AA Acquisition Set to Close Today

 
Old Apr 9, 01, 8:32 am
  #1  
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AA Acquisition Set to Close Today

Sunday April 8, 2:30 pm Eastern Time

TWA-American Deal Set for Completion

By MATT CURRY
Associated Press Writer

DALLAS (AP) -- The sale of Trans World Airline's assets to the parent company of American Airlines is expected to close Monday, making the Fort Worth carrier the largest in the world -- for now.

The move puts the final touch on a ``bold stroke'' by American chief executive Donald J. Carty, said John Hotard, spokesman for the Fort Worth-based airline.

AMR Corp. will pay $742 million, pending a U.S. Bankruptcy Court's approval, for TWA, plus the assumption of $3.5 billion in debt.

All potential roadblocks to the deal were lifted last week with the end of court action pursued by former TWA creditors, including former TWA chairman Carl Icahn.

On Friday, U.S. District Judge Sue Robinson denied the creditors' request to delay the sale. An appeals court on Saturday also denied the creditors' request, TWA officials said. Regulatory approval was granted Friday by the U.S. Department of Justice.

American, the No. 2 carrier before the deal, will swap positions with No. 1 United Airlines. American's newfound supremacy could be short-lived, though. The airlines will reverse positions again if United succeeds in its bid to obtain most of US Airways.

``Today, the name of the game in this industry is size of network,'' Hotard said, ``and the TWA acquisition helps American in this endeavor.''

Consumers aren't likely to see major changes in the immediate future, said Tom Parsons, airline observer and chief executive of Bestfares.com, who predicted that St. Louis-based TWA discounts would continue.

``They've got to fill up those planes,'' he said.

Meanwhile, travelers who use Dallas-Fort Worth International Airport will likely see a reduction in the number of flights to St. Louis and Chicago.

``I don't think American will change much that TWA is doing until they get a chance to go in there and get their hands on the books,'' Parsons said.

Hotard said the acquisition gives American more options.

Besides suddenly making American the industry leader, the deal presents the airline with a number of operational and merger-related challenges, said Julius Maldutis, airline analyst at CIBC World Markets.

Among the obstacles are labor problems.

Leaders of American's three unions are withholding support for the purchase because they fear the difficulty of absorbing TWA's workers could cause turmoil.

In a recent letter to Carty, leaders of the unions representing pilots, flight attendants and mechanics said the airline should focus on improving benefits for its employees instead of acquiring TWA.

``It isn't working when he's focusing on everything but his employees,'' said Association of Professional Flight Attendants spokeswoman Leslie Mayo.

But TWA's unions, including the International Association of Machinists and Aerospace Workers the Air LIne Pilots Association have agreed to the sale to AMR.

TWA, based in St. Louis, was formed in 1930 from the merger of Western Air Express and Transcontinental Air Transport. That same year, the combined company became the first airline to offer coast-to-coast air service.

Movie mogul Howard Hughes once owned a controlling interest in TWA. In its prime, TWA was the airline of choice for the rich and famous. Joe DiMaggio made flights west on TWA to visit wife Marilyn Monroe in Hollywood. Four times, the pope flew TWA on visits to the United States. It was the first to offer nonsmoking sections on all aircraft.

But TWA had not posted an annual profit since 1989. Three years later, it filed for Chapter 11 bankruptcy protection, the first of three times it would do so. The last was on Jan. 10, the day the merger with American was announced.

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Old Apr 9, 01, 10:56 am
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Not so fast, "Court stays TWA-AMR deal":

http://dailynews.yahoo.com/h/nm/2001..._twa_dc_6.html
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Old Apr 9, 01, 12:38 pm
  #3  
doc
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A U.S. appeals court on Monday withdrew a stay order which had temporarily held up the proposed $742 million purchase of Trans World Inc. (TWAIQ.OB) by AMR Corp.'s (NYSE:AMR - news) American Airlines.


http://www.flyertalk.com/forum/Forum71/HTML/003168.html

For more than a decade, Trans World Airlines had survived because of its employees.

Time and again, they took pay cuts, gave back benefits and stock, and worked at far less than the prevailing wage, simply to keep the historic company airborne.

On Monday, thousands of them gathered at a hangar at the airline's Ground Operations Center to say goodbye to TWA, hours before a buyout by the parent company of American Airlines was completed.

``American Airlines is not just buying slots and gates and hangars. American Airlines is acquiring our greatest asset -- the TWA employees,'' said TWA chief executive Bill Compton.
http://www.nytimes.com/aponline/busi...A-The-End.html


``It's done, the deal's closed,'' said TWA spokesman Mark Abels. ``We feel great. This is a great solution for TWA.''

At a party at TWA's home hub airport in St. Louis, thousands of workers cheered the deal, Abels said, which saved them from an uncertain future with financially ailing TWA. http://www.nytimes.com/reuters/busin...lines-twa.html



[This message has been edited by doc (edited 04-09-2001).]
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