Business in brief: Report says airlines in merger talks

Minneapolis – United Airlines and US Airways are in talks about combining into what would be the nation’s second-biggest airline, a person with knowledge of the situation told the Associated Press on Wednesday.

The person, who insisted on anonymity because of the sensitive nature of the talks, said the talks appeared to be getting more serious.

This person said a deal would be modeled on the Delta-Northwest combination, which was a stock swap without a cash component.

Associated Press

Consumers are still debt-shy

Washington – Consumer borrowing fell in February, reflecting weakness in credit cards and auto loans. Analysts said the sharp reduction showed that the weak economy is still making consumers hesitant to take on more debt.

The Federal Reserve said Wednesday that borrowing declined by $11.5 billion in February, surprisingly weaker than the small $500 million gain that economists had expected. The February decline was the 12th decrease in the past 13 months as consumers slash borrowing in the face of a deep economic recession and high unemployment.

Associated Press

SEC proposes securities rules

Washington – Federal regulators proposed new, stricter rules Wednesday for asset-backed securities, the bundles of loans that helped spark the market’s collapse in 2008 and nearly brought down the financial system.

The Securities and Exchange Commission voted 5-0 to propose that Wall Street firms that package and sell asset-backed securities be required in most cases to hold at least 5 percent of the packaged loans – mortgages, credit cards, auto loans – on their own books.

With some “skin in the game,” the thinking goes, the firms would be more careful to ensure that borrowers are properly screened.

The SEC’s proposed rules could be formally adopted sometime after a 90-day public comment period, possibly with changes.

Associated Press

Boeing says 787 passed tests

Everett, Wash. – Boeing Co. said Wednesday that the stress tests for its new 787 jetliner’s wing and fuselage went as planned.

On March 28, workers at Boeing’s Everett plant bent the wing of a special test 787 by 150 percent of the most extreme forces it would experience in flight – about 25 feet upward at the wing tip. They also pressurized the fuselage to 150 percent of its maximum normal operating condition.

The head of the 787 program, Scott Fancher, said in a news release Wednesday that a thorough analysis of the results showed the aircraft performed as designed.

Associated Press