Trans World Airlines Inc. reported Monday its loss before special items nearly tripled in the 4th quarter as higher wage costs and fuel prices weighed on the eight-largest U.S. airline.

TWA, which hasn't reported an annual profit in more than a decade, said the loss before special items widened to $111,7 million, or $1.60 a share, from a loss of $40.3 million, or 62 cents in the same period a year earlier. The loss matched consensus estimates of analysts surveyed by First Call/Thomson Financial, a research firm that tracks such estimates. TWA shares closed unchanged at 2-13/16 Monday after touching the 52-week low of 2-3/4 earlier in the session. Revenue rose to $801.7 million from $747.1 million a year ago.

Like most airlines, TWA was hampered by soaring fuel costs this quarter. But labor contracts signed earlier this year led to $47.7 million in higher labor costs. Also, some of the business lost during the negotiations that resulted in contracts with machinists and flight attendants last year has been slow to return to the airline. "We continue to experience downward pressure on our yields primarily reflecting the slow return of the higher-yielding business traveler due to our labor negotiations in the second and third quarters," William Compton, TWA's CEO said.

Separately, TWA and partners in the Worldspan computer reservations system are considering an initial public stock offering for Worldspan, among other options for realizing value from their investment, Michael Palumbo, TWA's chief financial officer, said in a conference call with reporters. Worldspan is owned by TWA, Northwest Airlines Corp. and DL. Regarding its results, TWA said a transition to newer aircraft helped limit the impact of rising fuel costs in the quarter, and will reduce maintenance and training costs in coming quarters. The company plans to cut even more jobs, mostly through attrition, with a goal of cutting 5 percent from its 21,000-strong work force this year.

Company officials declined to forecast when TWA may earn a profit. The earnings report did not sit well with TWA's pilots. "The pilots view TWA's fourth-quarter results with concern- our careers are tied to this airline and it is disappointing to see that our efforts are not fully realized in these results," said Howard Coldwell, chairman of the TWA master executive council for the Air Line Pilots Association. ALPA represents about 2,500 TWA pilots.

Including special items associated with discontinuation of some European routes, costs related to retirement of some aircraft and other factors, TWA reported a net loss of $271.9 million, or $3.97 a share, in the fourth quarter, compared with a loss of $79.1 million, or $1.30 a share, 1 year ago.

If things continue as they have been, Randy better worry about covering for the Award Miles "insurance" or hope some other airline buys them out and takes over the program.

I am unsure of TWA's problems. They must sell a lot of discounted "cheap" tickets as their flights are usually full. This could be a real drag on the Midwest flying. Of course, it could really help out Southwest.

What does happen to miles in the case of an airline going out of business? TWA has terrible redemption partners if I remember correctly. Should i start booking award travel now?

Charles

Charles,

If you are concerned about your TWA miles you can dump them at any time into Hilton's program (and you don't lose much on the transition as long as you don't them move them back to miles in another carrier). However, people have been predicting TWA's demise for 10 years now, and they continue to survive.

Freakflyer

Thanks for the tip. As someone who flies TWA quite a bit, I can only side with those who think the demise is inevitable.

Hello Hilton.
Charles

TWA reported $180.4 million in the bank as of 12/31/99. They had $252.4 million as of 12/31/98. The danger for TWA has always been running out of money. I read somewhere that if an airline's cash reserves fell below $75 million, they were bascially out of business. I think TWA has been in worse shape than $180 million in reserves, so I don't think it is time to panic yet, agreed? I have a ton of FFB miles that I don't want to lose, but having a bunch of Hilton points doesn't excite me vs. having TWA miles if they were to merge with an airline with a good route structure (exciting destinations.) Any comments?

[This message has been edited by Paul3456 (edited 02-07-2000).]

Paul,

That's my analysis, too, and I'm sitting on about a quarter million TWA miles (and still accumulating). I hope we're right.

Just transferred mine to Hilton on Friday.

Good luck. I wonder who could/would buy em out?

Charles

You make a good point because everyone has pretty much aligned with someone by now. With the downsizing of their aircraft and their strong Europe routes, they are a good fit for an Asian carrier. Would anyone want them? Probably not yet, but they look a lot more attractive than they did a couple of years ago. They will have a very new fleet soon and their fuel and maintenance costs will be cut drastically. Let's hope they can survive until then.

2 years ago I stopped flying TWA. I was flying them about 18 to 20 times a year. I had a bad experience and wrote customer service, they never responded. So, I wrote the CEO. Still didnt get a response. I then wrote the CEO again, attaching a copy of my Continental ticket(for a NY to STL flight) in which TWA's price was less.

TWA walked away from my business, I guess they didn't think they needed my money.

Looks like they were wrong.

There would be no sane buyer for TWA within the industry. Because of open skies and its sale of its LHR routes it has no international routes of value. Its restricted slots at ORD JFK and DCA are only worth so much. There are plenty of midwest hubs, and STL already has LUV there. It would be a lot cheaper to move in after it collapses. Admittedly, I've been waiting eight years for this.

To Charles: It seems that Latin Pass members that want to transfer a large number of miles to Hilton must make repeated calls to the LP service center because the maximum that can be transfered at any one time is 30,000. I was wondering, when you transfered your TWA miles to Hilton did they let you do it on one call or did you have to make repeated calls to the FFB desk also? Thanks.

Actually I only topped off my account, transferring 30,000 to get an award I needed. So I am unsure how easy it would be transfer multiple groups of 30,000 miles. Transfer took about a week, not bad....
Charles

"Earnings" out today do not paint a pretty picture. Very light traffic over New Year's period and rising fuel costs resulted in a wider first-quarter loss at TWA. TWA posted a net loss of $76.1 million or $1.16 a share versus $21.6 million or 42 cents a share in the same period a year ago. Revenues rose to $809 million from $765 million.

"Like our competitors, TWA also was heavily impacted by increased fuel costs in the quarter,'' said President William F. Compton said. ``However, we recently have seen improvement in our revenue, including improved yield, largely due to more efficient utilization of our revitalized fleet and changes in our route structure."

Passenger revenue, which accounts for the vast majority of the company's revenue, rose to $723.6 million, up from $681.1 million in the first quarter last year. But TWA's fuel costs rose to $140.4 million, up from $72.6 million last year.

TWA, with hubs in St. Louis and at JFK, has NOT turned an annual profit since 1988. In 1999, TWA lost $353.4 million, or $5.58 per share.

http://www.flyertalk.com/forum/frown.gif

It is still not yet time to panic. TWA's cash on hand on 3/31/00 was $165.1 million, down from $180.4 million on 12/31/99. The 1st quarter has always been TWA's worst of the four, and unless their cash on hand drops below $75-80 million there still seems hope for survival.

[This message has been edited by Paul3456 (edited 04-19-2000).]