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What Keeps TWA Flying?  
User currently offlineContinentalEWR From United States of America, joined May 2000, 3762 posts, RR: 13
Posted (14 years 7 months 4 days 12 hours ago) and read 1778 times:

I am curious to know what the public and my fellow airline enthusiasts think
about TWA's survival prospects. The airline has not turned a profit since the
late 1980's (1988 to be exact) and despite rising customer service rankings
and a more rationalized route structure, how can this airline survive? Does
anyone think TWA is a takeover target? Are its core assets the St. Louis hub
and some 50-75 new aircraft? TWA is never the #1 carrier in any of the
markets it serves, except EVERYWHERE to ST.Louis.

Should TWA shut its JFK mini-hub? Does it make sense for an airline that
is focusing on Hawaii, Mexico, Caribbean, and US domestic routes to keep
flying routes such as JFK to Lisbon, Portugal?

With the anticipated consolidation stemming from the United/US Airways
merger, is there room for TWA?

12 replies: All unread, jump to last
 
User currently offlineTWFirst From Vatican City, joined Apr 2000, 6346 posts, RR: 51
Reply 1, posted (14 years 7 months 4 days 12 hours ago) and read 1631 times:

ContinentalEWR, since you just joined airliners.net, you may not be aware that nearly everything contained in your post has been DISCUSSED TO DEATH!!!! Do a search of the forum, and you will find numerous threads answering your questions. I, for one, am sick of defending TWA's future, as I think are most users of this forum who have a lot of inside information about TWA (Acvitale, UK TWA, DL Widget Head, Chieftain to name a few).


An unexamined life isn't worth living.
User currently offlineContinentalEWR From United States of America, joined May 2000, 3762 posts, RR: 13
Reply 2, posted (14 years 7 months 4 days 12 hours ago) and read 1615 times:

Dear TWFirst,

This is not your forum. It's everyone's and I was opening the question to
anyone willing to reply, particularly new members like myself. 99% of the
topics have been discussed already in some form or another.



User currently offlineTwa747100 From United States of America, joined May 1999, 600 posts, RR: 0
Reply 3, posted (14 years 7 months 4 days 10 hours ago) and read 1589 times:

Everyone who was sad to see pan am and eastern go down dosent want twa to go down either so we all get together and push and pull the twa jets off the ground
                                                     


User currently offlineBlink182 From United States of America, joined Oct 1999, 5485 posts, RR: 15
Reply 4, posted (14 years 7 months 4 days 5 hours ago) and read 1551 times:

no one wants TWA to go out like Eastern and PanAm did,i guess some people fly them because they want them to stay in business, plus how does being based in St.Louis help you rake in the dough, they should look into LAX or JFK if they want to make some dough.


Give me a break, I created this username when I was a kid...
User currently offlineDeltaRNOmd-80 From , joined Dec 1969, posts, RR:
Reply 5, posted (14 years 7 months 4 days 2 hours ago) and read 1524 times:

Blink182, TWA recently started more service to/from LAX and it already has a mini-hub in JFK. To increase service to/from airports that the bigger majors already have a stronghold on would be big financial losses...

User currently offlineChrisNH From United States of America, joined Jun 1999, 4165 posts, RR: 2
Reply 6, posted (14 years 7 months 3 days 18 hours ago) and read 1500 times:

This is not an earth-shattering observation, but TW barely a year ago started a single run from Portland, Maine to St. Louis via Hartford. A very strange run, indeed.

Today, that run no longer exists. They came to PWM and went with nary a ripple.

Now, in the whole scheme of things this doesn't much matter. But think of the folks at PWM who welcomed TW with much fanfare. Now what?

My reason for pointing out this anecdote is that a carrier as thin as TWA is simply can't make much of a go of it against the big boys on the big routes...and thus must 'create' routes where none really should exist.

Portland's loss is reflective of a once proud and now sad carrier than no one but die-hard customers can (or should) appreciate. They and PanAm should stop whistling by the graveyard and simply pick up a shovel and bury themselves once and for all. This 'hanging on' by a thread doesn't do much for anyone...


User currently offlineAcvitale From United States of America, joined Aug 2001, 922 posts, RR: 10
Reply 7, posted (14 years 7 months 3 days 15 hours ago) and read 1487 times:

ChrisNH,

Your post shows an awful attitude.

For the record...

TWA is poised to make a profit in Q2 2000 thus ending 12.5 years of losses

TWA rejuvinated their fleet from one of the oldest US carriers to one of the youngest

TWA retired over 700 million of long term debt over then last 4 years

TWA opened a focus city and re-aligned it's routes to jump yields by almost 240% in comparison to old routes that were terminated!

TWA payed off it's pension fund obligations

TWA has been number 1 in on time preformance and ranks as only 1 of 2 carriers (TW and CO) to rank highly in the most important FF survey JD Powers! Not even Southwest beat the 100 percentile this year! (although a close third at 96%)

TWA did all this while not turning a profit and while having many tickets sold under Karabu which cuts 45% of the fare listed off before TWA sees anything.

TWA has done a fine job of recovery after being raped by Icahn!

TWA is growing with an average growth of 10% in RPM compared to one year ago. This along with the continued delivery of new state of the art aircraft while the continued retirement of older 727 and DC-9 types continues makes them a long term winner!

I would love to see anyone else do what TWA has with the limited resources and still be there much less poised to make a profit!


User currently offlineFrontierMan From United States of America, joined Oct 1999, 413 posts, RR: 0
Reply 8, posted (14 years 7 months 3 days 14 hours ago) and read 1473 times:

I think we need to face some facts here. In 1999, TWA reported an operating loss of $347.7 million and a pre-tax loss of $351.8 million which included a charge of $37.8 million related to the ratification of labor contracts, non-operating gains from the sales of the Company's interests in Equant and Priceline.com which aggregated $52.2 million and special charges of $176.8 million. These results compare to a prior year operating loss of $65.2 million and pre-tax loss of $107.2 million which included a non-cash charge to operating expense of $27.5 million relating to a distribution made in July 1998 of TWA common stock to employee stock plans pursuant to the ESIP and special charges of $42.6 million. After extraordinary items of $0.9 million in 1999 and $13.1 million in 1998 relating to the early retirement of debt, the Company recorded a net loss of $353.4 million in 1999 versus $120.5 million in the same period of 1998. TWA looks like it's falling out of the sky.



User currently offlineAsqx From United States of America, joined Jun 1999, 619 posts, RR: 0
Reply 9, posted (14 years 7 months 3 days 14 hours ago) and read 1465 times:

You are forgeting that most losses posted for TWA are "paper" loses, and do not really accout for the true amount of money, or cash on hand, that TWA has lost. In reality they only dropped $15 million of their available cash.

Despite taking in a large number of new aircraft over the last few years, they aren't spending that much more on aircraft. A lot of their aircarft were and are leased. When an old plane, say a DC-9, was replaced, it's lease payments were "transfered" over to the new aircraft, say a 717. So while they have to pay for the different pilot training, which the do "in house" they aren't paying any more money for their aircraft. With the reduced maintenace and operating costs and less down time for the aircraft, they can actually start making moeny.

As Acvitale said, TWA has done a lot over the last few years to decrease their debt and losses and increase their potential profitability. Should TWA actually be able to post a profit, no matter how small, it will be a big step and just might be what TWA needs to survive. Should they be able to make it past 2003 and still be in business, they should then be poised to rejoin the ranks to profitable and successful airlines.


User currently offlineRyanair From United Kingdom, joined Jul 1999, 654 posts, RR: 0
Reply 10, posted (14 years 7 months 3 days 9 hours ago) and read 1445 times:

I've quoted loads of fiqures in the past to back this up, but I think the turn around is too little too late however impressive it is. The new planes don't save anything or cost more than before, the gain there is the better service they can offer. The number of seats being offered for sale is increasing fast, but the number of extra passengers isn't anything like keeping up, so in strict economic terms it's less efficient. That gap will rapidly eat up their Current Assets giving them two years left based on the fiqures.

Their debt growth is greater than their asset growth which means they'll find it hard in to get extra finance. I'm told JFK is break even and the Carribbean Routes doing OK (although I'm unhappy as Gerry Gitner tried the same policy there at Pan Am in the mid eighties with Ed Acker and it was no good then because the yields were poor and certainly made matters worse for the company, but still that was a long time ago). I think growing the market by inventing routes is a great idea and they are doing a tremendious job of it, I just don't think they've the financing to do it, thus putting their limited resources under too much pressure. I wonder with the US-UA deal how expansion plans at Reagan will work.

Anyway moral of the story, I think they'll run out of cash before they can make it work and if that occurs somebody will pick up the new routes but nobody would touch St Louis with a barge pole, as it was their decision to move there that weakened them so (allowing Ichan to get in after it was split from it's broader group) and it's never really worked.

If you want to check the numbers anybody, go to the TWA web site and press releases they're all in the Q1 results story.


User currently offlineAcvitale From United States of America, joined Aug 2001, 922 posts, RR: 10
Reply 11, posted (14 years 7 months 3 days 8 hours ago) and read 1438 times:

TWA has actually reduced long term debt. That is a fact and the SEC filings can verify that hence, Your argument about increasing debt is moot.

TWA has shown significant losses due to the following major items.
Write downs on shutdowns to European routes.
Write downs with associated maint. items such as spares and other equipment tied to retired fleet types.
Stock dillution due to employee stock participation.

TWA has generated cash thru the sale of assets as well. Some have shown negative book values such as the purchase of a leased 767-200 and subsequent sale at a loss to lease a 767-300ER that on paper appears as a loss but brought a much lower lease payment that resulted in a long term benefit to TWA.

The end result is this. TWA will likely remain quite viable for the near and long term future. Cash on hand exceeds anything in the 1990 to current period.

The same price on the leases between the 727/MD80's and DC-9/717 fleets is incorrect. The new planes cost significantly more to lease. The upside is they also cost less to operate with significant savings in fuel, crew, maint., spares etc. The fuel burn between a 727 and a 717 is 2.5 to 1 the fuel burn between an DC-9 vs a 717 is 1.7 to 1. The 727 required 3 crew vs. the MD80/717 crew of 2. The maint costs on the 727 vs MD80 is almost 217% in favor of the MD80. The numbers are more dramatic with the DC9 vs. 717!

The route restructuring is working. Yields are up! CASM is dropping. SJU is very profitable. STL is marginal. JFK was a money looser it appears with the restructuring to the caribbean and Mexico that JFK is now marginally profitable and the numbers are improving. MCI overhaul base was a money loser! It is now be released at a significant savings and a bond issue is being floated by the City's airport authority for refurbishment that will end up costing TWA nothing but, will provide almost 20% savings in operational cost over and above the lease savings.

The airline is an operational preformer and is ranking in the top of the DOT's operational numbers. It also ranks extremely well with frequent flyers.

While admittedly loads are down percentage wise over the record setting 1999 numbers TWA is actually showing improved numbers month to date for May 2000. Yields for May are trending well as well.

Advance bookings are doing quite well compared to 60-90 days ago when they were lower than expected.

All of these items (except the May numbers can be obtained thru public sources such as the DOT and TWA)

As for the future. If TWA can turn a profit as expected in Q2 and Q3 then imagine what happens when the noose known as Karabu is removed from TWA's neck in September 2003.

As for alliances and codeshares. Many believe an alliance and codeshare with 2 domestic carriers and up to 4 European, 1 Indian subcontinent, 2 Middle East and 1 SE Asian carrier will develop before YE 2000. (announcement should occur in Q3 2000)

TWA has a dedicated team of employees and management. The airline has been predicted to die for at least a decade and a half. Yet if you quote look at the numbers you will find it is sitting far better then any point after the Icahn rape!

One thing that is amazing is the number of shorts that are leveraging the stock (close to 20%) it is in their interest to insure that the stock does not climb nor the airline succeed! If it does it can cost them incredible amounts of money! There are an estimated 12 million shares out there that are owned by persons who will spread as much negativity truth or lie that they can in an interest to insure they do not lose their money. If TWA has a profitable Q2/Q3/Q4 the stock could shoot to at least 20-25 on the market. Shorts could lose over $18-23 a share shorted multiply that by the 12 million shares and you have a quarter billion reasons for people to spread malicious and untrue rumors and statements about the carrier.

I for one believe in the airline. I bought 20K shares at 2 1/16. I feel the stock is good for 20-25 by Q1 or Q2 2001. Time will tell if I am right!


User currently offlineTWAneedsHELP From , joined Dec 1969, posts, RR:
Reply 12, posted (14 years 7 months 3 days ago) and read 1407 times:

ContinentalEWR as TWFirst, a fine contributor, stated in the thread's opening your not alone. It has been numerous times in the last 3 weeks that newcomers have come on and posted a quarry about TWA saying the same obviosu info that you have, "TWA hasn't made money", "old airline" etc...........We've had some very in-depth conversation on TWA's operations, its SJU focus city, JFK's future, future focus citys, CDG and LAX expansion, and new planes. A simple search will uncover oceans of information on TWA. Happy hunting.

The fact is that yes TWA is hurting but its very survival attests to its fighting nature and ability to survice. Clearly TWA will never be a top 5 airline, the infrastructure is not there. However, TWA has been successful in becoming a niche performer to the Carribean and the middle east. An agreement with America West is due out soon, an expansion at LAX while risky could produce rewards, and new CDG-TLV service could only add to profits. While the stock won't climb past $10 and they're are many companies (Applied Materials, Lucent) that'll make you better rewards quicker (Al listening?) teh airline won't die anytime soon.

Terrific operational performance coupled with a new fleet and an expanding operation will continue to see Big Red flying the great big skys for many years to come. For more info seach for TWA threads by TWA UK, TWFirst, Chieftan, and Acvitale.


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