In other items: Electrical problems silence satellite; China Southern Airlines to lease nine Boeing 737s from GE unit; video-game, console sales fell in December; and Steve Case admits he "wasn't the right guy."

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El Al Israel Airlines declined yesterday to respond to a newspaper report that it will replace Boeing aircraft with leased planes from Airbus.

“El Al doesn’t comment on its future business plans,” spokesman Ran Rahav said in a statement. An Airbus spokeswoman also declined comment.

El Al’s new management, which took control of the airline last month from the Israeli government, will replace some Boeing planes with leased aircraft from Airbus in a plan to upgrade its business class to the U.S., said the Yediot Aharonot newspaper, without saying where it got the information.

The airline will lease the older Boeing planes in its fleet and use others for cargo, Yediot said. It plans to lease its Boeing 757 and 767 airplanes to other airlines and will convert its four 747-400s to cargo use, the newspaper said.

Boeing spokesman Jim Proulx in Seattle said the airline “isn’t aware of any such issues with El Al.”

El Al came under pressure from the U.S. to stick with an all-Boeing fleet when in 2000 it considered buying up to four planes from Airbus. El Al dropped the plan that November, saying it could no longer afford them.


Electrical problems silence satellite

Intelsat said yesterday its IS-804 satellite that covered the South Pacific was permanently lost because of an electrical malfunction.

The global communications-satellite operator expects to record a noncash cost of about $73 million to write off the satellite made by Lockheed Martin and launched in 1997.

Zeus Holdings, a company created by Apollo Management and three other buyout firms, agreed in August to buy Intelsat for $3 billion. Under the deal, the satellite’s loss gives Zeus the option to back out, Intelsat said.

China Southern Airlines

Nine Boeing 737s to be leased from GE unit

China Southern Airlines, the nation’s largest carrier by fleet size, said today it plans to lease nine Boeing 737-800 planes from General Electric Commercial Aviation Services for seven years.

The planes will be delivered by 2006, Guangzhou-based China Southern told the Shanghai stock exchange. No financial terms were disclosed.

Game consoles

Video-game, console sales fell in December

U.S. video-game sales fell 1 percent in December to $1.69 billion, with sales of titles for Sony’s PlayStation 2 console dropping 8.9 percent while those for Microsoft’s Xbox jumped 20 percent.

Unit sales of consoles declined 12 percent in December, said J.P. Morgan Securities analyst Dean Gianoukos, citing a report from market research firm NPD Group.

Sony’s PlayStation 2, introduced in the U.S. in 2000, declined 50 percent. Xbox, which debuted in 2001, dropped 7.2 percent. Nintendo’s GameCube dropped 30 percent, while sales of games for that machine fell 9.4 percent.

Sony’s PlayStation 2 has outsold Xbox by about five to one. Both consoles went into the holiday season with installments of their most popular games on store shelves — “Halo 2” for Xbox and “Grand Theft Auto: San Andreas” for PlayStation.

The hardware and software sales results were “in line with expectations,” New York-based Gianoukos said in the report.


Steve Case admits he “wasn’t the right guy”

Steve Case, former chairman of America Online, told an audience in Mountain View, Calif., last week that he’ll be the fall guy for the failure of the merger of Time Warner and America Online.

“The merger was my idea,” he said.

“In retrospect, I probably wasn’t the right guy to be the chairman of a company with 90,000 employees,” Case said at the Computer History Museum event, as CNet News reported. “In retrospect, none of us were the right guys.”

Case continues on the Time Warner board and spends much time in Hawaii, where, among other ventures, he heads a firm developing vacation timeshares.

Compiled from Bloomberg News and Knight Ridder/Tribune Information Services