American, US Airways set to clinch merger

(MoneyWatch) American Airlines and US Airways (LCC) are set to announce a merger that would create the world's biggest carrier.

Under the deal, which is expected to be unveiled Thursday if the timeline isn't moved up sooner and there are no last-minute snags, the combined airline would keep the "American" name. It would still require federal approval, although that is virtually ensured. US Air CEO Doug Parker is expected to lead the combined company.

A merger of US Air and American would surpass a 2010 tie-up between United Airlines (UAL) and Continental and a 2008 deal joining Delta (DAL) and Northwest. The merged American would be the largest carrier and sport a market valuation of roughly $10 billion.

Although airlines tout such consolidation as a way to cut costs and expand service amid intense competition, whether industry mergers raise fares is an open question. Many analysts say yes because reduced competition in any business often results in higher prices. One study found that ticket prices went up more than 20 percent between Detroit and Atlanta after Delta bought Northwest. Fares went up more than 30 percent on routes between Chicago and Houston, as well as Newark to San Francisco, after the United-Continental deal.

In seeking to run more efficiently, merging airlines also often cut capacity and eliminate routes. 

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American close to merger with U.S. Airways

Other analysts are more optimistic about the potential benefits to travelers. They say the three largest U.S. airlines still must compete with discount carriers such as Southwest (LUV), which has flourished for years by offering low-cost flights and no-frills service.

The consolidation trend is largely blamed on the price of fuel. Oil now costs so much more per barrel than it did 10 years ago that one analyst says the margin of profit on many flights has shrunk to the value of a single seat. That means an airline can lose money if it flies with one single empty middle seat. The days of elbow room are over.

American Airlines has been operating under court supervision since declaring bankruptcy in November 2011.

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Ship Stranded: Love Boat to Horror Honeymoon

A Texas couple's fantasy wedding quickly turned into a nightmare honeymoon when the fire-damaged Carnival Cruise ship carrying them became stranded in the Gulf of Mexico.

Rob Mowlam, 37, and Stephanie Stevenson, 27, of Nederland, Texas, got married on the Carnival Triumph on Saturday. The four-day cruise was meant to be back to shore on Monday, but was left disabled by an engine fire on Sunday.

The ship is being slowly towed to shore and is expected to dock in Mobile, Ala., on Thursday if weather permits. The vessel is without air conditioning, many working toilets and some restaurant service. Passengers, many who are sleeping in tents on deck, have told ABC News the smell on the ship is foul.

That is the honeymoon setting for Mowlam and Stevenson.

"[Rob Mowlam] had been with his girlfriend, or fiance, for a long period of time and they just took the next step," Mowlam's brother James Mowlam III told ABCNews.com. "The captain is the king of the world when they're on the boat and he hitched them up."

James Mowlam said he was shocked when he heard about the stranded boat and the increasingly dire conditions on the ship.

"It is an atrocious scene to be subjected to," he said.

Mowlam said he has not been able to communicate with his brother, but that his father has had sporadic communication with him.

"It would be my guess that this would probably not be on anyone's great list of memorable wedding experiences," Mowlam said with a laugh. "Although, my mom told him that she was hoping they had a memorable wedding and I think this would classify as a memorable wedding experience."

Lt. Cmdr. Paul McConnell/U.S. Coast Guard/AP Photo

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The bride's brother, Justin Davis, told ABCNews.com that his sister works for a doctor's office and the cruise was a gift from the doctor to the staff.

Davis has not been able to speak to Stevenson but said that her two young sons are being cared for by her mother. He said his sister is tough and he guesses she's probably not scared.

"She might be a little aggravated at the situation, but I'd say she's [probably] handling it really well," he said.

Others on the ship do not seem to be handling the situation so well.

Elderly and disabled passengers aboard the ship are struggling to cope with the worsening conditions, according to at least one passenger.

"Elderly and handicap are struggling, the smell is gross," passenger Ann Barlow text-messaged ABC News overnight. "Our room is leaking sewage."

The head of Carnival Cruise Lines said the British-U.S.-owned company was working hard to ensure the thousands of passengers stranded on the disabled ship were as comfortable as possible while the vessel was being towed to a port in Alabama.

"I need to apologize to our guests and to our families that have been affected by a very difficult situation," Carnival Cruise Lines president and CEO Gerry Cahill said at a news conference Tuesday evening.

It was the first time since a fire erupted in Triumph's engine room Sunday, knocking out its four engines, that a company representative had spoken publicly. The Triumph, with roughly 4,200 people on board, was left bobbing like a 100,000-ton cork for more than 24 hours. Giant sea-faring tugboats then hooked up to the ship and began towing the nearly 900-foot-long ship to land.

Carnival spokeswoman Joyce Oliva told The Associated Press Tuesday that a passenger with a pre-existing medical condition was taken off the ship as a precaution. Everyone else will likely have to weather conditions such as scarce running water, no air conditioning and long lines for food.

Back on land, passenger Barlow's 11-year-old twins told ABC News Tuesday they are worried as more passengers continue to talk about living with limited power and sanitation.

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Was euro ever 'about to collapse'?

By Ramy Inocencio, for CNN

February 12, 2013 -- Updated 0948 GMT (1748 HKT)

STORY HIGHLIGHTS

• Former European Central Bank chief says euro was never going to collapse


• In 2012, critics predicted at least partial breakup of 17-member eurozone


• Euro plunged to 25-month low against U.S. dollar in July 2012


• Currency war fears prevail in run-up to G20 finance ministers meeting this week

Hong Kong (CNN) -- Less than six months ago, eurozone watchers had been predicting the breakup of the 17-member bloc of nations as the euro plunged to a 25-month low against the U.S. dollar last July.

Even as recently as November, Warren Buffett, the famed CEO of Berkshire Hathaway, said of the eurozone's future that "it's hard to tell exactly how it comes out."

But since then, the euro has appreciated nearly 11% as its member countries battled to contain sovereign debt crises, rising unemployment and social unrest. The euro now stands at a 13-month high against the greenback.

And flying in the face of last year's critics, former European Central Bank chief Jean-Claude Trichet told CNN's Nina dos Santos that the euro "was never about to collapse" and that its viability as a currency is solid.

"The euro as a currency has never been put in question," asserted Trichet, while at the same time admitting the euro area's financial stability and credit worthiness had been tested.

As for the euro, he said it "is certainly reliable and credible."

Yet, the euro's gains over the past seven months is a mixed blessing. Arguments have long-existed for and against a stronger currency. Appreciation means investors are more confident in the euro but eurozone exports become more expensive when sold overseas; devaluation makes the bloc's exports more competitive globally, which many eurozone officials would prefer.

But if the world's major economies devalued their currencies to make exports more competitive and to spur their economies to growth again, it would be chaos, says Trichet.

"If the reasoning is the same in all constituencies you have nothing but...a 'beggar-thy-neighbor' policy which is a recipe for catastrophe."

That catastrophe could take the form of an all-out currency war. And this week, the world's leading banks called on the G20 group of richest nations to avoid such an outcome.

"We believe major central banks should focus on enhancing their cooperation...to guide market expectations and thus help avoid a disorderly interest rate adjustment process and undue exchange rate volatility," the Institute of International Finance wrote in a letter to Russian Finance Minister Anton Siluanov, who is chairing the G20 finance minister's meeting later this week.

But with the eurozone in recession for the second time in four years, the desire to devalue the euro may be strong. The European Central Bank in December cut its 2013 growth forecast, with a best-case growth rate scenario of only 0.3%.

"It is no time for complacency," warned Trichet who added that the central banks of the United States, Japan and Europe as well as their private sectors should get their "house(s) in order."

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17 gunmen dead in Thai military base attack

 

BANGKOK, Thailand: Scores of heavily-armed gunmen stormed a military base in unrest-plagued southern Thailand, an army spokesman said on Wednesday, in a major assault that left at least 17 militants dead.

"Some 100 fully armed militants stormed the base, where there were 60 marines," Colonel Pramote Promin, southern army spokesman, told AFP.

He said the attack, one of the most ambitious in several years of violence in Thailand's three southernmost provinces, had left at least 17 assailants dead. No military casualties were reported.

- AFP/de

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Hear suspect's gunfight with cops

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State of the Union: "Act two" of Obama's 2nd term

When the curtain rises on President Obama's State of the Union speech tonight, the White House wants it viewed as "Act Two" - a follow-up to the national goals and policy objectives of which he spoke 22 days earlier on the West Front of the Capitol.

"The president has always viewed the two speeches, the inaugural address and the State of The Union, as two acts in the same play," said press secretary Jay Carney yesterday.

Though Mr. Obama has given more speeches this year on his proposals to stem gun violence and overhaul immigration policy, the "core emphasis" of his speech tonight is the economy.

"You'll hear from the president a very clear call for the need to take action to help our economy grow and help it create jobs," said Carney.

That includes the showdown with Congress over the mandatory spending cuts due to take effect starting March 1.

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Valerie Jarrett on SOTU: "An optimistic vision"

The president will urge Congress "not to shoot the economy in the foot," said Carney, by agreeing to his plan to avert the across-the-board spending cuts which the White House portrays as mindless and severe.

The president will again make it clear he wants a "balanced" plan that calls for additional tax revenue from America's top earners.

"My message to Congress is this: let's keep working together to solve this problem," the president said Saturday in his weekly address.

But Republican leaders say Mr. Obama already got his tax hikes as part of the "fiscal cliff" package, and now needs to focus exclusively on reductions in spending.

It'll be Mr. Obama's seventh appearance before a Joint Session of Congress and he'll be taking the rostrum aware that the national unemployment rate still hovers just under 8 percent and economic growth fell into negative territory at the end of 2012.

"The economy is not in a worse place than it was before," said Carney, pointing to the progress made since Mr. Obama's first State of the Union Address. "We were in economic freefall."

He said the president will make the case that "we are at a moment when the economy is poised to continue to grow...to build on the job creation that we've achieved -- over 6.1 million jobs created by our businesses over the past 35 or 36 months."

Carney added the president will propose further steps to grow the economy in a way that makes the middle class more secure and helps those trying to climb the ladder into the middle class.

"That is absolutely going to be his focus in the second term as it was in the first term," said Carney.

1/2

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Officer Dies After Dorner Shootout; Cabin on Fire

Police are in a tense standoff with fugitive former-cop Christopher Dorner, who barricaded himself inside a remote mountain cabin near Big Bear, Calif., after a shootout with police in which he shot two cops, killing one, authorities said.

Smoke was seen coming from near or at the cabin shortly before 4:30 p.m. PT, and a fire has been reported to authorities.

Dorner, a former Navy marksman wanted for murdering a police officer and suspected in the deaths of two other people earlier this month, engaged in a gunfight with two San Bernardino County Sheriff's deputies who had pursued him.

The two were airlifted to a nearby hospital, where one died, police said.

Dozens of local, state and federal authorities are at the scene in the San Bernardino Mountains, and have the the cabin surrounded. Dorner has sworn to kill police and their family members in a manifesto discovered online last week.

The search for Dorner, one of the largest manhunts in recent memory, culminated in a call to police this afternoon that a suspect resembling Dorner had broken into a nearby home, taken hostages and stolen a car.

Police said the former cop, believed to be heavily armed and extremely dangerous, took two women hostage before stealing a car just after noon local time today, police said.

The two hostages, who were tied up by Dorner but later escaped, were evaluated by paramedics and were determined to be uninjured.

Officials say Dorner crashed the stolen vehicle and fled on foot to the cabin where he barricaded himself and exchanged fire with deputies from the San Bernardino Sheriff's Office and state Fish and Game officers.

Los Angeles Police Department/AP Photo

Christopher Dorner Manhunt: An International Search? Watch Video

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Police have sealed all roads going into the area and imposed a no-fly zone above the cabin, nestled in a wooded area that has received several inches of snow in recent days.

Four Big Bear area schools were briefly placed on lockdown.

The San Bernardino County Sheriff's Department stopped all traffic leaving the area and thoroughly searched vehicles, as SWAT team and tactical units could be seen driving toward the cabin, their sirens blaring.

FULL COVERAGE: Christopher Dorner Manhunt

Authorities say they believe Dorner may be watching reports of the standoff and have asked media not to broadcast images of police surrounding the cabin.

"If he's watching this, the message ... is: Enough is enough. It's time to turn yourself in. It's time to stop the bloodshed. It's time to let this event and let this incident be over," said Los Angeles Police Department spokesman Andy Smith, told reporters at a press conference.

Dorner faces capital murder charges that involve the killing of Riverside police officer Michael Crain, who was gunned down in an ambush last Thursday.

Since then a massive manhunt has been under way, focused primarily in the San Bernardino Mountains, but extending to neighboring states and as far away as Mexico.

A capital murder charge could result in the death penalty if Dorner is captured alive and convicted. Crain was married with two children, aged 10 and 4.

The charges do not involve the slayings of Monica Quan and her fiance, who were found shot to death Feb. 3. Quan was the daughter of former LAPD Capt. Randal Quan, who was mentioned as a target of Dorner's fury in his so-called "manifesto," which he posted on his Facebook page.

PHOTOS: Former LAPD Officer Suspected in Shootings

In the 6,000 word "manifesto," Dorner outlined his anger at the Los Angeles Police Department for firing him, and made threats against individuals he believed were responsible for ending his career with the police force five years ago.

Dorner's grievance with police goes back five years, to when he was fired after filing what the LAPD determined to be a false report accusing other cops of brutality.

The LAPD has assigned 50 protection details to guard officers and their families who were deemed possible targets.

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Why pope will long be remembered

Tim Stanley says Pope Benedict will be seen as an important figure in church history.

STORY HIGHLIGHTS

• Timothy Stanley: Benedict XVI's resignation is historic since popes usually serve for life


• He says pope not so much conservative as asserting church's "living tradition"


• He backed traditionalists, but a conflicted flock, scandal, culture wars a trial to papacy, he says


• Stanley: Pope kept to principle, and if it's not what modern world wanted, that's world's problem

Editor's note: Timothy Stanley is a historian at Oxford University and blogs for Britain's The Daily Telegraph. He is the author of "The Crusader: The Life and Times of Pat Buchanan."

(CNN) -- Journalists have a habit of calling too many things "historic" -- but on this occasion, the word is appropriate. The Roman Catholic Church is run like an elected monarchy, and popes are supposed to rule until death; no pope has stepped down since 1415.

Therefore, it almost feels like a concession to the modern world to read that Benedict XVI is retiring on grounds of ill health, as if he were a CEO rather than God's man on Earth. That's highly ironic considering that Benedict will be remembered as perhaps the most "conservative" pope since the 1950s -- a leader who tried to assert theological principle over fashionable compromise.

Timothy Stanley

The word "conservative" is actually misleading, and the monk who received me into the Catholic Church in 2006 -- roughly a year after Benedict began his pontificate -- would be appalled to read me using it. In Catholicism, there is no right or left but only orthodoxy and error. As such, Benedict would understand the more controversial stances that he took as pope not as "turning back the clock" but as asserting a living tradition that had become undervalued within the church. His success in this regard will be felt for generations to come.

He not only permitted but quietly encouraged traditionalists to say the old rite, reviving the use of Latin or receiving the communion wafer on the tongue. He issued a new translation of the Roman Missal that tried to make its language more precise. And, in the words of one priest, he encouraged the idea that "we ought to take care and time in preparing for the liturgy, and ensure we celebrate it with as much dignity as possible." His emphasis was upon reverence and reflection, which has been a healthy antidote to the 1960s style of Catholicism that encouraged feverish participation bordering on theatrics.

Nothing the pope proposed was new, but it could be called radical, trying to recapture some of the certainty and beauty that pervaded Catholicism before the reforming Vatican II. Inevitably, this upset some. Progressives felt that he was promoting a form of religion that belonged to a different century, that his firm belief in traditional moral theology threatened to distance the church from the people it was supposed to serve.

If that's true, it wasn't the pope's intent. Contrary to the general impression that he's favored a smaller, purer church, Benedict has actually done his best to expand its reach. The most visible sign was his engagement on Twitter. But he also reached out to the Eastern Orthodox Churches and spoke up for Christians persecuted in the Middle East.

In the United Kingdom, he encouraged married Anglican priests to defect. He has even opened up dialogue with Islam. During his tenure, we've also seen a new embrace of Catholicism in the realm of politics, from Paul Ryan's nomination to Tony Blair's high-profile conversion. And far from only talking about sex, Benedict expanded the number of sins to include things such as pollution. It's too often forgotten that in the 1960s he was considered a liberal who eschewed the clerical collar.

The divisions and controversies that occurred under Benedict's leadership had little to do with him personally and a lot more to do with the Catholic Church's difficult relationship with the modern world. As a Catholic convert, I've signed up to its positions on sexual ethics, but I appreciate that many millions have not. A balance has to be struck between the rights of believers and nonbelievers, between respect for tradition and the freedom to reject it.

As the world has struggled to strike that balance (consider the role that same-sex marriage and abortion played in the 2012 election) so the church has found itself forced to be a combatant in the great, ugly culture war. Benedict would rather it played the role of reconciler and healer of wounds, but at this moment in history that's not possible. Unfortunately, its alternative role as moral arbiter has been undermined by the pedophile scandal. Nothing has dogged this pontificate so much as the tragedy of child abuse, and it will continue to blot its reputation for decades to come.

For all these problems, my sense is that Benedict will be remembered as a thinker rather than a fighter. I have been so fortunate to become a Catholic at a moment of liturgical revival under a pope who can write a book as majestic and wise as his biography of Jesus. I've been lucky to know a pope with a sense of humor and a willingness to talk and engage.

If he wasn't what the modern world wanted -- if he wasn't prepared to bend every principle or rule to appease all the people all the time -- then that's the world's problem rather than his. Although he has attained one very modern distinction indeed. On Monday, he trended ahead of Justin Bieber on Twitter for at least an hour.

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The opinions expressed in this commentary are solely those of Timothy Stanley.

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Anti-whaling group takes battle to top US court

WASHINGTON: The Sea Shepherd conservation group asked the US Supreme Court on Monday to lift an order forcing it to steer clear of Japan's whalers, who are seeking legal reprisals over harassment at sea.

Since 2002, Sea Shepherd has annually disrupted Japan's contested hunt in the Southern Ocean but a US court issued an injunction on December 17 for the activists to stay at least 500 yards away from the whaling vessels.

Environmental lawyer Robert F. Kennedy Jr., the son and namesake of the slain political icon, urged the United States to show support for the Sea Shepherd Conservation Society and its fugitive founder Paul Watson.

"It's a mission that only they are capable of accomplishing and that is absolutely vital to the enforcement of international agreements on the high seas which otherwise go unenforced," Kennedy told reporters.

The International Whaling Commission has designated a whale sanctuary in the Southern Ocean. Japan kills whales in the area through a loophole in a 1986 moratorium on commercial whaling that allows lethal research.

Kennedy called Japan's government-supported Institute of Cetacean Research, which runs the whaling program and sued Sea Shepherd, "a pirate organisation masquerading as a scientific research group."

In a filing to the Supreme Court on Friday, Sea Shepherd and Watson said that the lower court "acted rashly" and voiced concern over the order's "extraordinarily long reach" to areas outside US jurisdiction.

The document said that the injunction marked "a potentially existential threat" to Sea Shepherd as more than 80 per cent of its funding comes from donations, which "may slow to a trickle" without the anti-whaling campaign.

The US Court of Appeals for the Ninth Circuit cited safety concerns when it issued the injunction, effective until a decision on the case.

The Institute of Cetacean Research hit back and was believed to have asked the judge to find Sea Shepherd in contempt of court -- which would potentially lead to punishment.

Sea Shepherd released a letter from a lawyer representing the institute, which complained that MV Brigitte Bardot, a former ocean racer named after the French actress and animal rights activist, violated the 500-yard injunction on January 29.

The letter warned of legal action unless Sea Shepherd ordered the Brigitte Bardot to comply with the injunction or returned it to port.

The Oregon-based group contended that it was observing the injunction, saying that the Brigitte Bardot sails under an Australian flag and is operated by Sea Shepherd's Australian sister organisation.

Japan's institute is "just like a bully who is finally challenged and runs to his mommy," said Scott West, the director of intelligence and investigation for US Sea Shepherd.

Sea Shepherd boasted that it has prevented Japan from killing whales this season. Japan, which makes no secret that meat from whaling ends up on dinner plates, accuses Western nations of disrespecting its cultural traditions.

Gavin Carter, a US-based spokesman for the Institute of Cetacean Research, called Sea Shepherd's Supreme Court filing an "unusual approach."

Watson, a dual US and Canadian citizen, has kept his whereabouts unknown since July, when he jumped bail in Germany, where he was arrested on charges from Costa Rica related to a confrontation over shark finning.

- AFP/jc

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Report details Osama bin Laden killer's 'nightmares'

By Jamie Gumbrecht, CNN

updated 7:06 PM EST, Mon February 11, 2013

STORY HIGHLIGHTS

• Navy SEAL who shot Osama bin Laden has no military pension or health care, report says


• Journalist Phil Bronstein profiles man he calls the Shooter in the March issue of Esquire


• Bronstein: "He has nightmares about how he's going to support his family"

(CNN) -- He's the man who rolled into a bedroom in Abbottabad, Pakistan, raised his gun and shot Osama bin Laden three times in the forehead.

Nearly two years later, the SEAL Team Six member is a secret celebrity with nothing to show for the deed; no job, no pension, no recognition outside a small circle of colleagues.

Journalist Phil Bronstein profiled the man in the March issue of Esquire, calling him only the Shooter -- a husband, father and SEAL Team Six member who says he happened to pull the trigger on the notorious terrorist. It's a detailed account of how the raid unfolded, and what comes after for those involved. The headline splashed across the cover reads, "The man who killed Osama bin Laden ... is screwed."

In a statement the Navy responded: "We have no information to corroborate these new assertions. We take seriously the safety and security of our people, as well as our responsibility to assist sailors making a transition to civilian life. Without more information about this particular case, it would be difficult to determine the degree to which our transition programs succeeded."

"They spent, in the case of the shooter, 16 years doing exactly what they're trained to do, which is going out on these missions, deployment after deployment, killing people on a regular basis, " said Bronstein, executive chairman of the Center for Investigative Reporting. "They finally get to the point where they don't want to do that anymore."

Bronstein reported that the man left SEAL Team Six in September. His family's health care coverage ceased. Because he retired before the 20-year mark, he gets no pension.

The Shooter is judicious about the details of his story and hasn't been involved in dramatic books, movies or video games that will make millions for some. It's out of loyalty to his work and concern about his family's safety, Bronstein said. The shooter worries what could happen if his name went public, like Matt Bissonnette, the SEAL whose identity was revealed after he published the book "No Easy Day" using a pseudonym. CNN can't verify the account in Esquire, or the one in Bissonnette's book.

Bronstein reported that the Shooter was offered some witness protection, but no such program exists yet.

Home life is a struggle, too. The Shooter and his wife are separated, Bronstein wrote, although they live in the same house -- "on very friendly, even loving terms" -- to save money. He has done consulting work, Bronstein told CNN's Wolf Blitzer, but it's not clear how long it will last.

"They suddenly find themselves trying to translate into a civilian world that they're not used, and they haven't been used to for decades," Bronstein said. "I think he has nightmares about how he's going to support his family, and how he's going to feed his family."

Watch The Situation Room with Wolf Blitzer weekdays at 4pm to 6pm ET and Saturdays at 6pm ET. For the latest from The Situation Room click here.

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