asked to check-in online, at airport kiosks or via mobile phone _ not with an agent _ and paper tickets are a thing of the past.

Airplanes also are flying fuller this summer than ever before. United’s were 86.8 percent booked on average in May, which in reality meant many flew without a single empty seat. So rebooking passengers from canceled flights is much trickier and more time-consuming than in the past.

United and Continental merged in May 2010. They are slowly integrating their systems but still operate independently. So Continental was able to dispatch flights normally, though some of its airport kiosks were affected.

Naveena and Vidya Maddali’s Continental flight from Seattle into O’Hare arrived on time at 5:30 a.m. Saturday. But their connecting United flight to Saginaw, Mich., was delayed repeatedly and then canceled. With the earliest flight at 1 p.m., the software engineers were fairly sure they would miss the noon high school graduation party they were traveling to attend.

“The whole purpose of the trip got ruined because of the delays,” said Naveena Maddali, 27.

The couple was particularly frustrated United didn’t provide more information sooner because they initially had enough time to rent a car to finish their trip.

Dave Sertich, 29, a financial analyst who lives in San Francisco, slept in a chair at an O’Hare gate Friday night but said many people had it worse. He was just puzzled by the lack of information from the airline.

“There were no agents around, no communication to passengers about what was going on, no announcements,” Sertich said.

United passengers flying the rest of the weekend have been advised to print out their boarding pass at home instead of at airport kiosks in case of continuing backlogs. By 3 a.m. Eastern time, United had announced on Twitter that things were returning to normal: “Flight status and flight rebooking are fully refreshed on united.com. Thanks again for your patience.” Officials did not elaborate.

The airline’s customer service line at O’Hare was only four passengers long by noon, and United was letting people with tickets for travel Saturday change them for free to alleviate the crunch.

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Japan’s economic contraction in the first quarter was slightly milder than initial estimates, the government said Thursday.

Real gross domestic product shrank at an annualized rate of 3.5 percent in the January-March period, compared with 3.7 percent in the Cabinet Office’s preliminary report last month.

But the upgrade doesn’t change the fact that the world’s No. 3 economy fell back into recession in the January-March quarter. The reading marks the second straight quarter that GDP _ a measure of the value of all goods and services produced domestically _ retreated.

Factory production and consumer spending tumbled in the aftermath of the March 11 earthquake and tsunami.

The disasters left more than 23,000 people dead or missing, and wiped out entire towns in the hardest-hit areas. Damage is estimated at $300 billion, making it the most expensive natural disaster in history low rates payday advance.

Factories throughout the region were damaged, leading to serious shortages of parts and components for automakers and other manufacturers. A crippled nuclear power plant caused widespread power shortages that added to the headaches faced by businesses and households.

The International Monetary Fund on Wednesday slashed its outlook for Japan as a result, predicting that the economy will shrink 0.7 percent this year instead of growing 1.4 percent.

Japan, however, should recover “sharply” over the summer as rebuilding progresses and supply constraints ease, the IMF said. It expects GDP to expand 2.9 percent in 2012.

The government’s latest GDP figure translates to an unchanged 0.9 percent fall from the previous three-month period.

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JEFFERSON CITY

The Southern California megachurch founded by one of the nation’s pioneering televangelists, the Rev. Robert H. Schuller, on Friday filed a bankruptcy plan that would pull the Crystal Cathedral out of crushing debt by selling its sprawling campus and famous, glass-spired sanctuary to a local real estate investment group for $47 million.

The church would lease back most of its core buildings under the plan, which must be approved by a bankruptcy judge, so worshippers and visitors won’t notice any changes in services or outreach. The church’s popular, decades-old televangelist program “Hour of Power” broadcasts would also continue, the church said.

The plan would allow the ministry to lease the church buildings back for a guaranteed 15-year period, with the additional option of buying the core campus back at a fixed price within four years, said Marc Winthrop, the church’s bankruptcy attorney.

The deal would erase the cathedral’s $36 million mortgage and wipe out almost all of the $10 million in unsecured debt _ including $7.5 million owed to vendors _ that has plagued the Crystal Cathedral for several years after a disastrous leadership transition and a devastating slump in donations.

The ministry must be out of the Family Life Center, which houses administrative offices and a private school, within two years, the attorney said.

“The ministry is going to continue in the same place, in the same buildings,” said Winthrop said. “It’s just that we had to go through a financing transition to get rid of the debt.”

A court hearing is set for July 13.

The plan specifies that the ministry will sell the property to the Orange County-based real estate investment firm Greenlaw Partners LLC, according to disclosures filed with the bankruptcy court. The property will be divided into up to five parcels and multi-family housing will be built on two parcels, with a parking lot on a third parcel.

The buyer has agreed to pay $46 million with an additional $900,000 set aside in escrow, according to court papers.

The charismatic Schuller got his start in Southern California preaching about the “power of positive thinking” from the roof of a concession stand at a drive-in theater as the car culture began to boom in the post-World War II era. He was considered a theological radical at the time, but people were soon driving from all over the Los Angeles area to sit in their cars and listen to Schuller preach through the movie loudspeakers that hooked to their windows.

Schuller, now 84, soon turned his humble pulpit into one of the nation’s first megachurches, beaming his weekly Sunday service into 1 million homes worldwide through the “Hour of Power” TV show, which went on the air in 1970. Schuller became a familiar presence on television, a smiling figure in flowing robes, with snowy white hair and wire-rimmed aviator glasses.

In 1980, he opened the Crystal Cathedral, a 2,900-seat see-through church made of 10,664 panes of glass. A $20 million architectural marvel designed by the acclaimed Philip Johnson, it became a major Southern California landmark and a tourist attraction that drew people from all over the world. Schuller soon added a K-12 school and a tourist center.

But his religious empire began to collapse after a disastrous attempt in 2006 to hand over the leadership to his son, Robert A cash advance. Schuller.

The much-heralded changeover alienated older “Hour of Power” viewers and ended in a bitter and very public family spat, with the younger Schuller disappearing from the broadcasts and abruptly leaving the church altogether in 2008, less than three years after he assumed his father’s mantle. The elder Schuller’s daughter, Sheila Schuller Coleman, was eventually named senior pastor, a position she continues to hold.

A plummeting economy also took its toll, and viewer donations declined by as much as 24 percent in 2009, the year before the church declared bankruptcy. Its local congregation now stands at fewer than 5,000 people, although new Spanish-language and Arabic-language services draw about 2,000 and 400 worshippers respectively.

The church laid off 250 of its roughly 450 employees, sold its beloved retreat center, cut salaries and canceled contracts with more than 100 TV stations nationwide. It also canceled its world-famous Christmas and Easter pageants and racked up unpaid bills to 550 creditors, including vendors who provided live animals, costumes and other props and services for the epic holiday shows.

A week after declaring bankruptcy, the elder Schuller went on the “Hour of Power” with an emotional plea to viewers to donate more to help his ministry survive.

“If you are a tither, become a double-tither. If you are not a tither, become a tither,” he said at the time. “This ministry has earned your trust. This ministry has earned your help.”

Schuller Coleman said in a statement posted on the church’s website that the church had picked this restructuring plan from among several because it allowed vendors to be repaid immediately and put the church on solid financial footing to pursue a new vision, including global outreach to the poor.

“We need to rise up and be the hands of Christ to help a hurting world one neighborhood at a time. Reaching future generations with the positive message of Jesus Christ requires an outreach of love,” she said in the statement. “I’m excited about what God is doing now and will be doing in the future through the Crystal Cathedral

On Friday, worshippers and tourists at the church’s Garden Grove campus said they were cautiously optimistic and continued to support the cathedral and its new vision.

“It sounds to me like it’s a good thing,” said Mike Amaneck, who has attended church at the cathedral every Sunday for 13 years. “It’s a wonderful positive place and I was really inspired by the news … because it’s better for the church to go through this to be in a position where they’ll come out stronger _ and they will come out stronger, there’s no doubt about it.

As Amaneck spoke, tourists from as far away as Germany wandered the 40-acre grounds in the sunshine, snapping pictures and lingering outside the sanctuary, where a private funeral was being held.

“I think the news today is an opportunity of hope,” said Amaneck’s wife, Sarah. “There are times in life when things look kind of dark and gloomy, but God will have the last word.”

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COLUMBIA, Mo.

Wages in New Zealand rose in the first quarter at the slowest pace in nine months, signaling an easing of inflation pressures before a February earthquake disrupted hiring and hurt growth.

Wages for non-governmental workers excluding overtime increased 0.4 percent from the fourth quarter when they gained 0.6 percent, Statistics New Zealand’s labor cost index released in Wellington today showed. The median forecast in a Bloomberg News survey of five analysts was for a 0.6 percent advance.

Wage gains have been limited in the past two years with a jobless rate near an 11-year high, while economic growth was slowed by an earthquake Feb. 22 in Christchurch that killed more than 170 people. Central bank Governor Alan Bollard last week kept the official cash rate at a record-low 2.5 percent and said the level was appropriate “for some time” given the outlook for core inflation.

“The Reserve Bank will remain comfortable that temporarily higher headline consumer-price inflation will not spill into higher wages,” said Mark Smith, an economist at ANZ National Bank Ltd. in Wellington. “We are unlikely to see a broad-based pick up in wage growth until later this year.”

Currency Reaction

New Zealand’s dollar was little changed after the report. It bought 80.40 U.S. cents at 12:16 p.m. in Wellington from 80.60 cents immediately before the release.

The postal survey was based on wages prior to the temblor, the statistics agency said. The response rate from Christchurch was lower than usual, it said.

Annual wage growth accelerated to 2 percent from 1.9 percent in the year through December, today’s report showed. The central bank forecast wages to rise 2.2 percent for the year through March.

Consumer prices rose 4 cash advance flexible payments.5 percent in the year ended March 31 buoyed by a sales tax increase in October. Excluding the higher tax, inflation was 2.6 percent in the year and much of that reflected food and fuel price rises, according to a government report on April 18.

Economic growth may be as slow as 1 percent in 2011, the Treasury Department said in a report yesterday. Twelve of 17 economists surveyed by Bloomberg predicted the cash rate will be unchanged until 2012. Four forecast the first increase in the fourth quarter and one expected a third-quarter move.

The jobless rate probably fell to 6.7 percent in the first quarter from 6.8 percent in the final three months of 2010, according to a Bloomberg survey of nine economists ahead of a May 5 government report. The rate reached a 10-year high of 7 percent in late 2009.

Hourly Earnings

Average ordinary-time hourly earnings for non-governmental workers rose 0.3 percent in the quarter, the statistics agency said in its quarterly employment survey, also published today.

Demand for labor was steady in the first quarter, the survey also showed. The number of full-time equivalent employees rose 0.3 percent from the fourth quarter as full-time work in manufacturing and construction increased, while part-time jobs declined, led by retailing and hospitality.

Filled jobs fell 0.7 percent from the fourth quarter, led by a seasonal drop in education positions, the statistics agency said. Filled jobs dropped 0.2 percent from the year-earlier quarter.

Total weekly paid hours rose 0.7 percent from the fourth quarter, the report showed.

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NEW YORK, N.Y. - Standard & Poor

David Farr, chairman and chief executive of Emerson, on Wednesday called for citizens to volunteer in order to make St. Louis a better place.

Farr made his remarks at a ceremony honoring him as Citizen of the Year for 2010. The award, bestowed by a committee of previous winners, is sponsored by the Post-Dispatch.

Craig Schnuck, whose family received the award for 2009, praised Farr as “a man of strong conviction, who is not afraid to speak up for what he believes.”

Schnuck, former CEO of his namesake supermarket chain, noted that Emerson last year gave $13.4 million to St. Louis area institutions and charities, including St. John’s Hospital, Tower Grove Park, boys and girls clubs and the St. Louis Zoo.

Farr credited his own success to advice given by his father, who told him to find a good company to work for, along with a talented and demanding boss.

Farr joined Emerson 30 years ago, and said he found those qualities in his first two bosses at Emerson.

“But it was my third boss that had the biggest impact on so many fronts

Jeff Bezos, chief executive of Amazon.com, should be a real folk hero for the anti-tax movement.

After Illinois Gov. Pat Quinn signed a law extending the long arm of sales-tax enforcement to part of the online retailer’s business, Amazon said it would cancel its affiliate relationships with Illinois-based companies. It did the same thing earlier to get around so-called “Amazon taxes” in Rhode Island and North Carolina, and it is suing New York over enforcement of a similar law.

When Texas sent a sales-tax bill for $269 million, the online giant said it would close a Dallas-area warehouse rather than pay small personal loans.

To brick-and-mortar retailers, the anti-tax stand looks more selfish than principled. Everyone from Wal-Mart to the corner store has to collect sales tax from customers and remit it to the state, but online-only sites like Amazon don’t.

Legally, both kinds of transactions are taxed the same. In Illinois, Missouri and most states, residents are supposed to pay a use tax

Service industries in February probably maintained a pickup in growth, adding to evidence the U.S. expansion has broadened beyond manufacturing, economists said before a report today.

The median forecast in a Bloomberg News survey for the Institute for Supply Management’s non-manufacturing gauge is 59.3 after a 59.4 reading in January that was the highest since 2005. Another report may show fewer than 400,000 workers filed claims for jobless benefits for the third time in four weeks.

A cut in payroll taxes came just in time to help Americans cope with the jump in gasoline prices, indicating companies like Union Pacific Corp. (UNP) will keep benefitting from increased spending. Federal Reserve Chairman Ben S. Bernanke this week signaled the central bank will forge ahead with plans aimed at holding down interest rates after reiterating he’s still not content with the strength of the recovery.

Also today, another report from the Labor Department at 8:30 a.m. may show that the productivity of American workers rose at a revised 2.4 percent annual pace in the final three months of 2010 from an initially reported 2 payday advance.6 percent, according to the median forecast.

Bloomberg Survey ============================================================== Initial Prod- Labor ISM Non- Claims uctivity Costs Manu ,000’s QOQ% QOQ% Index ============================================================== Date of Release 03/03 03/03 03/03 03/03 Observation Period 26-Feb 4Q 4Q F Feb. ————————————————————– Median 395 2.4% -0.5% 59.3 Average 395 2.4% -0.4% 59.3 High Forecast 405 2.8% 0.2% 62.0 Low Forecast 380 1.8% -0.9% 56.0 Number of Participants 46 59 49 73 Previous 391 2.6% -0.6% 59.4 ————————————————————– 4CAST Ltd. 400 2.3% -0.5% 58.5 ABN Amro Inc. 385 2.6% — 59.6 Action Economics 395 2.1% -0.9% 59.5 Aletti Gestielle 390 2.2% — 59.0 Ameriprise Financial 390 2.6% -0.6% 60.0 Banesto 395 2.6% — 59.6 Bank of Tokyo- Mitsubishi 404 2.8% -0.2% 60.2 Barclays Capital 395 2.7% -0.7% 60.5 Bayerische Landesbank — — — 59.5 BBVA 388 2.6% -0.6% 59.0 BMO Capital Markets 395 2.2% -0.2% 59.4 BNP Paribas 400 2.4% -0.6% 59.0 BofA Merrill Lynch 395 2.3% -0.5% 58.5 Briefing.com 400 2.4% -0.6% 60.0 Capital Economics — 2.4% -0.7% 58.5 CIBC World Markets — 2.6% — — Citi 400 2.1% -0.6% 58.0 Commerzbank AG 380 — — 61.0 Credit Agricole CIB — 2.2% -0.3% — Credit Suisse 385 — — 58.5 Daiwa Securities America — 2.0% — 58.5 Danske Bank — — — 59.2 DekaBank — 2.6% -0.6% 60.0 Deutsche Bank Securities 390 2.1% -0.2% 59.5 Deutsche Postbank AG — — — 60.0 Exane — 1.8% 0.2% 59.5 Fact & Opinion Economics 390 2.3% -0.3% 60.5 First Trust Advisors 388 2.8% -0.3% 59.8 Goldman, Sachs & Co. — 2.1% -0.3% 58.5 Helaba 395 — — 58.0 High Frequency Economics — 2.1% -0.1% 56.0 Horizon Investments — 2.4% -0.5% 59.8 Hugh Johnson Advisors — — — 59.0 Ibersecurities — 2.5% — — IDEAglobal 385 2.6% -0.5% 60.0 IHS Global Insight — 2.2% -0.4% 60.0 Informa Global Markets 405 2.3% -0.3% 57.4 ING Financial Markets — 2.6% -0.6% 60.2 Insight Economics 405 2.2% -0.3% 59.0 Intesa-SanPaulo — 2.6% — 59.6 J.P. Morgan Chase 400 2.1% -0.4% 59.0 Janney Montgomery Scott — 2.3% -0.6% 58.9 Jefferies & Co. 380 2.5% -0.5% 58.0 Landesbank Berlin 390 — — 58.0 Landesbank BW 396 — — 59.9 Maria Fiorini Ramirez 400 2.3% -0.3% 59.0 MF Global 395 2.6% -0.4% 60.0 Mizuho Securities 400 2.4% -0.7% 59.0 Moody’s Analytics 405 2.2% -0.4% 58.9 Morgan Stanley 390 2.2% -0.5% — National Bank Financial — — — 59.0 Natixis — — — 60.0 Newedge — — — 59.8 Nomura Securities Intl. — 2.2% — 57.8 Nord/LB 400 2.6% -0.6% 58.5 OSK Group/DMG — — — 58.6 Pierpont Securities LLC — — — 59.5 PineBridge Investments 385 2.3% — 57.5 PNC Bank — 2.2% -0.2% 59.0 Prestige Economics — — — 60.0 Raiffeisenbank International — 2.7% -0.7% — Raymond James 405 1.8% 0.0% 60.0 RBC Capital Markets 385 — — 58.7 RBS Securities Inc. 390 2.3% -0.5% 59.2 Scotia Capital 405 2.6% -0.6% 59.4 Societe Generale — — — 60.5 Standard Chartered — — — 59.0 State Street Global Markets 401 2.3% -0.3% 59.8 Stone & McCarthy Research 400 2.2% -0.3% 59.2 TD Securities 380 2.7% -0.6% 62.0 Thomson Reuters/IFR 395 2.8% -0.8% 59.3 UBS 400 2.8% -0.2% 61.0 UniCredit Research — — — 59.0 University of Maryland 400 2.6% -0.6% 60.0 Wells Fargo & Co. — 2.8% -0.5% 59.3 WestLB AG — 2.6% -0.6% 59.5 Westpac Banking Co. 400 2.6% — 58.0 Wrightson ICAP 395 2.3% -0.1% 60.0 ==============================================================

To contact the reporter on this story: Alex Kowalski in Washington at akowalski13@bloomberg.net

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