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Economy Briefs: High air fares expected for most of this decade

- - Thursday, March 8, 2012

FAA

High air fares expected for most of this decade

Air fares are expected to remain high for most of this decade, according to a government forecast.

The Federal Aviation Administration said Thursday it expects airline traffic to double while capacity shrinks. In its annual economic analysis, the FAA predicted travelers won't get much relief until airlines start getting more competition, which is years off.

Airlines are expected to keep planes flying as full as possible, matching consumer demand to available seats.

In the near term, more airline mergers and consolidation will reduce the number of cities served as well as the number of flights in the nation's air travel network.

The agency forecasts the number of miles flown by passengers to increase, from 815 billion in 2011 to 1.57 trillion in 2032.

NEW YORK

McDonald's revenue figure falls short of expectations

NEW YORK | McDonald's Corp. said Thursday that a key revenue figure came in short of expectations in February as severe weather in parts of Europe and the timing of the Chinese New Year hurt its performance.

The world's biggest hamburger chain also noted that it's navigating an environment of "persistent economic uncertainty, austerity measures in Europe, and commodity and labor cost pressures, particularly in the U.S."

The Oak Brook, Ill.-based company said the challenges are expected to hurt its first quarter operating income growth.

For February, the company said global revenue in restaurants open at least 13 months rose by 7.5 percent, driven by an extra day in the leap year and strong results in the United States.

But that still fell short of the 7.7 percent increase analysts on average were expecting, according to a poll by Thomson Reuters.

Shares of McDonald's fell $3.30, or 3.3 percent, to $96.88 in morning trading. They had surged to $102.22 on Jan. 20 but are up 33 percent from their low of $72.89 almost a year ago.

McDonald's said its strongest performance last month came from the U.S., where new menu items such as the Chicken McBites and breakfast staples helped increase the revenue figure by 11.1 percent.

NEW YORK

Plan to build $600M gambling resort back on

THOMPSON | Plans to develop a $600 million resort with gambling on the site of the grandest old Borscht Belt hotel are being revived.

The proposal to be unveiled Thursday night at a public meeting will include a large hotel, a harness track and video lottery terminals on the former site of the Concord Hotel, famed from the days when the Catskills were a prime summer destination for Jewish families.

The Monticello Raceway, with its video lottery terminals, would move from its current location several miles away to become part of the resort.

Plans for a mega-resort at the site date back several years. A Westchester County developer's plan stalled during the recession. Now, Entertainment Properties Trust, which owns the land, is working with the race track operator.

NEW YORK

Wells Fargo to charge $7 fee for checking

NEW YORK | Wells Fargo customers in six states who had free checking accounts will pay $7 a month starting in May.

Those customers can avoid the fee by keeping a minimum balance of $1,500 or making direct deposits of at least $500 a month. They can also get a $2 break on the fee by opting for online statements.

The bank says it started moving customers in California and other western states to the $7 fee last year and is expanding to six more states. A bank spokeswoman couldn't immediately give the six states Thursday.

Wells Fargo says it hasn't offered free checking to new customers since 2010.

Banks have been adding and experimenting with fees. They say they need to make up lost revenue, partly because of regulatory changes.

• From wire dispatches and staff reports