WASHINGTON — The US Postal Service on Tuesday reported a $5.1 billion loss for fiscal 2011 and warned of more trouble if has to meet obligations to pay into a retiree health benefits program.
The USPS, government-owned but expected to operate on its own financial legs, said the year-end loss would have been $10.6 billion had it not been for legislation that postponed a congressionally mandated payment of $5.5 billion to pre-fund retiree health benefits.
Hit by falling revenues from lower mail volumes and a sizable historical debt burden, the USPS said it remains weak and unable to honor huge commitments to fund its retirement programs.
Revenue fell to $65.7 billion for the fiscal year that ended September 30 from $67.0 billion a year earlier.
The service's net loss dropped to $5.1 billion from $8.5 billion in 2010.
While Congress lifted its need to pay $5.5 billion into the retirement health fund for 2011, the USPS still faces making up that, currently by November 18.
"Unless additional legislation is enacted, the Postal Service will be forced to default on this payment," it said in a statement.
USPS is further obligated to make a similar-sized new payment in fiscal 2012, which it is also currently unable to honor.
Moreover, it warned, even if those commitments are removed, "current projections indicate that we will have a precariously low level of cash and liquidity at September 30, 2012."
"As a result, we would likely not be able to meet all of our financial obligations by October 2012 when we are required to make a payment of approximately $1.3 billion to the Department of Labor for workers' compensation."
In a push for more relief from Congress, postmaster general and chief executive Patrick Donahoe in a statement that the company had to cut annual costs by $20 billion by the end of 2015 to return to profitability.
"We continue to take aggressive cost-cutting actions in areas under our control and urgently need Congress to do its part to get us the rest of the way there."
The Postal Service has been piling up losses since early 2008 due to rising costs and a decline in volumes caused by rising Internet use and e-commerce.
Australian officials ordered protesters inspired by the “Occupy Wall Street” movement to remove their tents from a park in Melbourne’s city center where they have been camping for weeks protesting wealth inequality.
Dozens of officers encircled the Treasury Gardens site this morning as city council officials demanded demonstrators remove any structures, cooking equipment and bedding, protesters said.
The council order “overrides our constitutional right to free speech and public assembly,” Carl Scrase, a spokesman for Occupy Melbourne, said by telephone from the city. Danielle Murnane, a spokeswoman for the Victoria Police Department, said the council had ordered tents be removed from the site.
The Occupy movement began in New York in September and spread to Europe, Asia and Australia in opposition to bank bailouts, public expenditure cuts, arms dealing and corporate profits. Protesters inNew York lost a bid to overturn their eviction from a lower Manhattan park yesterday as police forcibly removed demonstrators.
New York State Supreme Court Justice Michael Stallman ruled the protesters didn’t show “they have a First Amendment right to remain in Zuccotti Park along with their tents, structures, generators and other installations.” The decision may signal a turning point for the nationwide movement as municipal officials seek to curtail sister protests that have sprung up in cities including Oakland, California, Portland, Oregon, and Salt Lake City.
In Melbourne today, about 80 protesters remained at the Treasury Gardens park in “solidarity” with the Occupy movement in New York, Scrase said.
The expansion in China of hotel chains including Hilton Worldwide andHyatt Hotels Corp. (H) may be undermined by low demand as four in 10 rooms sit empty.
China’s occupancy rate was 61 percent in the first nine months of this year, the same as the year-earlier period and the lowest in Asia afterIndia among 15 countries tracked by STR Global, a consulting and research group. In Shanghai, only about half of hotel rooms were filled, compared with more than 80 percent for Singapore and Hong Kong, it said.
The world’s biggest chains have been rushing into China, which overtook Spain last year to become the world’s third-most- visited travel destination after France and the United States, based on United Nations World Tourism Organization data. The number of internationally branded hotel rooms is expected to surge 52 percent by 2013 after rising 62 percent in the past five years, according to Jones Lang LaSalle Hotels, which tracks data in 30 Chinese cities.
“Hotels in some markets of China are clearly oversupplied in the next three to five years, and they won’t be generating good returns,” said Nigel Summers, Hong Kong-based director at Horwath Asia Pacific, which tracks the hospitality industry. “China has had a very strong demand. The question is whether the increase in demand is going to be big enough to handle all the new hotels.”
Hilton said it will have 100 hotels in China by 2014, four times the number of properties it manages in the country now. The company, based in McLean, Virginia, currently has two flagship hotels in Shanghai.