California Inc.: Blame the airline industry for Disneyland's higher ticket prices

Welcome to California Inc., the weekly newsletter of the L.A. Times Business section.

I'm Business columnist David Lazarus, and here's a rundown of upcoming stories this week and the highlights of last week.


Trading today begins with a nice tail wind after stocks posted solid gains Friday. The increases followed a rally in Europe and an uptick in oil prices, which Wall Street sees as a sign of rising demand and thus a happy global economy. The International Energy Agency said "there are signs that prices might have bottomed out."


Cuba flights: The Department of Transportation is scheduled to announce Monday which U.S. airlines will get to make commercial flights to Cuba. Federal aviation officials said they plan to approve 20 daily scheduled round-trip flights to Havana, and 10 flights to nine smaller airports around the island nation. U.S. law still bars tourists from visiting Cuba for leisure trips, but regular commercial flights will make it easier for Americans to travel to Cuba under 12 specific criteria, such as to study, visit relatives, perform religious activities or support the Cuban people.



March 14, 12:10 p.m.: The newsletter incorrectly reported that the U.S. Department of Transportation would award commercial routes to Cuba on March 14. The federal agency will award the routes to airlines later this summer. March 14 was the deadline for interested parties to file comments about the airline applications.


Retail sales: Are consumers spending or saving? On Tuesday, the Commerce Department will announce February's retail sales, a key economic barometer. Economists have been predicting for more than a year that falling gas prices and an improved job market would boost spending. But retail sales have lagged behind as many consumers opted to put their savings in the bank or use it to pay down debt. Sales in January were up 0.2% from December, which analysts attributed to an abundance of deals.

Burger and fries: Shake Shack is planting its buns on the West Coast for the first time, opening Tuesday on a busy block in West Hollywood. But in picking Southern California for its westward expansion, the New York eatery may be facing its biggest challenge yet: whether a Big Apple burger joint can survive in the birthplace of America's burger culture. This is the place, after all, where McDonald's opened its first restaurant, In-N-Out has a devoted following and gourmet burger purveyors such as the Counter have earned their greasy stripes. Investors in Shake Shack, which has struggled on the public markets since going public last year, will be watching closely.

Going once, going twice: The assets of bankrupt publishing company Freedom Communications, owner of the Orange County Register and Riverside Press-Enterprise, are set to be auctioned off Wednesday. L.A. Times owner Tribune Publishing, Los Angeles Daily News owner Digital First Media and a group of Freedom insiders backed by real estate developer Mike Harrah have bid to buy the newspapers. Freedom filed for bankruptcy protection on Nov. 1 after more than $40 million in losses.

Interest rates: Federal Reserve policymakers will announce Wednesday whether they'll raise a key interest rate. Federal Reserve Vice Chairman Stanley Fischer said last week that U.S. inflation may be starting to tick higher from its very low levels, a key condition for hiking the Fed's benchmark short-term interest rate. The Fed lifted the rate in December after keeping it near zero for seven years. At the end of this week's two-day meeting, Fed Chairwoman Janet Yellen will hold a news conference to discuss where things stand.


Monday's Business section looks at Walt Disney Co.'s move to lift prices at Disneyland and its other theme parks on busy days. It was a radical step for the entertainment giant, but the news made perfect sense to former American Airlines CEO Robert Crandall. What Crandall did 30 years ago with "super saver" fares, and what Disney is doing now, is part of what's called "dynamic" or "demand-based" pricing, and it's a practice that's rapidly spreading in both the private and public sectors.



Here are some of the other stories that ran in The Times Business section in recent days that we're continuing to follow:

iPhone tussle: When Apple sought to promote its music streaming service, it talked to the tech press. But as the iPhone maker defends its security technology and defies a court order in the San Bernardino terrorism case, it turned last week to a news outlet that surprised many: Univision. Apple's top-ranking Latino exec warned viewers of the Spanish language TV network that the FBI's demand for weaker security on iPhones could give investigators new surveillance powers, including in immigration cases. The interview and other recent steps by the world's most valuable company suggest Apple is attempting to frame the contentious battle over encryption with key demographic groups.

Honest dispute: The Honest Co. built its reputation as an environmentally minded alternative to everyday consumer products such as soaps, lotions and cleaning products — winning over fans and media attention with its celebrity co-founder, actress Jessica Alba. But the Santa Monica company's image as a safer brand is being called into question by the Wall Street Journal, which commissioned lab tests that showed Honest laundry detergent contained a harsh chemical the company swore it never used. Honest, which has raised $222 million in private funding, disputes the Wall Street Journal's findings and called the story "reckless."

Focus on diversity: Warner Bros. is preparing to launch a new film workshop for aspiring directors, billing the initiative as a way to boost undiscovered and underrepresented talent amid the outcry over a lack of diversity in Hollywood. The nine-month program, starting this year, will pair five successful applicants with a Warner Bros. executive mentor and take them through the process of making a short film with the Burbank studio. Their films, with a production budget of about $100,000 each, will be screened at a festival on the studio lot. Hollywood has been assailed in recent months for failing to include filmmakers and actors who are nonwhite, female, gay, lesbian or transgender. A recent USC report called the situation an "epidemic of invisibility."

New med school: Kaiser Permanente has selected Pasadena as the home of its new medical school. The Oakland-based HMO giant said it chose central Pasadena because the site is close to major freeways, public transportation options and affordable housing. Kaiser also said the school is within several miles of other Kaiser facilities where students will be trained. The school will be built on land that Kaiser already owns. Groundbreaking is planned for next year, and the first class of students is expected in 2019. Kaiser said in December that its medical school will focus on adopting new technology and adhering to the latest medical evidence in patient care.

Pricey place: Los Angeles is now the eighth most expensive city in the world for tourists and foreign businesspeople, according to a new study. L.A. ranked 27th last year, but is now only slightly cheaper than New York, which ranked seventh on the list of 133 cities compiled by the Economist Intelligence Unit. Singapore remains the world's most expensive place for visitors and expats, followed by Zurich, Hong Kong, Geneva, Paris and London. The three cheapest cities were Lusaka, Zambia; Bangalore, India; and Mumbai. The Worldwide Cost of Living survey, conducted for more than 30 years, looks at prices of 400 goods and services, but does not include the cost of accommodations.



And some recent stories from other publications that caught our eye:

Follow the money: Big banks paid $110 billion in mortgage-related fines. The Wall Street Journal wanted to know: Where did the money go? It then followed the tangled path of settlement cash.

No exit: Apple's App Store isn't for the faint of heart, or so says the Verge. Although it's necessary for software developers, "the App Store itself now resembles a lottery: for every breakout hit like 'Candy Crush,' hundreds or even thousands of apps languish in obscurity."

Simmons, Wayne Simmons: He parlayed a 27-year career as a super-secret CIA operative into a steady role as a Fox News commentator. There was just one problem, as the New York Times Magazine reported: Wayne Simmons' colorful past as a spy may have been an elaborate fiction.

Whither Twitter: Does Twitter have a future? Fortune explores how the social media service is trying to get itself back on track after two years of bumps and bruises. With user growth stalled and its stock down 30% from its IPO, it won't be easy.

Rocket man: To infinity and beyond! Amazon big guy Jeff Bezos has taken the wraps off his space venture, Blue Origin. As the New York Times says, the business will focus on space tourism and selling rocket engines to other companies.


Judge not, lest ye be judged. Yet we have to ask: Does the California Public Employees' Retirement System — a.k.a. CalPERS — have the dullest Instagram page ever? Judge for yourself. Meetings, buildings, meetings, a bus, more meetings.

Do these guys know how to party or what?

For the latest money news, go to Until next time, I'll see you in the Business section.