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Change in the air

Business | Airbus's new double-decker A380 is billed as the world's largest passenger jet

Issue: "Johnny Carson: In memoriam," Feb. 5, 2005

While many major airlines struggle to survive, the world's largest aircraft manufacturers are busy debating which type of planes will fly tomorrow's passengers and cargo.

France's Airbus recently unveiled the world's largest passenger jet, the double-decker A380 "superjumbo," capable of seating as many as 800 passengers. The company spent more than $13 billion to develop the plane, which has a list price of $280 million and is scheduled for its first commercial flight in 2006.

However, the plane is so large that it can only take off and land at the world's largest airports and it's unlikely that most commercial airports could afford to upgrade their airstrips to accommodate the superjumbo.

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That's one reason why Boeing officials, who saw their sales dip below Airbus for the second straight year, believe the industry is headed toward smaller passenger planes. Boeing has introduced the new 7E7 Dreamliner, which seats a maximum of 289 people and is set to debut in 2008.

Airbus, though, says it already has nearly 150 orders for the A380, including orders from both FedEx and United Parcel Service, hoping to take advantage of larger cargo loads. If demand continues, industry executives say Boeing would be hard-pressed to keep pace because it would take the company 10 years to develop its own superjumbo.

Turnover at the top

Doesn't it seem like there's a new story every day about a CEO resigning from a major corporation? Actually, it's more often than that.

According to a survey by the outplacement firm Challenger Gray and Christmas, there were 56 CEO departures in December, a record and up from 46 in November. And more recently, CEOs at Charter Communications, Krispy Kreme Doughnuts, and Agilent Technologies have announced they're leaving.

Charter CEO Carl Vogel resigned with the cable television company struggling to overcome $18 billion of debt. In addition, three former Charter executives have pleaded guilty to charges arising from a scheme to defraud investors by inflating subscriber numbers.

At Krispy Kreme, where share prices have dropped from more than $50 per share to less than $9 in the past year and a half, the board of directors ousted Scott Livengood, who oversaw the company's meteoric rise into a national chain.

And Agilent CEO Edward "Ned" Barnholt resigned last week after leading the high-tech manufacturer's return to profitability. Mr. Barnholt laid off thousands of workers to overcome losses of more than $3 billion during 2002 and 2003. Agilent posted a $349 million profit in its latest fiscal year.

Balance Sheet

· Morgan Stanley will pay $19 million to the New York Stock Exchange to cover the company's lapses in issuing prospectuses, as well as two cases of employee embezzlement and fraud that totaled $61.4 million.

· Kraft Foods, the nation's largest food manufacturer, plans to trim advertising of products like Oreos and Kool-Aid toward children because these products don't meet the company's new nutrition criteria.

· For the second time in two months, OfficeMax is looking for a new chief financial officer. Brian Anderson quit the job with the office-supply company amid continuing turmoil, including poor holiday sales and internal accounting errors.

· Nearly 40 percent of full-time workers in a recent online survey said they would prefer more time off instead of a $5,000 annual pay hike. In 2002, just 20 percent of workers chose more time off.

· With its new Wal-Mart Discover Card, Discover Financial Services is teaming up with the nation's largest retailer in its continuing effort to challenge Visa and MasterCard's dominance of the credit-card industry.

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