Western Air Express began operations in April, 1926 with a fleet of six open-cockpit, two passenger Douglas M-2 biplanes and a contract to fly one air-mail round trip from Los Angeles to Salt Lake City.
Transcontinental Air Transport, Inc.(TAT) was proclaimed “the Lindbergh Line” and incorporated in May 1928 by a group of well known financiers and transportation experts who believed that public acceptance of air travel was close at hand. Colonel Charles Lindbergh was named Chairman of the TAT Technical Committee with the hope his name would attract more financing and business.
Brave indeed were the passengers during that beginning era. Tragic accidents occurred during these early years of aviation history. Even the uneventful flights caused passengers' ears to ring and stomachs to churn. If an airline made money, and few did, the profit came from airmail subsidies and not passengers. Changes came in 1930 from an unlikely source, the Postmaster General Walter Folger Brown. He thought the nation needed airlines that carried more people than mail. He summoned airline chiefs to Washington and offered them a deal. If the airlines would merge into units big enough to make economic sense, the government would give them a lock on cross-continental routes. After some tough compromising, three big transcontinental lines emerged.
1. On the central route through St. Louis, TW&A formed on October 1, 1930 when Transcontinental Air Transport and Western Air, Inc.merged.
2. On the northern route through Chicago, what became United came into existence.
3. On the southern route through Dallas, what became American was formed.
4. The north-south routes along the Atlantic Seaboard went to a fourth amalgamation, Eastern.
In April 1934 the airline became TWA, Inc.
Collectively these airlines became The Big Four. Pan American had a monopoly on intercontinental routes. For almost half a century these five had the sky almost to themselves.
A TWA crash put the government into the airline business in a big way. On May 5, 1935, a TWA DC-2 went down near Kirksville, Mo. The crash killed six people, including U.S. Sen. Bronson Cutting of New Mexico. TWA’s crashes tended to be doubly ugly, because many involved well-known people: Notre Dame football coach Knute Rockne in 1931 and Hollywood actress Carole Lombard in 1942. But Cutting was more than well-known. He was also well-loved by his colleagues in Congress. His loss so upset the lawmakers that they set up what became the Civil Aeronautics Board. For the airlines, the CAB served as both Big Daddy and Sugar Daddy.
The CAB was Big Daddy when it told the airlines what they could do, where they could fly, the frequency of their flights, what fares they could set and what steps to take to ensure safety. It was Sugar Daddy when it set fares high enough to keep the airlines in business, no matter what. The airlines became, in effect, public utilities with the Big Four on top. With profits all but guaranteed airline managers didn’t have to be astute in the ways of business. The airlines had room for colorful characters like TWA’s Jack Frye, a brash pilot, who took the TWA presidency in 1934.
Frye preferred the cockpit to the boardroom and spent as much time as he could at the controls of TWA’s DC-3s, the most popular aircraft in air travel in the mid-1930s.
But Frye had his mind set on something bigger, the four-engined Boeing Stratoliner. By today’s standards that plane looks bulbous, almost cartoonish. But in the late ‘30s, only the pressurized Stratoliner could lift TWA’s passengers above the bumpy weather that the DC-3s had to bull through.
The financial people to whom Frye answered balked at buying Stratoliners. There is a question whether Jack Frye approached Howard Hughes or Howard Hughes Approached Jack Frye. What came next was Howard Hughes buyingh up TWA stock. On August 26, 1940, Howard Hughes owned enough stock to obtain a controlling interest in TWA.
For better or for worse, TWA would never be the same.
The Horizon Widens
Hughes had in mind something grander than the Stratoliner. He envisioned a four-engined airliner that could cross America nonstop at unheard of speeds high above the weather.
Lockheed Aircraft was appraoched and they agreed to design an aircraft to the specifications of something to his specifications. The result was the Lockheed Constellation, a triple-tailed airliner whose streamlined curves lent it an almost feminine grace.
The Constellation became known as “the Connie” to a generation of pilots and came to symbolize TWA and Hughes. But in the end the Connie would just about bring down TWA. Before Lockheed could tool up to build Connies for TWA Pearl Harbor intervened. The Army Air Forces commandeered Connie production which finally got under way in 1944.
On April 17, 1944 Frye and Hughes flew the prototype Connie from Lockheed’s plant in Burbank, California to a bunch of eager generals in Washington DC. The Connie touched down in the record time of 6 hours and 58 minutes.
As it taxied past the waiting newsreel cameras the generals turned purple with rage because Hughes had painted the Connie, which he didn’t own, in the red and white livery of TWA and not in the olive drab of the Army Air Forces.
The Army controlled all of TWA’s four-engined fleet and just days after Pearl Harbor, Frye put the airline’s fleet of Stratoliners at the Army’s disposal.
The Stratoliners flew passengers around the globe for the Army with TWA pilots in the cockpits, TWA mechanics servicing the planes and TWA dispatchers doing the planning.
After the war Frye’s patriotism paid off big. All that overseas flying for the Army gave TWA the experience it needed to spread its wings internationally. Even before the war ended TWA put in for a piece of the postwar pie. In 1943 Frye applied for a batch of new routes including London and Paris.
On July 5, 1945, overseas routes were awarded to TWA. On February 5, 1946, TWA began scheduled international service with Lockheed Constellations.
In so doing TWA trod on the toes of Pan Am and its aristocratic chief Juan Trippe. Before the war Pan Am stood alone among America’s airlines in flying across the Atlantic and now it hardly welcomed competition. But if Pan Am had to make room Trippe said he’d accept competition from tiny American Export Airlines. Trippe didn’t know that tiny American Export was merging with giant American Airlines. In 1944 Trippe got the bad news that TWA and American would join Pan Am in spanning the postwar ocean. Trippe pulled all the strings he could in Congress but to no avail.
On Feb. 5, 1946 the first international flight dubbed “The Star of Paris,” a TWA Connie, lifted off from New York’s LaGuardia Airport destined for Paris via Gander and Shannon. Although American soon pulled out of international service TWA stayed the course. TWA continued to expand international service with inaugural flights to Rome, Athens, Cairo, Lisbon and Madrid during the spring of 1946.
TWA was now a major domestic and international air carrier. In 1947 TWA offered the first scheduled transatlantic all-cargo service. On October 30 1955 they put Super G-Constellations into international service from Los Angeles to London.
TWA got a boost from its domestic routes which fed passengers to its transatlantic flights while Pan Am was limited to international flights. Pan Am thought of itself as America’s sanctioned overseas flag carrier and it stuck up its corporate nose at foreign officials and airlines. TWA behaved differently, pitching in to help foreign airlines get off the ground. With their attitude of helping TWA won good friends and a good reputation. In 1950 TWA changed the “W” in its name from “Western” to “World” as befitted its new span.
The Downside of Glamour
At home, thanks to Hughes’ Hollywood connections, TWA developed the reputationa as the glamour airline. When the Hollywood movie stars flew they tended to fly TWA. The airline’s press agents made sure the newspapers got pictures of the rich and famous boarding TWA’s Connies. Hughes vexed his dispatchers by holding flights until dawdling stars could arrive. Big-time Hollywood columnists like Hedda Hopper and Louella Parsons received red-carpet treatment with TWA limousines toting them to and from airports.
Publicity like that attracted hordes of first-time fliers to TWA. Most were well-heeled vacationers who could afford the steep fares of the postwar era. But the glamour image had two big drawbacks. First most of TWA’s routes ran east and west which was fine for summertime vacationers but weak in the winter when vacationers head south. Before long TWA began bleeding financially each winter. This became a chronic condition up to the end. Second the business passengers could have taken up the winter slack but they tended to shun glitzy TWA. They wanted steady, sober service. They wanted the kind of service they associated with United and American. While TWA flew stars its rivals snared the most desirable passengers, the full-fare, frequently flying executives.
Hughes Interests: Airplanes-TWA-Girls
When Hughes died on April 5, 1976 he had long been a recluse in Las Vegas. He had become an emaciated, physically ill, paranoid individual worth about $2 billion, much of it from the sale of his TWA stock in 1965. In the obituaries, his eccentricities overshadowed his accomplishments. As a teen he had inherited his father’s fabulously successful Hughes Tool Co. He rode it through the oil booms that followed and invested part of his profits in Hollywood. There he made some movies daring in their scope like “Wings,” an aerial epic made in 1930 and “The Outlaws,” a 1940s Western (Hughes invented the WonderBra for Jane Russell tyo wear as she starred in this movie.). But airplanes remained Hughes’ first love and in the 1930s he designed and flew a string of record-breaking speedsters that put him on Page One across the nation.
And it was a plane of his own design that would put Hughes on the path to his bizarre end. While developing the XF-11, a recon plane, Hughes crashed the prototype in Beverly Hills in July 1946. He came close to dying and before long Hughes withdrew from public view. Although he owned a controlling interest in Hollywood’s RKO, he ran the studio from afar and seemingly by whim. This whimisical trait in controlling TWA would become wearily familiar to his underlings at TWA.
Hughes never held a corporate position at TWA. He didn’t have to because he owned the company. But his meddling exasperated TWA’s executives who tended to quit in frustration. Historian Serling called Hughes “the George Steinbrenner of commercial aviation, a well-intentioned owner who picked capable managers and then drove them crazy.” Take Carter Burgess, TWA’s president in 1957, the year Hughes decided to “borrow” a brand-new Super Constellation. With a co-pilot and a flight engineer conscripted from TWA’s ranks Hughes took off in June for a brief test flight to Montreal.
Six months later, Hughes still had the plane, gallivanting around the Caribbean at the controls. Burgess implored him to return it so TWA could put it to productive use. Hughes refused, whereupon Burgess quit. Hughes hardly cared; as his flight engineer Bill Bushey later recalled, “I gathered from that long time with him that he liked three things, airplanes, TWA and girls.” Trouble is, he liked the wrong kind of airplanes.
A Bad Case of Jet Lag
In 1952, Hughes spurned an invitation to buy the first jetliner, the British-made Comet. “It isn’t safe,” he said and it wasn’t. A string of disastrous Comet crashes bolstered the public perception of jets as unsafe.
Boeing stood on the brink of changing all that. In 1954 Boeing flew the prototype of a military tanker also designed as a jetliner, the 707. Hughes was having none of it because he had played no part in designing the 707. The planes he worried most about were the propeller-driven Douglas models flown by American and United. In 1955 Hughes committed TWA to buying 25 upgraded Connies, easily a match for the Douglas prop planes flying in the colors of United and American.
Shortly after Hughes signed the Connie contract, rival Pan Am ordered 707s. The jet age was under way and TWA had already been overtaken by other airlines upgrading to jet aircraft.
TWA would be the last of the Big Four to switch totally to jets. In 1958, three years too late, Hughes woke up to the inevitability and finally ordered more than $400 million worth of jetliners and engines. By that time the boom-or-bust nature of the airline business meant he really had no money to pay for them. TWA entered the jet age when it took delivery of its first 707 in January 1959. Convair 880 jet service began on January 12, 1961 to serve TWA’s domestic routes.
In 1959 after some financial sleight of hand from Hughes TWA started flying its first jet on the San-Francisco-New York route. For one month that lone 707 constituted TWA’s entire jet fleet. Long after its rivals were whisking passengers about on jets TWA was chugging them along in Connies. Not until 1967 did TWA retire its last Connie after a flight on April 6 from New York to Lambert Field. Hughes, perhaps with dreams of a Son Of Connie, approached Convair with an idea for something different, a smaller jetliner called the Convair 880. The concept was right but the airplane wasn’t. Hughes’ meddling made the 880 even more of a financial drain on TWA as well as on Convair. The airline’s lenders finally got to TWA’s board and TWA’s board finally got to Hughes. On Dec. 29, 1960 he put his stock into trust and abdicated his reign over TWA’s operations.
From Gold to Doldrums
In many ways the 1960s were a Golden Age of air travel. The airlines zipped past the railroads as a mass mover of Americans who delighted in jet-engine speed and jetliner luxury. In fact luxury was how the airlines competed. Government barred them from competing on fares, so they competed on frills which included in-flight movies, free cocktails, and nubile stewardesses in leggy uniforms. For the most part the airlines served an elite clientele. High fares shut out low-end travelers. In the 1960s flying was a coat-and-tie affair. But it couldn’t last and it didn’t. In fact the system was already falling apart in America’s two largest states, Texas and California. There the small airlines flew strictly within state borders and thus beyond the CAB’s regulatory reach.
These airlines (Southwest was one) could and did compete on fares. Some people in government began to think of price competition as a way to strip away the elitism attached to air travel. Washington heard a new buzzword: “deregulation.” Massachusetts Sen. Ted Kennedy picked it up as an issue and in 1977 President Jimmy Carter handed the chairman’s chair at the CAB to a believer in deregulation, Alfred Kahn.
On June 30, 1961 Howard Hughes’ control of TWA was challenged when Charles Tillinghast, Chairman of the Board of TWA filed suit against the Hughes Tool Company for violations of the Sherman Act and the Clayton Anti-Trust Act. A default judgment was issued against the Hughes Tool Company for failure to produce Howard Hughes for pretrial examination. In 1966 Howard Hughes and the Hughes Tool Company lost control of TWA and the airline became a publicly owned company.There were numerous other lawsuits to come over the years dealing with the ownership and control of TWA including a $35 million settlement received by Carl Icahn in 1993.
During April 1964 the first of sixteen 727’s were delivered and s hortly thereafter twenty DC-9’s were ordered. Twelve 747s were ordered in 1967; the $410,000,000 order was the largest in the carrier's history. After three decades of service the last of the Constellations were retired and TWA then became the first all jet airline. On August 1, 1969 TWA inaugurate d transpacific and round the world service.
After United broke ranks with the industry and endorsed deregulation, Congress went along. In 1978 deregulation became the law of the land. TWA was woefully unready. The 1960s had been flush times. TWA led the industry in profits in 1965 and it branched out as TW Corp., a holding company for hotels and restaurants as well as planes. For a few brief, shining years in the 1960s TWA even went truly “trans world,” spanning the Pacific as well as the Atlantic. But tough times arrived in the 1970s when TWA began accepting deliveries of jumbo-jet 747s that it couldn’t fill with passengers. TWA became the first airline to introduce 747 schedules non-stop service from Los Angeles to New York on February 25, 1970.
At first deregulation did what its backers hoped it would do. It lured new airlines like People Express into the game and slashed fares. But gradually TWA’s old-line rivals came up with ways to fight back.
1. Computerized reservations systems. Not only did the computers streamline ticket sales, they also gave airlines like American and United a mother lode of data on who flew where on what days, at what time and how often.
2. Yield management pricing. Using the computer data American pioneered the tactic of selling different seats on the same flight for wildly different fares. Tourists who booked early could fly cheaply while expense-account executives who flew at the last minute paid full fare. The computers let the airlines pinpoint how many seats to sell at which fare except at TWA, which was late going online. As investment analyst Brian Harris put it in an interview with Reuters, “TWA had a guy with paper and a pencil.”
3. Frequent-flier programs, to mollify the executive paying full-fare to sit beside a hippie flying for half the price. Again, others led, while TWA followed.
4. Two-tier wage scales which paid new employees of old-line airlines the same lower wages that upstarts like People’s Express were paying. American pioneered; TWA again lagged.
5. Hub “fortresses” in which an airline dominates a “hub” city with flights to and from “spoke” cities. True, TWA snagged St. Louis in the 1970s but other airlines ran multiple hubs out of bigger-wheel locales like Chicago, Dallas and Atlanta.
6. Inland starts for international flights. For example American could fill a twin-engined 767 for a European flight with passengers at such central cities as Dallas. TWA relied on its international passengers to endure the hassle of changing planes to board a jumbo 747 at New York’s Kennedy Airport.
7. New and more efficient planes. Gradually TWA’s fleet aged into the oldest flown by any major airline. The planes were safe enough but the fuel and maintenance bills grew ever more frightful. In 1983 TW Corp. decided to spin off its ailing airline. The value of TWA’s stock sagged below the airline’s net worth and the wolves began to gather.
On January 1, 1979 Trans World Airlines, Canteen Corporation and Hilton International had formed the parent company named Trans World Corporation. TWA was spun off by the parent corporation in February 1982 and became a separate entity. Although TWA’s money was used to purchase Hilton Hotels, Canteen Corporation, Century 21 and others, when the airline was spun off the money was never returned to the airline. At this time the airline was loosing money and Ed Meyer became Chairman of the Board.
In November, 1984 Ed Meyer attended a symposium in Los Angeles hosted by Drexel Burnham. In attendance at that symposium was Carl Icahn and Meyer made a presentation regarding the fact that TWA was undervalued as a corporation. Immediately Icahn began buying TWA stock and Ed Meyer then got Frank Lorenzo to attempt to take over TWA. The unions joined forces with Icahn in order to block Lorenzo. The choice was between bad and worse ; Icahn being bad and Lorenzo being worse.
On September 26, 1985, Carl Icahn acquired controlling interest in TWA. On October 26, 1986, TWA acquired Ozark Airlines and merged Ozark into TWA operations. Icahn took the company private on September 7, 1988. When Icahn sold the London route authorities to American Airlines, District 142 challenged the sale. The DOT, however, approved the sale with the exception of the St. Louis-Gatwick and Philadelphia-London authority which Icahn later sold to USAir for $50 million.
Icahn Takes the Controls
As the wolves began gathering Frank Lorenzo stood first in line. He had started with tiny Texas International and then grabbed up Continental and later Eastern. Lorenzo flew Continental into bankruptcy on purpose so he could void its union contracts.
TWA’s executives knew that some corporate raider would grab TWA and they leaned toward Lorenzo. Their reasoning was that unlike the other raiders Lorenzo was at bottom an airline man. He’d treat TWA as an airline and not as a Christmas tree laden with candy-cane assets to pluck off. But TWA’s unions dug in their heels. Anybody but Lorenzo they said. They got Carl Icahn. In fact they all but seduced Icahn by offering him alone contract concessions. In return corporate raider Icahn promised to keep TWA intact, promising to grow it with new airplanes.
Icahn filed for reorganization under Chapter 11 of the Federal Bankruptcy Code on January 30, 1992. On November 3, 1992, TWA emerged from bankruptcy with $1.8 billion in debt, most of which was secured with TWA’s assets. Six months later, the Creditor’s Committee announced an agreement with the three unions: IAM, IFFA, and ALPA for concessions in exchange for equity in the airline.
But soon enough the workers soured on Icahn who was in fact a corporate raider in it to make a huge profit no matter the tactics. In the early spring of 1986 his flight attendants struck. Icahn simply hired low-wage subs. For several months the newcomers learned on the job, bumbling their way through. Icahn loved it; after all, the newcomers cost less. He never seemed to care that above all else what an airline sells is its service. TWA lost its reputation for excellent inflight service during this long strike. Icahn moved TWA corporate headquarters to Mt. Kisco, NY which was close to his home.
On December 31, 1985 District Lodge 142 reached an agreement with Carl Icahn establishing the first ESOP wherein the employees would own 15% of the company and the Icahn group would own 85% of the company . Once again TWA was first , this was the first ESOP in airline history. The agreement was made possible by the assistance of General Vice President John Peterpaul and Grand Lodge Representative Tim Connolly.
Icahn made war on his own workers and in turn the workers took it out on the only people they could, the passengers. Abroad a string of terrorists targeted TWA, long a symbol of the United States. Passengers started to shun TWA.
One flight is largely like another with the only thing setting them apart is the level of service provided. A fumbling flight attendant or a surly ticket agent can bleed an airline of passengers.
But in the short run Icahn made money. Early in 1988 he boasted that he had turned TWA around. In reality he invested none of the profits in airplanes except for the 50 small jetliners he picked up when he merged plucky little Ozark Air Lines into TWA in 1986 giving himself a lock on the St. Louis hub. What Icahn did was move money around with the slick sleight of hand that gave the 1980s such a bad name. In the end he would claim that he lost millions on TWA but many would insist that he drained TWA to invest in other ventures and then walked away with hundreds of millions. The bottom line was that Icahn loaded TWA with debt with the interest payments alone the big killer of what was left of TWA.
When the balance sheet slumped Icahn horrified TWA’s unions by selling off prime assets in the form of gates and landing slots at Chicago’s O’Hare. He sold off the priceless routes to London’s Heathrow Airport, the hub for much of the world. In 1992 after TWA filed for a prepackaged bankruptcy the airline came close to collapse. Pilots and machinists averted it by coming to terms with TWA. But as part of the deal Icahn had to go. He cashed out early in 1993 leaving the airline in the hands of its creditors and its employees. U.S. Sen. John Danforth, an old foe of Icahn, hailed the change by saying, “People who believe in the airline are going to be running the airline. You really respect them for what they’ve endured and the spirit that is theirs.”
As for Icahn, aviation writers Barbara Sturken Peterson and James Glab summed him up this way in their book Rapid Descent, “He lurched from one idea to the next, with little regard for their eventual impact on the company. Under regulation, Icahn might have been saved from himself. But a regulated airline would have held no interest for the likes of Icahn.”
Carl Icahn resigned as Chairman of the Board and relinquished all control and interest on January 8, 1993. T he employees owned 45% equity and creditors owned 55% of the airline when it emerge d from reorganization on November 3, 1993.
Ascent and Descent
The new employee-owners had their work cut out for them. As investment analyst Glenn Enge told the Associated Press, “The brand name TWA is well-known but that doesn’t mean it’s well-liked.” Still, TWA workers started smiling in front of the passengers again. They had some good reasons to do so.
The company packed up its papers and moved its headquarters back to St. Louis from Mount Kisco, N.Y. In November 1993 the company emerged from 21 months of bankruptcy with its debt load a lot lighter. In March 1995 23 businesses in the St. Louis area kicked in millions in advance for 110,000 TWA tickets which was a vote of confidence in St. Louis’ new hometown airline. That summer TWA boosted its daily departures from Lambert Field to 348, a record. Another carefully planned trip into bankruptcy lasted only eight weeks, ending in August 1995. Early in 1996 TWA announced plans to obtain new Boeing 757 jets, a step officers hailed as a signal that the lean years were behind. It came to a head on July 17, 1996. That’s when the company proudly announced a profit of $28.5 million for the second quarter, its best showing since 1989 and a sign of better times to come. A few hours later, a TWA 747 went down in flames. So did the optimism. The plane, Flight 800 bound for Paris, blew up off Long Island, shortly after taking off for Paris from New York’s Kennedy airport. All 230 souls aboard perished.
Was it a terrorist bomb? An antiaircraft missile? A structural failure? Months of investigation pinpointed the central fuel tank as the site of the blast but failed to pin down a cause of the blast. Some people began to wonder whether TWA would suffer the fate of Pan Am. Shortly before Christmas in 1988 a terrorist bomb blew a Pan Am 747 out of the sky over Lockerbie, Scotland, killing 259. Before long Pan Am folded. The loss of Flight 800 jarred TWA’s corporate structure. Three months after the plane went down Jefferey H. Erickson said he was quitting as the airline’s president thus continuing the managerial merry-go-round.
Within days TWA announced that it had lost $14.3 million in the year’s third quarter, the only major airline to post a loss. The bad news bled over into the new year. In January 1997 the airline cut way back on domestic flights out of Kennedy, suspended service from New York to Frankfurt and Athens, and said it would ground many of its 747s. The surgery pained its pride but TWA said its international operations out of Kennedy were draining the profits run up by its domestic operations in St. Louis.
TWA pride took a few more painful hits in short order. Tiny Transaero, a Russian airline with a handful of planes, said it was considering buying TWA. For the third straight year Fortune magazine listed TWA as “least admired” among 431 corporations.
The Final Chapter
For a time TWA seemed to shed drag and gain lift. The company put its creaky fleet of jumbo jets out to pasture. Brand-new jets, smaller and more efficient, started flying in TWA’s brand-new paint scheme. Starting in 1997 TWA watched the clock more closely. From way back in the herd TWA jumped to the top as the industry leader in on-time arrivals. Newspaper stories regularly quoted airline analysts as saying that TWA had taken off and was headed in the right direction. But like Flight 800 TWA never finished the trip.
Among the Bugaboos
Competition from ex-owner Icahn. As part of his buyout deal Icahn got the right to buy big blocks of TWA tickets at wholesale and sell them at retail. Not only was the deal a running financial wound it also gave TWA the shabby image of the poor man’s discount airline. Confusion over what kind of airline TWA wanted to be ensued. For a time TWA courted high-end business travelers with a passion by initiating a business class service but the strategy fell short. TWA’s sudden affection for the high end priced out many of the low-end leisure travelers who usually filled so many seats. At the same time high-end travelers remained wary of TWA. They tended to stick with airlines that had multiple hubs and thus better connections. There were diverging flight paths for costs and revenue and try as it might TWA could never bring its glory-day costs in line with its sorry-day income. A poor credit rating meant that TWA paid dearly for its aircraft leases and couldn’t afford the hedge contracts that let other airlines ride out upward spikes in the price of fuel.
TWA went into 1998 hoping to turn a profit no matter how paltry. After all, other airlines were enjoying a record year. But TWA lost $120 million, its 10th straight year of red ink. Some airline analysts said TWA could muddle through. They likened the airline to a homeowner with a second mortgage and a heavy credit-card debt. Although he’s in trouble, in the long haul he can keep his head above water for now if he can stay current with his bills. Others were less chipper. After the 1998 numbers came in another analyst said, “We’ve just had the two strongest years ever in the airline industry. They shouldn’t have had a loss of this magnitude.” It couldn’t go on. After United Airlines cozied up to US Airways in a merger deal, the sky darkened for marginal operators like TWA which had by now become America’s eighth-ranked airline. TWA President Bill Compton spoke bravely in June of the airline’s fixing itself. But just about that time, fuel prices bumped up again.
By year’s end, the stock market had lost all faith in TWA with the share price falling to $1.02, down about two-thirds from where it had started the year.
The news that American Airlines would swallow TWA was marked by sadness but not by surprise. TWA had probably flown on longer than market economics gave it the right to thanks largely to all the employee sacrifices at contract time.
Now the red-and-white birds and the proud name would disappear, just like Eastern, Braniff and Pan Am. TWA ceased flying under American Airlines as an LLC on July 1, 200