Southwest Airlines will add two flights to its Sea-Tac schedule this spring, the airline said today.

One of the those flights will connect Denver and Sea-Tac and another will cover the route from Sea-Tac to St. Louis. The new flights will begin in May.

Southwest is aggressively expanding in both cities to take advantage what it perceives as weakness among the incumbent airlines there.

In Denver, a bankrupt Frontier Airlines recently was acquired by Republic Airlines. In St. Louis, the dominant carrier, American, continues to shave down its flight schedule.

American once had a major hub at St. Louis which it acquired when it bought TWA. The carrier has steadily diminished St. Louis' importance while bolstering its existing hubs in Chicago and Dallas.

SeaTac's Alaska Air Group, despite reduced passenger traffic and lower fares, today announced profits with special items of $87.6 million in the third quarter.

That compares with a loss of $86.5 million in the same quarter in 2008.

This year's third quarter, traditionally the busiest quarter for the airline, was "one of the best quarters we've had in a very long time," Alaska Chairman Bill Ayer told analysts and reporters in a conference call.

Without the effects of special items such as fuel hedges, the company made $83 million in the quarter or $2.33 a share. Analysts polled by Zacks Research had predicted profits of $2.26 a share.

The company's turnaround was fueled literally by a huge difference in fuel prices between this year's third quarter and last's. During last year's third quarter, oil prices hit $147 a barrel. During this year's prices were half of that or less.

The airline holding company, parent of Alaska Airlines and Horizon Air, also reworked its schedule to cut capacity in weaker markets such as California, Arizona and Nevada and to expand to new markets such a additional islands in Hawaii, Houston and Austin. The airline begins flying from Sea-Tac to Atlanta Friday.

"Our work to reduce capacity to better match demand, redeploy aircraft to into promising new markets and achieve record operational reliability contributed to our best quarterly financial performance in many years," said Ayer.

While improving its profits, both Alaska and Horizon achieved better on-time performance. Alaska was the top on-time performer among major domestic airlines every month this year from April through September, and Horizon was near the top among smaller carriers.

New fees for checked baggage also contributed to the company's profit margin. Since the July 7 imposition of those fees, the airlines have received $23 million in new revenues without a noticeable diminishment in passenger market share to the only major airline that doesn't impose checked baggage fees, Southwest.

Alaska's profits came during a quarter when many of its large and small competitors were reporting losses or, at best, small profits.

Delta Air Lines, the world's largest carrier, reported third quarter losses of $161 million this week. American Airlines' parent, AMR, said its losses for the July through September period were $395 million.

Phoenix's US Airways lost $80 million in the same period. Continental Airlines reported a narrower loss, $18 million, in the third quarter. United Airlines was in the red $57 million for the quarter.

Southwest Airlines said it lost $16 million in the quarter including one-time charges.

On the positive side, JetBlue Airways said it made $15 million in the quarter. AirTran Holdings of Orlando reported a net profit of $10.4 million.

Oslo's Norwegian Air Shuttle today confirmed an order for six more Boeing 737-800 aircraft.

The low-cost European carrier has ordered 48 737s from Boeing with this order. The airline is also leasing 22 of the single-aisle Renton-built planes from leasing firms.

Founded in 2002, the airline is expanding its network in Europe with the 186-seat planes.

Norwegian's 737s will be among the first to feature Boeing's new "Sky Interior." That interior features soft blue overhead lighting, modified sidewalls and window surrounds and overhead bins.

The Port of Tacoma is offering a free bus tour of its facilities Friday from 9 a.m. to noon.

The port's tour bus will pick up passengers who've reserved their seats at the South Hill Park & Ride lot at 10416 94th Ave. E. at 9 a.m.

Reservations are available by calling the port at 253-383-9463 or by e-mail at bustours@portoftacoma.com

Passengers should be back in South Hill by noon, the port said. Photo identification is required for riders 17 and older.

On-line travel company Expedia Inc. announced today it will close its Tacoma call center office by the end of the year.

The company plans to transfer some of the work the Tacoma office performed to an expanded call center in Las Vegas.

The company said an unspecified number of workers in Tacoma will be offered jobs in Expedia's Bellevue headquarters or in the Las Vegas call center.

The company didn't say specifically why it is closing the Tacoma operation, one of four call centers it maintains around the country.

It did issue a general explanation: "In making the decision to grow the Las Vegas location and close the Tacoma location, Expedia concluded that these geographic changes in its call center footprint would enable the company to most effectively serve its customers and address its evolving business needs."

"Expedia is providing support to any employees transitioning out of the company," the company said in a press release.

Boeing needs to bring more of its engineering work back inside Boeing, the company's chief executive said today after announcing a $1.6 billion loss for the third quarter.

Jim McNerney said the company went too far in attempting to develop the revolutionary 787 Dreamliner while also installing a new design and production scheme that relied heavily on outside suppliers.

Much of the company-wide quarterly loss was driven by $2.5 billion in new costs associated with design and production problems on the Dreamliner. The company also took $1 billion in additional losses on the development and production of a second new project, a next generation 747.

"The industry got a little overheated," said McNerney addressing the root of the 787 and 747 problems. "Baselines set up were very aggressive."

Attempting to build a new plane with pioneering composite technology while simultaneously pushing major design and construction responsibility out to partners was "a bridge too far," he said.

"We need to bring more of the engineering, especially as the systems level, back into Boeing," he told reporters and analysts in a conference call.

The Dreamliner is now nearly 2 1/2 years late in flying for the first time, and the 747-8's first flight schedule recently slipped into the first quarter of 2010.

Boeing's losses for the quarter amounted to $2.23 a share. The 787 and 747 charges alone amounted to a $3.59 a share. Good performance in other parts of the company blunted those Dreamliner and 747 losses.

"The fundamental operating engine of the company is running well," McNerney noted.

While some airlines have deferred or canceled orders in the first nine months of the year, the commercial airplanes side of the company still has a backlog of orders -- $254 billion -- that represent more than seven years of production, he said.

The company has no plans to reduce the production pace of its bread-and-butter 737 at its Renton plant, he said, despite some deferrals by some customers.

Boeing will continue laying off workers to adjust to changing demands in other sectors, particularly in defense where the government is tightening up programs and in the service sector where airlines are cutting back on expenses, the Boeing CEO said.

Delta Air Lines announced new flights from Sea-Tac Airport to Asia and Europe today adding destinations Beijing in China and Osaka in Japan and bolstering its repertoire of flights to Amsterdam.

The flights from Sea-Tac to Beijing and Osaka will begin next summer. Three additional weekly flights to Amsterdam are slated to start June 1. The airline, which merged with Northwest Airlines last year, already offers seven weekly flights to Amsterdam, hub for its European partner, Air France-KLM.

The Beijing flights begin June 4. The airline will challenge China's Hainan Airlines, which already flies that route. Osaka flights are due to start June 7. Northwest Airlines once flew that route but abandoned it.

Delta already flies from Sea-Tac to Tokyo daily. The airline earlier this year dropped flights from Sea-Tac to London to free up an aircraft for other overseas routes from other airports.

Delta will use its code-sharing arrangements with SeaTac's Alaska Airlines to feed the international flights and to get international passengers to other domestic destinations that Delta doesn't serve.

Sea-Tac in recent years has both gained and lost international service. Last summer, longtime Sea-Tac tenant SAS halted service from the Puget Sound area to Copenhagen as part of a systemwide cutback. Delta also ended its London service, although British Airways continued its service to the English capital.

Air France added non-stop service from Sea-Tac to Paris in 2007. Aeromexico began serving Mexico City and San Jose del Cabo from Sea-Tac in 2008. Lufthansa started service to Frankfurt and Hainan to Beijing last year. Icelandair began flying from Sea-Tac to Reykjavik last summer.

San Francisco's Virgin America Airlines fired another shot in the West Coast airfare war this week, reducing some roundtrip fares from Seattle to San Francisco to as low as $80 without taxes and to $120 excluding taxes to Los Angeles.

The airline, partially owned by Sir Richard Branson's Virgin Group, also posted fares as low as $120 roundtrip to Las Vegas, San Diego and Orange County. Those flights may require a stop in San Francisco.

The airline also launched fares of $200 roundtrip excluding taxes to Boston, New York City, Washington, D.C., and Fort Lauderdale. All of those flights require stops in Virgin's home city of San Francisco.

The new prices are available for flights Tuesday through Thursday and Saturday. They must be booked by Oct. 27.

Look for competitors such as Alaska Airlines and United Airlines to match their fares on comparable flights.

Boeing delivered its 12th 777-300ER to Hong Kong's Cathay Pacific Airways this week. The plane is the first painted in a special paint scheme highlighting Cathay's membership in the OneWorld airline alliance.

The OneWorld alliance is a group of 11 major airlines and 21 affiliate airlines worldwide that coordinate schedules and share flights and marketing.

Cathay has a fleet of 29 777s, 12 of them 777-300s, five 777-200s and 12 777-300ERs. The 777-300ER is the extended range version of the standard 777.

Officials from the City of Tacoma and the LeMay Automobile Museum met Friday afternoon – for the second time this week – to discuss what both sides expect will be the final details leading to approval and construction of the museum.

At a Tuesday session of the City Council, some members voiced concern that disagreements had jeopardized the project, which would place the museum on a site near the Tacoma Dome.

On Friday, most points of previous contention seemed either settled or aimed toward agreement. The main target of council concern Tuesday – the use by LeMay of nine acres in an area now used for parking – looked to have been settled as officials Friday consulted a pair of maps of the area.

With the removal of a bus turn-out space and the narrowing of a proposed access road, museum officials were satisfied that they would retain their total acreage in an area that now comprises lots “B” and “C” without encroaching on lot “A,” which the city sought to preserve.

The issue of the placement of utilities was agreed in principle and will await consultation with Tacoma Public Utilities staff, with details to be provided at a subsequent meeting of city staff and LeMay representatives.

Represneting the City Friday were the Tacoma City Manager and Deputy City Manager, plus officials from the offices of Community and Economic Development, Public Works, Public Assembly Facilities and the City Attorney.
Representing LeMay were board members Paul Miller and Karl Anderson.

City Manager Eric Anderson said after the meeting, “We accomplished more than I expected.” Miller joined the sentiment by adding, “Everybody appears to be working very constructively to find solutions.”

Karl Anderson said he remained concerned about the looming deadlines for financing of the project. “I still have concern about getting it done,” he said.

At the meeting, he said, “If we can get this done in a week, that should give the funders enough time to review it.”

Funding for the project depends on final plans being available to financiers of a New Markets Tax Credit. The chance to qualify for those funds will evaporate at the end of the year, and museum and city officials must still agree on several matters including building plans, final siting of the facility, the grading of the land and the precise location of both utilities and parking.

Most of the items contained in a checklist provided by the city manager were either already completed or near completion, judging from the discussion. The atmosphere Friday was cordial and cooperative, exemplified by Eric Anderson’s question to Miller, “What do you know that we don’t know, and what do we know that you don’t know?”

That was the agenda he set, and appeared to accomplish, on Friday.

Regular gas prices dropped below $2.50 a gallon at at least three Tacoma-area outlets today as the decline in vehicle travel cuts demand.

The price for regular was $2.49 a gallon at two Tacoma ARCO stations and at the Costco near Tacoma Mall.

On average, local regular gas was selling for $2.70 a gallon according to Tacomagasprices.com.

That's down from $2.958 a month ago and from $3.206 a year ago.

Moody's Investor Services has downgraded the Boeing Co.'s investment outlook rating from "stable" to "negative" based in part on its continuing problems getting its 787 Dreamliner off the ground.

The ratings service said the order erosion for the revolutionary plane is concerning as well as the company's repeated delays in putting the first test plane into the air.

Boeing has delayed the Dreamliner's first flight five times, the latest in late June when it said the aircraft's wing-body joint had shown potential weakness in static tests.

The company also recently postponed the first flight of its next-generation of the venerable 747 until the first quarter of next year because of a number of unfinished tasks on the first aircraft.