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To Aviation Valhalla: The Merger of TWA and American

By Nicholas Everage
March 20, 2001

With the Federal Courts approving its enormous bid, American will soon acquire TWA, making it a veritable aviation giant. But, with sadness in our hearts, we send another airline great to its high place in aviation history.

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TWA L-1011 tail at LAX
Photo © Ted Quackenbush


A wave of grief and dread floods over my body, as news of a takeover of TWA by American Airlines flashes across the news wires. At first, sources from the involved companies hide behind statements denying such plans of a colossal merger. But, with time, both companies find the need for truth and unveil a blueprint to merge the two into a veritable giant. Now, following much rigmarole and multiple competing offers federal courts have cleared the way for TWA’s bankruptcy plan and acquisition of its debt and assets by AMR, American Airlines’ parent group. We stand here today to bid farewell to a hallmark of airlines, Trans World.

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TWA Boeing 747 from the mid 70's.
Photo © Paul Robinson


For me, the news of the death of the TWA name was striking. Not two weeks before the initial merger rumors, I flew on TWA heading home for the holidays. Through a soft snow shower I sat on the tarmac at Lambert St. Louis International, staring at a line of parked 757s and MD 80s. I toyed with a pessimistic thought: "What if TWA were to be taken over tomorrow? Who would take them? Delta? American?” Of course, I dreaded any such transactions. But, then again, would TWA’s recent move to share frequent flier miles with America West suffice the airline industry’s insatiable need to amalgamate business? Conventional wisdom of “Industry Analysts” had stated that mergers would be the wave of the future; an inevitable truth, it seemed, especially in the wake of the United/US Airways proposed venture. Nonetheless, as I sat on the tarmac in St. Louis, I sadly recognized that few thought TWA would merge with another leading airline; most thought it would die first. Commentators galore spoke of TWA’s imminent death as “around the corner” and “within shadow’s loom.” But the airline, with its lone St. Louis hub for its national and international network, managed to annoy the naysayers, sneaking by death with, revived on-time records and increased passenger traffic. But, how does an airline elude death, improve its service, attract more customers, and still fail? In this case, one person held the proverbial last drop of water and he chose not to serve it: Carl Icahn.

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L-1011, 727 and 747 at the TWA hangar at LAX.
Photo © Ted Quackenbush


Icahn bought a controlling interest in TWA in 1985 and took the company private in 1988. His shoddy business practices (he sold TWA’s prime New York to London routes, ironically, to American for a meager amount in the early 1990s) helped lead to monumental levels of debt and forced the airline to file for bankruptcy in 1993. Soon after that mess, Icahn resigned as Chairman of the company.

But, as a part of his severance, Icahn engineered the infamous 1995 Karabou Contract. This “pact” enabled him to buy TWA tickets for $.55 on the dollar through 2003 in exchange for a hefty loan to finance TWA debt. Hence, on most TWA flights, Icahn could buy and then sell a sizable portion of the available seats, leaving TWA to pay for its operating cost with the revenue accrued through the sale of any remaining ticket sales. In other words, TWA was flying customers who were not paying them, but someone else. This choke-hold left the company powerless: if Trans World wanted to increase revenue on busy routes by putting a large plane into service, Icahn could only claim more seats.

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TWA L-1011 & 727 from early 80's.
Photo © AirNikon


Despite the Karabou contract, TWA persevered. Recently, the company created highly profitable routes (Icahn could not buy tickets on new TWA routes), building a “mini” hub or “Focus City” around San Juan, Puerto Rico. In addition, the airline completed a modernization plan of its fleet, with orders for ultra modern Airbus A318 aircraft, and receipt of Boeing 717 and 757 aircraft. In fact, as we entered 2001, it looked like TWA might survive. For if it could surpass the two-year mark and release itself from Icahn, long term survival might follow. Of course, sitting on the tarmac, little did I know that
trouble brewed for the airline.

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TWA Douglas DC-2 from 1939.
Photo © Gerard M Foley


And now we know the truth. Seventy-five years of strife and glory will disappear. This airline built by thousands of workers around the world will slip out of existence. Its striking letters and distinctive globes, will meld into three stripes and silver bodies. And it’s not just a nation's airline, it’s an airline of global legacy. The letters T-W-A are among the most identifiable in the world.

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Lockheed Constellation from 1969.
Photo © Mel Lawrence


From the beginning, TWA was a trendsetter. Under the ownership of Howard Hughes, the airline heralded the age of pressurized cabins and speedy flights with the Lockheed Constellation and served cities around the world with Lockheed’s ultra-modern trijet, widebody, the L-1011. We have TWA to thank for in flight movies, a perk it instituted on long-haul flights. And let us not forget that TWA was the first airline to offer non-smoking sections. Alongside the defunct (and now reborn) Pan Am, known for its style and service TWA was one of THE airlines to fly.

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TWA 757 from 2000.
Photo © Justin Cederholm - Orlando/Tampa Aviation Photography


TWA was a trendsetter in other ways. My grandfather, now retired, worked for the company for 31 years as a lead aircraft mechanic. To the best of his or anyone else’s recollection, he was the first black mechanic for ANY major airline between New York and Los Angeles. It was TWA that afforded my family the opportunity to travel across the country and literally circle the globe long before many other of our fellow black families. In fact, if it weren’t for TWA, I probably wouldn’t be studying at Brown University in Providence, RI.

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TWA Convair CV-880 from 1972.
Photo © John P. Stewart


From 1975-1979, my grandfather, through TWA, worked in the Middle East as a contract ground and flight mechanic for Saudi Arabian Airlines. While he and my grandmother lived in the Middle East, my uncle attended boarding school, completing his high school years in the United States. In January of 1979, during his senior year, my uncle learned of a small, but vibrant school in Providence named Brown. Interestingly enough, I was born only a few days after he received his acceptance letter from Brown admissions. And now, nearly 22 years later, I’m approaching my own graduation, having found Brown to be a good match for me as well.

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TWA MD-82 over San Francisco from early 80's.
Photo © The Douglas Aircraft Company (Jammy Lee)


So, as the 18,000+ employees of TWA prepare to retire their uniforms for those of another airline, I say, thank you. Thank you for sustaining an airline that should be hailed as one of the greatest. Thank you for sacrificing for many years with lower than industry average wages and for attempting to put the naysayers to rest. I tire of the clichés that call TWA a shadow of its former self. TWA may not be a veritable giant, but it retains an identity coursing with history, many fond memories, and aviation honor.

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TWA L-1011 from 1987.
Photo © Michael F. McLaughlin


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Written by
Nicholas Everage

Brown University, Providence, Rhode Island

28 User Comments:
Username: Bloomtyler [User Info]
Posted 2001-03-20 02:08:52 and read 31274 times.

That was a excellent story of the history and how much you will miss TWA!

Username: Canadair 14 [User Info]
Posted 2001-03-20 04:58:37 and read 31233 times.

That was a great Article!!! Excellenty written and it had lots of personnel detail which made it have more meaning
Sorry i never had a chance to fly one of the greats!

Username: Srbmod [User Info]
Posted 2001-03-20 05:35:26 and read 31226 times.

A very good article indeed. As many of the great airlines have been consigned to sentimental memories, we must look back on what effect these companies had not only on the customers they served, but the employees that worked for them. And this article is a good example of this. These airlines did more than just put food on the table and paid the bills, they put children and grandchildren through college, they gave employees the chance to see and work in other parts of the world, they help foster multiple generations working for them. I even got a little misty-eyed from nostalgia, as my grandfather was once an employee of Eastern, and after he retired, he saw the downfall of an airline that he was a part of and helped to build for nearly 40 years, and I now enjoy hearing tales from his days at Eastern. I have never flown on TWA, and I hope for the best for the employees in the transition to American Airlines.

Username: Linpengie [User Info]
Posted 2001-03-20 14:31:57 and read 31186 times.

this piece is moving and very well written. I'm not an aviation maven myself but a historian, but I understand the beauty of flight and the beauty of these flying machines, and I am sorry to see a piece of history disappear.

Username: Jtamu97 [User Info]
Posted 2001-03-20 17:39:00 and read 31163 times.

Fantastic article and a great tribute to a Great Airline. It always saddens me to loose such a giant name in the industry. I sure will miss that big Red and White...Thanks TWA and the best to all the employees.

Username: TWA4life [User Info]
Posted 2001-03-20 18:34:01 and read 31149 times.

That was an absolutly great article!!!! The loss of TWA is one of the saddest things that has happened to me in a long time. My father currently works for TWA and is on his 37th year with the airline. I have flown on TWA and only TWA for my whole life, lived through the tough times in the early 90's and through what seemed to be the reviving in the millenium. Thats the airline business for you. American Airlines is going to be a better company to work for and puts the worries of a bankrupt airline out of our heads its just not the icon of TWA that we have loved for many years. We'll miss you TWA.

Username: ConcordeBoy [User Info]
Posted 2001-03-20 18:34:31 and read 31148 times.

I'm surprized nothing was mentioned of flight 800... it wasn't exactly a fortifier for TWA. JMO

It does kind of make you wonder though: PanAm, Braniff, Eastern, Western.... who's next? Rumors now abounding that Alaska Air is talking with Delta for a merger, Delta offering itself to the smaller Continental in the event that the United Merger goes through, USAir ('nuff said), etc. Just makes us FF mile-holders kinda jittery.
~ConcordeBoy

Username: Access-Air [User Info]
Posted 2001-03-20 23:55:03 and read 31071 times.

Sad!!! very, very, sad!!!!
Its a shame, when something like this happens. I get so angry when I see big Mega carriers gobble up smaller carriers like theyre nothing. TWA is part of our history and our present, unfortunately not our future. I can envision that American altho absorbing most all the TWA employees, will have a hard time justifying maintaining service in to what is/was left of some of the former smaller Ozark cities like Moline or Peoria or Springfiled..to name a few. I just dont see it lasting all that long...As for the St.Louis hub....I give it 3-4 years before it has been completely dismantled sort of like AirCal and RenoAir....None of these Mega airlines has any intention of bettering the industry...all they want is a bigger piece of the pie, stepping on whomever in the process.....Lastly, how can out Government allow a merger or take over like this to take place when the airline taking over the smaller one cannot even justify to pay its employees decently but then turn around and front 900Million in dollars....What a snow job.......Its just totally sad.....It just gives me one more reason to not like American Airlines......Plain and simple,
The AA with the Vulture in the middle comes to feed once again.......

AccessAir Airliners.net chatroom Operator

Username: Westjet_8 [User Info]
Posted 2001-03-21 02:53:23 and read 31019 times.

I never have flown on TWA. I will miss it though. I personally think AA is great and that the new airline will be amazing. I am sad to see the logo go though.

Username: ContinentalEWR [User Info]
Posted 2001-03-21 03:30:39 and read 31012 times.

I too am saddened by the demise of TWA. This was once a classy, first-rate airline with a well known
product and stood as a recognized symbol of America's
aviation prowess in many parts of the world. TWA's
history has been marred by Carl Icahn, the TWA 847
hijacking (A B727-200 flying the CAI-ATH-FCO route
and which was seized after taking off from ATH), the
TWA 800 disaster off Long Island, and, it is worth
mentioning again, Carl Icahn. I think the above article
is well written and a thoughtful reminder of just how
glorious and memorable TWA will always be.

However, I believe TWA has long been in decline. As
a regular passenger on TWA domestic and international
flights, mainly to Europe during the 1980's and early
1990's, I found most flights to be chronically late and
therefore unreliable, the aircraft were in bad shape when they were still middle aged (747's, L1011's, and
early 767's), cabin crew surly, and in many ways, TWA
became America's Soviet-style airline.

Sadly, the brand was valiantly revived in the last few
years to a refined product, better than the largest of
US airlines, but sadly, it was too little, too late and
the turnaround could never happen thanks to Karabu
and Icahn's legacy.

Goodbye TWA. I will never forget TW 840/841, flying
year round 747 from JFK to FCO and back. I flew this
segment more than a dozen times. I'll never forget it.

ContinentalEWR

Username: ConcordeBoy [User Info]
Posted 2001-03-21 03:42:31 and read 31008 times.

Interesting analogy Access...

Speaking of vultures, can anyone explain why other airlines didnt jump in to get their share of the feeding frenzy? Why was Carl Icahn and a host of seemingly ridiculous last-minute mystery companies the only competition? NorthWest is probably the only of the 7 major carriers that needs to focus more on growth in the east; Continental is both itching for growth and bathing in money for its relative size; also Delta is struggling with its pilots, but isnt exactly what can be called poor. Why did they not jump to the "rescue" of TWA? Anyone?
~ConcordeBoy

Username: Eddiepack [User Info]
Posted 2001-03-22 08:03:08 and read 30794 times.

when i applied at twa 25 years ago it was the only airline i wanted to work for..it is sad to see it's logo's going away for it was the best at one time..may carl icahn burn in hell !!!!

Username: CPDC10-30 [User Info]
Posted 2001-03-22 11:31:16 and read 30781 times.

Now you guys know how I felt when CP was gobbled up last year by AC. Don't worry, you'll get over it eventually, I'm still recovering :(

Username: Blackbox80 [User Info]
Posted 2001-03-22 15:28:01 and read 30770 times.

I guess that means a sure merger between Delta and Continental. Thats what my dad who is n aircraft mechanic for Delta says. There are also lower mechanic wages for continental, so I hope Delta eats Continental.

Username: ConcordeBoy [User Info]
Posted 2001-03-22 22:53:00 and read 30721 times.

Delta cannot buy Continental due to a veto option that NorthWest has expressed it will use in the event of any airline buying out Continental. Opinion is split down the center on whether or not that veto would apply in the reverse situation... and there has been much speculation that Delta will indeed offer itself to Continental.

IMHO, I sincerely hope that the UAL/USAir merger isnt granted... the LAST thing I want to see is a balloon logo cluttering ATL.
~ConcordeBoy

Username: Iflewrepublic [User Info]
Posted 2001-03-22 23:44:23 and read 30707 times.

This was such a well written article...I thank you for it. Many times, we manage to transcend the line and look at the airlines not as corporations but as living, breathing beings. This is all too familiar to those of us who now work for "Red-Tail" but who once served with Republic and before that Southern, North Central, and Hughes Airwest. As with Braniff International, National Airlines, Pan American, and Eastern, I never thought the day would come when TWA would no longer take to the skies, but alas, that day has come. To the people of TWA, may God bless each and everyone of you, and may you find happiness at American Airlines.

Iflewrepublic.

Username: ConcordeBoy [User Info]
Posted 2001-03-23 02:37:30 and read 30694 times.

If I'm not mistaken, doesnt National Airlines still exist, with a hub in LAS?
~ConcordeBoy

Username: Access-Air [User Info]
Posted 2001-03-23 04:56:30 and read 30683 times.

No ConcordeBoy,

The National Airlines of Las Vegas has nothing to do with the National Airlines that was merged into Pan American World Airways back in 1979....

Access-Air

Username: ConcordeBoy [User Info]
Posted 2001-03-23 07:00:20 and read 30675 times.

Thanks for the info, was not aware of the difference.

Can anyone answer my former question as well, which was "why was American the only airline to come to the 'rescue' of TWA"?
~ConcordeBoy

Username: AA B777-200 [User Info]
Posted 2001-03-25 09:21:15 and read 30616 times.

Hi there Nicholas!

I just wanted to let you know that I thought your article on TWA was very touching. I haven't flown TWA that many times, and the times I did I wasn't really impressed! But I did enjoy Eastern, Republic and Ozark,and thinking back how I felt when all of those airlines ceased operations, I kind of have and idea what you feel now!

I live in the Netherlands and I remember that TWA was one of the first US airlines to serve Amsterdam in the new age/early eighties. I believe that back in 1982 they started the AMS-JFK-BRU run with the L1011. They had some good and bad times, and the route changed a lot. Planes would continue to Munich, then Vienna, or just stop in AMS. I saw some 767s, 747s, L1011s, but also the 727 that linked Amsterdam with their Heathrow hub.

But ever since I was a kid I just loved American Airlines, known to me as the Silverbirds. And yes, I was proud that they were the ones buying TWA's Heathrow routes, and Eastern's South American operations, and lately Reno air.
I think that AA trippled their South American operations from what Eastern operated at that time, and yes I'm very proud of that too!

My point : allthough TWA is the 'loser' here, I'm convinced that they are in good hands. AA has proved to us that they are indeed a tough airline, but this is a company that knows what it's doing, and they will be around for quite some time!

Don't let anyone take away your TWA memories!

Dutch reagards out of Rotterdam,

Robin de Geus

Username: Mennix [User Info]
Posted 2001-03-26 09:40:09 and read 30594 times.

It might be really sad if an industrial giant like TWA disappears. However, for me as a passenger I feel much better to fly with an airline having enough money to pay their bills and operating planes which are younger than myself. I'm a German and I believe we think different. History is the one side, safety the other. So lets say goodbye to a great history and welcome to a new, modern airline.

Username: CP737 [User Info]
Posted 2001-03-29 06:38:33 and read 30524 times.

Excellent article! I just want to say that many of us in Canada had similar feelings when Canadain Airlines was taken over by Air Canada. It's a rough industry but we are lucky that there are so many people that will help preserve the memory of our favorite airlines once they are gone!

Username: Shea [User Info]
Posted 2001-03-31 15:07:34 and read 30501 times.

i am to sad to see twa take its place in history ..but a friend of mine who works for twa for many years ....is sad also that over the years the Icahan's and lorenzo's of our time have destroyed parts of the aviation history who remembers PAN AM being auctioned off in mia ....my friend is now looking forward to a financal future with another bit of history american airlines...so what i would like to say to the TWA employees ...welcome aboard ..and have a nice flight.......aal lga
ps to my friend at TWA the momories you have will never fade

Username: Cori [User Info]
Posted 2001-04-03 16:51:05 and read 30460 times.

Nicholas,
Congratulations on your up-coming graduation from Brown in Providence. As a 29 year employee of TWA, I would like to say simply that your article brought a few tears to my eyes. Thank for stating what so many people already feel.
Cori

Username: Helene [User Info]
Posted 2001-04-03 19:15:58 and read 30453 times.

I worked for TWA for 30 years -wonderful years with lots of learning and experiences. I truly love that airline and appreciate your well written article that depicts the company as a living being, with employees as loyal and dedicated as none others.
What I do not understand is the misconception of Carl Icahn. Everyone conveniently seems to forget that, had he not provided the loan (that ultimately resulted in the Karabu contract), the existence of TWA would have ceased that following spring. Gone. No white knights to the rescue, nothing. Anyone claiming that the Karabu contract was the eventual demise of TWA is very much misinformed. True, it probably had some impact on their earnings, but they also got incremental passengers they did not have before. Their argument that they could have sold those seats at a higher price cannot be proven. This argument is used, in general, by all airlines, and still cannot be proven. In this case, TWA did owe the money and this contract was a brilliant way to repay it as painlessly as possible. The true reason for TWA's demise can be found in the steep increase of fuel prices during a time when historically the passenger loads are at their lowest. Do you have any idea what just a 1 cent increase per gallon means to an airline? Hundreds of millions!
I see that red and white plane land every day, and believe me, when it turns silver, it will sadden me greatly. But business, especially the airline business, is very tough, very cruel, but I am happy with the fact that the TWA employees will have a job and work for an airline, which is what they know best. They are great people and AA should feel privileged to have them.

Username: Braniff747 [User Info]
Posted 2001-04-30 15:16:59 and read 30328 times.

Excellent article. I too will miss TWA. After Icahn got through with them it's amazing they lasted this long. Their prize routes are gone, no more 747s or L-1011s. I hope that AA takes care of the JFK International terminal.

Every time I fly UAL JFK-LAX (via the former TWA domestic terminal), I recollect the good old days when TWA was a force to be reckoned with. I'm going to print your article and read it the next time I pass through there. I will salute your grandfather and all the other TWA employees.

Thanks for the memories.

Username: MasterFlash [User Info]
Posted 2001-05-10 23:14:04 and read 30295 times.

Long careers were had by my sister (who is transferring from one airport to another airport out West) and two uncles (one deceased and the other retired.) I am kind of sorry to see TWA go. When I see that logo in old TV shows and movies, I will remember the good times flying to visit family and friends.

Username: Skyhawk [User Info]
Posted 2001-05-19 05:57:11 and read 30286 times.

The article was sad indeed, it did come very close to home. My husband and I both worked for Pan Am and are well aware how the author feels of the demise of TWA. Before Pan Am we both worked for National Airlines, so you see, we've been down this road a couple of times.By the way "Braniff 747" don't forget, before it was the Domestic terminal for TWA, it was the terminal for National! Also, "Concorde boy", like "Access-air" said, the National Air in LAS is no more National Airlines than the "new" Pan Am has any connection with the great company that set many aviation milestones in history, not the least of which may be them having first 747 to carry passengers. Finally, CPDC10-30, if you have been able to adjust after only one year, I'm happy for you. It has been 10 years this year that Pan Am left us and it still makes me sad remembering my last flight and the last time I pulled into the Worldport at JFK(not the so called Worldport in ATL).

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