Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
The Point Of AA Taking Over TWA?  
User currently offlineNoise From United States of America, joined Dec 1999, 1773 posts, RR: 4
Posted (7 years 6 months 4 days 5 hours ago) and read 9215 times:

Five years after the takeover of TWA by AA, I am still unclear as to why such as move was done. All I seem to understand is that AA inherited TWA's massive debt through the takeover, and a new hub at STL, which it is downsizing. What was the point?

56 replies: All unread, showing first 25:
 
User currently offlineCIDflyer From United States of America, joined Apr 2005, 2285 posts, RR: 3
Reply 1, posted (7 years 6 months 4 days 5 hours ago) and read 9201 times:

back in 2000 ORD was running at overcapacity and the summer of 2000 was known commonly as the "summer of hell" due to numerous delays at ORD, etc. DFW was also running at capacity. This was also the time UA and US were looking to merge, threatening to overtake AA as the worlds largest airlines. AA saw an opportunity to have a 3rd mid continent hub to relieve congestion at ORD and DFW, plus bail out financially troubled TWA. A good idea at the time but then we all know 9/11 happened and the after effects of that sent the industry on a downward spiral. Today AA seems to be happy at STL after their cutbacks, its their 4th largest hub and who knows someday when airline industry expansion may take place again they have room to grow again there should they deem necessary.

[Edited 2007-02-28 04:57:03]

User currently offlineFlyHoss From United States of America, joined Feb 2005, 598 posts, RR: 0
Reply 2, posted (7 years 6 months 4 days 5 hours ago) and read 9175 times:

Quoting CIDflyer (Reply 1):
back in 2000 ORD was running at overcapacity...

I too, think ORD played a big part in AMR's decision. IIRC, at that time UAL was nearly twice the size of AA at ORD, so aquiring TWA was an opportunity to gain a dominant position at a midwest hub. However, I don't think AA was planning on any significant down-sizing of ORD and there's no argument that STL isn't the huge business O & D market that ORD normally provides.

AA's aquisition of TWA, Reno Air and Air Cal haven't really "panned out" in my opinion, but that's only my opinion.



A little bit louder now, a lil bit louder now...
User currently offlineSteeler83 From United States of America, joined Feb 2006, 9194 posts, RR: 20
Reply 3, posted (7 years 6 months 4 days 4 hours ago) and read 9137 times:

Quoting CIDflyer (Reply 1):
This was also the time UA and US were looking to merge, threatening to overtake AA as the worlds largest airlines.

Wasn't UA already the biggest airline at the time? With AA in second?



Do not bring stranger girt into your room. The stranger girt is dangerous, it will hurt your life.
User currently offlineWesternA318 From United States of America, joined Oct 2004, 5654 posts, RR: 24
Reply 4, posted (7 years 6 months 4 days 4 hours ago) and read 9148 times:

Quoting Steeler83 (Reply 3):
Wasn't UA already the biggest airline at the time? With AA in second?

Noo, AA was already the biggest, but not by much, after swallowing us (TWA), they became even bigger, fleetwise



Next trip: SLC-DEN-SLC-PHX-JFK-LAX-SLC with my wife and oldest daughter. F9 to and from DEN, US to JFK, AA 321 and CR7
User currently offlineCRFLY From Costa Rica, joined Jan 2004, 197 posts, RR: 1
Reply 5, posted (7 years 6 months 4 days 4 hours ago) and read 9140 times:

This is supposed to be one of the nastiest acquisition in the airline history of the US. Maybe the events of 9/11 worsen the situation of ex TW's employees... Here is a very good video that tells the story of the men and women who flew as F/A for TW and got dismissed by AA... Enjoy!

http://www.youtube.com/watch?v=RkhI6vfRXHI



With Age comes Wisdom...
User currently offlineMrSTL From United States of America, joined Sep 2005, 468 posts, RR: 1
Reply 6, posted (7 years 6 months 4 days 4 hours ago) and read 9103 times:

Quoting FlyHoss (Reply 2):
AA's aquisition of TWA, Reno Air and Air Cal haven't really "panned out" in my opinion, but that's only my opinion.

AA took competition out of the Midwest, New York and increasing presence at SJU. TWA at the time was suppressing yields in a lot of the markets AA serviced-- mostly due to the Karabu agreement and Lowestfare.com. True they were going to use STL to some capacity but never at the levels of when they bought it. A multitude of events occurred that contributed to the bad timing of the purchase of TWA/STL. 1) UA/US not happening 2) 9/11 3) Delta pulling out of DFW 4) United going bankrupt AA establishing a stronger presence at ORD. None of this helped STL. To top it all off the workforce of TWA was very senior, it is no coincidence that every TWA FA was furloughed and it is not a coincidence that AA's growth will not occur again until after they have fallen off the furlough list.

Yes AA's track record on acquisitions suck!

AA picked up less competition, more slots at LGA, DCA and a warchest of International Routes which they have yet to ultilize and a moderate FF base especially out of STL. They also picked up a lot!! of debt- hope it was worth it.


User currently offlineSteeler83 From United States of America, joined Feb 2006, 9194 posts, RR: 20
Reply 7, posted (7 years 6 months 4 days 4 hours ago) and read 9089 times:

Quoting WesternA318 (Reply 4):
Noo, AA was already the biggest, but not by much, after swallowing us (TWA), they became even bigger, fleetwise

Now that is interesting (I thought UA was the biggest airline when they pursued US, but apparently I thought wrong.) AA was bigger, and they got bigger by eating up TWA and nobody stopped them. No American anti-trust groups or monopoly stuff or anything of the sort got involved apparently. Or they did but I guess didn't care or something...



Do not bring stranger girt into your room. The stranger girt is dangerous, it will hurt your life.
User currently offlineUnitedNRT From United States of America, joined Aug 2006, 284 posts, RR: 9
Reply 8, posted (7 years 6 months 4 days 4 hours ago) and read 9081 times:

Quoting WesternA318 (Reply 4):
Noo, AA was already the biggest, but not by much, after swallowing us (TWA), they became even bigger, fleetwise

For that period in time good ol' United was still the largest when compared to just American itself and excluding TWA's system.


Per 2001 Annual Report
-------------------------------------------------------------2001 2000 1999
American Airlines
Revenue passenger miles (millions)--------106,224 116,594 112,067
Available seat miles (millions)----------------153,035 161,030 161,211

United Airlines
Revenue passenger miles----------------------116,635 126,933 125,465
Available seat miles------------------------------164,849 175,485 176,686



"...That's a lovely name. My name's Milton; Milton Ettenheim, but my friends call me Bubbles."
User currently offlineWesternA318 From United States of America, joined Oct 2004, 5654 posts, RR: 24
Reply 9, posted (7 years 6 months 4 days 4 hours ago) and read 9070 times:

Well, guess I was wrong, once again, lol!


Next trip: SLC-DEN-SLC-PHX-JFK-LAX-SLC with my wife and oldest daughter. F9 to and from DEN, US to JFK, AA 321 and CR7
User currently offlineSteeler83 From United States of America, joined Feb 2006, 9194 posts, RR: 20
Reply 10, posted (7 years 6 months 4 days 4 hours ago) and read 9052 times:

Quoting WesternA318 (Reply 9):
Well, guess I was wrong, once again, lol!

Heh, that's ok, I am wrong about many things... It's called being human  Smile



Do not bring stranger girt into your room. The stranger girt is dangerous, it will hurt your life.
User currently offlineMoman From United States of America, joined Aug 2004, 1054 posts, RR: 4
Reply 11, posted (7 years 6 months 4 days 3 hours ago) and read 9023 times:

The TWA takeover by AA was founded on good intentions. AA would get a lot of common aircraft (757 and the newest MD80s built), gain a reliever hub in the midwest, pick up a strong Caribbean network, and get much needed slots at DCA and NYC area airports. In exchange for an immediate cash payment ($250 million???), TWA filed BK to allow AA to cherry pick the best assets and reject the leases on unnecessary items.

Let's also remember that UA/US had a lot to do with it and the benefits of TWA being able to file bankruptcy made the deal that much sweeter for AA. AA didn't have any problem getting government approval of the deal by pulling the "TWA needed our cash infusion or they would have ceased operations" card.

Too bad that external events (recession, 9/11, dotcom bust) caused the dismantling of the TWA route network and negated many benefits of the merger.



AA Platinum Member - American Airlines Forever
User currently offlineUnitedNRT From United States of America, joined Aug 2006, 284 posts, RR: 9
Reply 12, posted (7 years 6 months 4 days 3 hours ago) and read 9016 times:

Quoting WesternA318 (Reply 9):

You would be surprised how much I am wrong in a day to day setting according to my wife, children, and the list goes on from there.

I was reluctant to post it as many on here like to post in a "guess what!?! you're wrong!" matter, which was the polar opposite of my reply.

Regards,

UnitedNRT



"...That's a lovely name. My name's Milton; Milton Ettenheim, but my friends call me Bubbles."
User currently offlineFreequentFlier From United States of America, joined Feb 2007, 896 posts, RR: 12
Reply 13, posted (7 years 6 months 4 days 3 hours ago) and read 9014 times:

What remains of the STL network relative to when TWA controlled it? Can anyone find an old OAG schedule and do a before/after?  Smile

User currently offlineMrSTL From United States of America, joined Sep 2005, 468 posts, RR: 1
Reply 14, posted (7 years 6 months 4 days 3 hours ago) and read 8981 times:

Quoting FreequentFlier (Reply 13):
What remains of the STL network relative to when TWA controlled it? Can anyone find an old OAG schedule and do a before/after?

Yes, I have a timetable from Sept 2000, I will get back to you on this.


User currently offlineMoman From United States of America, joined Aug 2004, 1054 posts, RR: 4
Reply 15, posted (7 years 6 months 4 days 3 hours ago) and read 8966 times:

Quoting FreequentFlier (Reply 13):
What remains of the STL network relative to when TWA controlled it? Can anyone find an old OAG schedule and do a before/after? Smile

Let's see, doing this off the top of my head. There were immediate cuts after AA took over, but a vast majority of the TWA route network was in place until Oct 2003.

July 2003: STL 400 daily departures, 202 mainline
Nov 2003: STL 200 daily departures, 50 mainline

July 2003: STL 67 nonstop cities
Nov 2003: STL 27 nonstop cities

STL lost ALL international flying (LGW, CDG, CUN) in November 2003. They also lost the STL-HNL nonstops which were the TWA flagship runs at one time.

What mainline non-stop remains today is the major cities ORD, SEA, SFO, MCO, SAN, LAX, TPA, DFW, TPA, MIA, SAN (i'm sure there are more but I can't think of them right now). Many second tier cities lost non-stops totally like MCI, PDX, PHX and some cities lost mainline nonstops that had been around since the Ozark days like CID, OMH, SGF, DEN.

AA doesn't have near the connecting opportunities in STL either, but it is up somewhat from early 2004.



AA Platinum Member - American Airlines Forever
User currently offlineMrSTL From United States of America, joined Sep 2005, 468 posts, RR: 1
Reply 16, posted (7 years 6 months 4 days 3 hours ago) and read 8962 times:

September 2000 491 daily TWA STL departures
September 2006 a little over 200


User currently offlineTransWorldSTL From United States of America, joined Mar 2006, 568 posts, RR: 1
Reply 17, posted (7 years 6 months 4 days 3 hours ago) and read 8941 times:

TW Express out of STL (TWA.com routemap as of November 2001)


TWA Mainline routes out of STL (TWA.come routemap as of Nov 01)



As compared to:

Non-stop routes currently, per Lambert's website... This map includes non-stop from ALL airlines. NOT just AA.

http://img138.imageshack.us/img138/7982/stlrmfn2.gif

Quoting FreequentFlier (Reply 13):
What remains of the STL network relative to when TWA controlled it? Can anyone find an old OAG schedule and do a before/after? Smile


Edited to put in a bigger TWE map

[Edited 2007-02-28 06:45:45]

User currently offlineFreequentFlier From United States of America, joined Feb 2007, 896 posts, RR: 12
Reply 18, posted (7 years 6 months 4 days 3 hours ago) and read 8911 times:

Thanks! The old route maps definitely allow us airline geeks to reminisce. Its too bad about the service that was pulled down, although it looks like at least some new service was actually added as well. Obviously a lot of reductions in frequencies and some market exits too though.

User currently offlinePExDCA From United States of America, joined Feb 2007, 255 posts, RR: 2
Reply 19, posted (7 years 6 months 4 days 1 hour ago) and read 8805 times:

Quoting FreequentFlier (Reply 18):
Obviously a lot of reductions in frequencies and some market exits too though.

And don't forget that a lot of destinations went from mainline TWA service to American Connection service on RJ's!



"A single twig breaks, but the bundle of twigs is strong." - Tecumseh
User currently offlineSTLGph From United States of America, joined Oct 2004, 9343 posts, RR: 25
Reply 20, posted (7 years 6 months 4 days 1 hour ago) and read 8804 times:

Quoting FreequentFlier (Reply 13):
What remains of the STL network relative to when TWA controlled it? Can anyone find an old OAG schedule and do a before/after?

i have a TWA timetable August 2001.



Eternal darkness we all should dread. It's hard to party when you're dead.
User currently offlineCkfred From United States of America, joined Apr 2001, 5221 posts, RR: 1
Reply 21, posted (7 years 6 months 4 days 1 hour ago) and read 8778 times:

The summer of 2000 at ORD was just miserable. Between the summer being one of the stormiest that I remember (I've lived in Chicago since 1962) and UA having a meltdown, due to the pilots refusing overtime, AA's operations were a mess.

Having STL would allow AA to reroute passengers, if the weather at ORD went south (Usually Chicago and St. Louis don't have severe thunderstorms or heavy snow at the same time) and it gave O&D traffic for ORD more options. (Once, I couldn't get a non-stop flight out of ORD, but I could change planes at STL, which was much faster than connecting at DFW).

Further, UA and US had 757s with different engines. The plan was for AA to swap TW 757s with UA for US 757s. When the merger didn't go through, AA got stuck with TW's P&W-powered 757d.

Don't forget that AA was going to lease F100s to DC Air, the airline that was supposed to takeover some of US's routes out of DCA. That would have helped AA get rid of a bunch of Fokkers, which had been a headache, and keep the 717s that TW had ordered.

Finally, AA would have gotten all of TW's international routes and authority. AA had ordered 767-300s to replace TW's 767s with P&W engines. But for 9/11, AA would have ordered more 777s and 767s to fly some of the dormant routes.

I do think that as traffic grows, AA will add some flights at STL. AA can't add flights at ORD because of the FAA caps, until the 3rd east-west runway opens and the 2nd control tower is built and operational. That's several years away.


User currently offlineTommy767 From United States of America, joined Aug 2003, 6584 posts, RR: 9
Reply 22, posted (7 years 6 months 4 days 1 hour ago) and read 8743 times:

For what its worth I flew AA in August 2002 from DFW-HNL and when I arrived adjacent to us was another AA 763 pulling in from STL. They had a nonstop to HNL from STL on AA back in those days. Does anybody know if the 763 on that route would have been operated by AA metal or TWA?


"Folks that's the news and I'm outta here!" -- Dennis Miller
User currently offlineBHMNONREV From Australia, joined Aug 2003, 1372 posts, RR: 4
Reply 23, posted (7 years 6 months 4 days ago) and read 8711 times:

Quoting Tommy767 (Reply 22):
For what its worth I flew AA in August 2002 from DFW-HNL and when I arrived adjacent to us was another AA 763 pulling in from STL. They had a nonstop to HNL from STL on AA back in those days. Does anybody know if the 763 on that route would have been operated by AA metal or TWA?

I believe by that point in time the TW 767-300's had been retired, and while the crew may possibly have been TWA I'm almost certain the metal would have been AA, for both STL-HNL and STL-OGG, which was later shifted to ORD.

Please correct me if I'm mistaken....thanks..


User currently offlineJsnww81 From United States of America, joined Jan 2002, 2030 posts, RR: 15
Reply 24, posted (7 years 6 months 3 days 13 hours ago) and read 8447 times:

I'll chime in with a few observations...

To a limited extent, STL does serve as a reliever connecting point for ORD - and it's a godsend when the weather turns bad in Chicago. This past weekend I was attempting to fly from Nashville to Chicago and was originally booked on an AA nonstop. A snowstorm hit ORD and AA promptly canceled all the Chicago flights for a day and a half. I called up the airline, asked to be rerouted through STL, and within ten minutes had a new itinerary. While the airport is in pretty bad shape and it's sad to see so many abandoned gates, connecting at STL is a breeze compared to other large hubs.

I agree that as the airlines get healthier and traffic continues to rebound, AA will once again be glad to have STL in its network. The hub is "right-sized" for American's current climate, but it still has room to grow. ORD is pretty much maxed out at this point, and while the new runways are under construction (I never thought I'd see the day!) there's still almost a decade until the dust will settle. At the end of the day, STL has a place in American's system, and it's encouraging to see that they still call it a hub.


25 PRAirbus : Do not forget, KEEP IN MIND...TWAs FA Union agreed to give up their seniority rights (protection) before TWA was acquired by AA. They were not mislead
26 TransWorldSTL : I was doing my best to agree with you on your reply, until I read this. That is the biggest joke EVER! Everyone knows AA would undoubtedly be hiring
27 Quickmover : I'm not sure exactly what they paid, but after taking TWA through the bankruptcy courts, they got a bargain for what they retained. 1 a fortress hub.
28 Steeler83 : That looks sadder than what US did with PIT... Hey, both dehubbings/downsizings took place around the same time period, too! With lost N/S service to
29 STLGph : St. Louis to Pittsburgh on TWA in August 2001 735a dc9 1055a m80 120p 717 355p m80 650p 717 938p 717 St. Louis to Pittsburgh on TWA/AA in October 200
30 DAYflyer : A good summation but they also wanted the increased pax and revenue.
31 TAN FLYR : One of the other "planned benefits" of STL /TWA was that more price sensitive traffic was to be routed via STL than ORD or DFW (to some extent)..freei
32 FLFlyGuy : Actually, we don't need to hire F/As. The last several months the company has been offering leaves to F/As. I feel sorry for most of the TWA flight a
33 FURUREFA : Actually they only gave away bidding seniority (and some other seniority that i don't remember) but kept their pay seniority. So a TW f/a could have
34 WesternA318 : They basically are all gone, with what AA did to us.
35 TransWorldSTL : AA didn't want TW's senior employees... TW had a very senior workforce, which would have cost AA an arm and a leg. There would have been VERY few TW
36 Noise : Thanks for the responses guys. So in essense, AA bought over TWA in order to compete with UA in the Midwest.
37 WesternA318 : Not necessarily, AA bought TWA, to a) remove a competitor from the market b) acquire a DFW/ORD reliever hub in STL c) Add more MD-80's to the fleet d
38 Ssides : Absolutely. Again, full agreement. Absolutely, positively 100% true.
39 Ssides : " target=_blank>http://www.youtube.com/watch?v=RkhI6...fRXHI OK, was this supposed to make me sympathetic to the TWA employees that were let go? By te
40 Robsawatsky : Technically speaking, AA did not takeover TWA corporation, they bought some of TWA's airline assets out of CH 11 bankruptcy protection and assumed som
41 ToTheStars : Press Release of Senator McCaskill McCaskill Seeks to Protect Workers in Airline Mergers Wednesday, January 24, 2007 WASHINGTON, D.C. - Today, in a Co
42 TransWorldSTL : Yet another reason I'm so glad McCaskill got voted in!
43 Post contains images TeamAmerica : And without AA, what would have happened? This whine has aged nicely; all we need is some nice cheese. Agreed. And in each case there is an ex-employ
44 TransWorldSTL : Possible funding from Carl Ichan (oh boy!) Possible merger/buyout from another airline (I think I remember another airline making a bid near the end?
45 Moman : 1. Not a viable option, employees would have revolted and shut TWA down themselves. 2. Continental and AirTran both expressed interest. 3. Wouldn't h
46 MrSTL : There was another group known as JAG- Jets Acquisition Group, they were a competing bidder during the process but could not get their financing toget
47 Snn2003 : I also remember hearing from someone that GE wanted to buy TWA, can anyone confirm this? Would GE have just dismantled them or let then continue ops?
48 ElmoTheHobo : Dignified? Please, TWA was an amazing airline and did a lot to shape the airline industry, but this whole go down with the ship mentality has got to
49 WesternA318 : Either way, we were screwed, either from bankruptcy.liquidation or through the AA rape/pillage. CO was not in a precarious position in 2000, they had
50 TransWorldSTL : Except Carl Ichan was very persistent in wanting to regain control of TWA.. It was definitely in his best interest to keep TWA alive, at least until
51 WesternA318 : We were talking to the creditors by 1999, trying to find out what could be done. We told them we'd be profitable without the g'damn Karabu. They knew
52 ElmoTheHobo : I'm talking about had Continental bought out TWA at the same time that American did. Yes they could have bought TWA, but it would have been far more
53 Jetdeltamsy : At the time of the acquisition, the economy was in a bit of a slowdown but still thriving. AA was able to acquire a lot of aircraft and trained perso
54 COEI2007 : Does anybody have the current sumber of daily flights/ number of destinations served by AA ex STL????
55 SkyexRamper : Well AA got all the slots that TWA was using at other airports.
56 WesternA318 : CO wouldve done the same thing. Taken the planes they needed, the airport spaces, and most of all, the route authorities to damn near everywhere.
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
AA Week In The Life Of AA posted Sun Oct 29 2006 01:21:45 by YYZACGUY
What Is The Point Of Austral? posted Tue Apr 4 2006 01:28:44 by Canadi>n
What Is The Point Of LCC Out Of SIN? posted Mon Feb 6 2006 16:11:18 by Zarniwoop
What's The Point Of Online Check-in At LAS? posted Wed Nov 23 2005 03:01:21 by L1011
Ryanair - What's The Point Of This? posted Mon Sep 26 2005 21:24:54 by Drinkstrolley
What's The Point Of "Compass Names"? posted Tue May 10 2005 20:38:30 by NWADC9
The Future Of AA Trancons posted Tue Apr 5 2005 03:59:24 by ContinentalEWR
What's The Point Of Ssss? posted Wed Jan 26 2005 21:37:51 by Ahlfors
Where Was The Captain Of AA Flt. 587? posted Thu Oct 28 2004 10:42:26 by Fredadx
The Nerve Of AA posted Sun Sep 26 2004 04:18:04 by Hz747300
What Is The Point Of Delta Shuttle? posted Wed Mar 5 2008 13:01:54 by BR715-A1-30
What Is The Registration Of AA Ship 4XH (MD80)? posted Fri Feb 1 2008 09:14:10 by Tomascubero
What Is The Point Of B787-300 And B787-800? posted Sat Mar 17 2007 02:12:33 by 8herveg
What Would Be The Point Of This? posted Fri Nov 10 2006 22:21:14 by Glom
AA Week In The Life Of AA posted Sun Oct 29 2006 01:21:45 by YYZACGUY
What Is The Point Of Austral? posted Tue Apr 4 2006 01:28:44 by Canadi>n
What Is The Point Of LCC Out Of SIN? posted Mon Feb 6 2006 16:11:18 by Zarniwoop