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Independent Group To Make Bid For TWA  
User currently offlineB757300 From United States of America, joined Dec 2000, 4114 posts, RR: 22
Posted (13 years 10 months 2 weeks 4 days 12 hours ago) and read 3068 times:

Independent group to make bid for TWA


SCOTTSDALE, Ariz., Feb 7 (Reuters) - An independent group of investors said on Wednesday it plans to bid nearly $1 billion for the bankrupt Trans World Airlines , which is in the process of being acquired by American Airlines.

The newly formed group, called Jet Acquisitions Group Inc., said it wants to preserve TWA as an independent airline.

The group said it will propose the elimination of current debt, retention of virtually all current employees, modernization of current facilities and a substantial future expansion of the carrier.

"Our bid is more than twice the size of the nearest offer for TWA that was previously made by American Airlines," said group spokesman Stanford E. Lerch, a principal in the law firm Lerch & DePrima.

American Airlines, the world's No. 2 carrier and a unit of AMR Corp. , has proposed buying financially ailing TWA for $500 million plus the assumption of $3 billion in aircraft leases. TWA filed for Chapter 11 bankruptcy on Jan. 10.

19:03 02-07-01

Copyright 2001 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. All active hyperlinks have been inserted by AOL.


"There is no victory at bargain basement prices."
45 replies: All unread, showing first 25:
 
User currently offlineTWAneedsNOhelp From , joined Dec 1969, posts, RR:
Reply 1, posted (13 years 10 months 2 weeks 4 days 11 hours ago) and read 2790 times:

Sounds like another Aerobanc/Global offer. Why does our beloved TW attract such bottomdwellers???


User currently offlineTWA717_200 From , joined Dec 1969, posts, RR:
Reply 2, posted (13 years 10 months 2 weeks 4 days 11 hours ago) and read 2777 times:

Could this be the Aerobanc group? I noticed this is an actual Reuters article and not just a rumor.

User currently offlineB747-437B From , joined Dec 1969, posts, RR:
Reply 3, posted (13 years 10 months 2 weeks 4 days 10 hours ago) and read 2747 times:

I can confirm that this is the same bid that Aerobanc, Inc was involved with.

User currently offlineTWAneedsNOhelp From , joined Dec 1969, posts, RR:
Reply 4, posted (13 years 10 months 2 weeks 4 days 10 hours ago) and read 2739 times:

"...was involved..."

Does this imply that the Aerobanc offer fell through or that they have withdrawn from it?

rgds
russ


User currently offlineB747-437B From , joined Dec 1969, posts, RR:
Reply 5, posted (13 years 10 months 2 weeks 4 days 10 hours ago) and read 2724 times:

Jet Acquisitions Group, Inc is a new group that represents a consortium of affiliated interests that include Aerobanc, Inc.

Russ - drop me an email if you can. "mendis105@mail.com". I'm gonna be up in your part of the world on the weekend and might actually be swinging into Ithaca.


User currently offlineSegmentKing From , joined Dec 1969, posts, RR:
Reply 6, posted (13 years 10 months 2 weeks 4 days 10 hours ago) and read 2716 times:

I wonder if this is the group that retained David Levine.... west coast base (which California is noted) and it doesn't appear to be related to Icahn...

nate


User currently offlineTWA902fly From United States of America, joined Dec 1999, 3129 posts, RR: 4
Reply 7, posted (13 years 10 months 2 weeks 4 days 9 hours ago) and read 2706 times:

I hope this happens, because TWA is a classic name, and a dounder of aviation in the USA>

-TWA902fly
Chicago Illinois



life wasn't worth the balance, or the crumpled paper it was written on
User currently offlineDCA-ROCguy From United States of America, joined Apr 2000, 4528 posts, RR: 34
Reply 8, posted (13 years 10 months 2 weeks 4 days 5 hours ago) and read 2672 times:

Who else is involved in this group? Would they make TWA viable? It seems to me that with the excellent management TWA has, good product, solid hub structure, young fleet, that all TW needs is to get that damn Karabu vampire off its neck. This trip through bankruptcy is going to do it too, whether AA or this investor group gets TW. Karabu is about to die, sorry Carl. The next step is, DOJ and Congress need to resist the manure that Big Air execs are shoveling at them about how the industry needs to consolidate.

Even if AA gets TW, it still would have only 2 percent more of the USA market than UA has now. Even then there's no excuse to consolidate. US Airways needs to work on its problems more, and UA-US needs to be thrown into the Potomac.

Jim Goodwin told the Senate today that the industry has failed for 60 years to produce the returns investors deserves. What manifest horse puckey. The past five years have been very profitable. Goodwin has made very clear that consolidation is entirely about boosting already-fat profit margins and screwing consumers with higher fares, less seat capacity, especially in medium-size and small markets. He's lucky that none of the Senators on the committee threw Holy Water at him.

Jim



Need a new airline paint scheme? Better call Saul! (Bass that is)
User currently offlineWishIhadalife From , joined Dec 1969, posts, RR:
Reply 9, posted (13 years 10 months 2 weeks 4 days 5 hours ago) and read 2668 times:

We now know why Vitale has been absent for so long. According to the Arizona Republic he is a spokesperson for Jet Acquisitions Group.

I expect he knew quite a bit more then he said in his last few posts...

Hmmm..


User currently offlineNwa747-400 From United States of America, joined Sep 2000, 1337 posts, RR: 4
Reply 10, posted (13 years 10 months 2 weeks 4 days 5 hours ago) and read 2660 times:

Thank goodness!!!!

Now maybe all these mergers won't happen after all!!!

If they can stop AA/TW then UA/US wont go thru either.

Haven't times changed that the DOJ hated NW/CO deal a year or so ago and now it is actually considering allowing these mega merger.

Although, I watched the senate hearings today and the senators did not seem so enthused as they have been.

I guess time will tell...


User currently offlineN628AU From United States of America, joined Oct 2000, 344 posts, RR: 0
Reply 11, posted (13 years 10 months 2 weeks 4 days 4 hours ago) and read 2648 times:

Yes...this is the group that David Levine was doing work for. Holly Hegeman reported this in today's (2/7) planebusiness.com daily banter. According to a statement, this group has no affiliation with Uncle Carl.

User currently offlineTWFirst From Vatican City, joined Apr 2000, 6346 posts, RR: 51
Reply 12, posted (13 years 10 months 2 weeks 3 days 23 hours ago) and read 2641 times:

RUSS!!!! SEE!!! It IS true!!! All of our wildest dreams have come true!!!!



 Nuts



I think I'm going to have the big O now.



An unexamined life isn't worth living.
User currently offlineTWFirst From Vatican City, joined Apr 2000, 6346 posts, RR: 51
Reply 13, posted (13 years 10 months 2 weeks 3 days 22 hours ago) and read 2639 times:

Secret Bid
Mystery Group Offers $1 Billion for TWA
The Associated Press


Feb. 8 — A group of unidentified aviation experts and investors said it would bid nearly $1 billion to acquire Trans World Airlines, doubling the amount American Airlines said it would pay to take over the troubled carrier.



Jet Acquisitions Group Inc. of Scottsdale, Ariz., wants to preserve TWA as an independent airline, retain most of its employees and eventually expand the airline.
“With Congressional hearings now underway to scrutinize the consolidation of the airline industry and its effects on competition and consumer prices we believe our effort to thwart the trend toward consolidation is particularly timely,” spokesman Stanford E. Lerch said in a statement.

Shrouded in Mystery

Michelle Tuchman, a spokeswoman for the company, would not provide details about the group, other than to say that it included “former airline executives and general investors.” Carl Icahn, the billionaire financier who formerly ran TWA, was not involved, she said.

Including the assumption of $3.5 billion in lease obligations and $1.7 billion that would be spent on expanding TWA’s fleet, Tuchman said the total value of Jet Acquisitions’ offer would be $6.2 billion.

American’s bid for TWA included the acquisition of parts of US Airways from United Airlines and a large stake in a new startup carrier for $1.8 billion in cash and $3.5 billion in lease obligations.

Can TWA Survive Alone?

David Stempler, president of the Air Travelers Association, said he doubts TWA could survive as an independent entity—noting that similar-sized airlines such as Pan Am Airlines have gone out of business.

“The best for TWA in terms of its employees, the city of St. Louis, and for airline passengers, is probably to have it folded or merged into a larger airline to continue its operation,” Stempler said.

American, based in Fort Worth, Texas, has said it would pay $500 million for most of TWA’s assets, including up to 190 planes and the St. Louis hub. It also would pay $82 million for a 49 percent stake in DC Air, a minority-owned startup of United Airlines and US Airways that would serve 44 markets out of Washington’s Reagan National Airport.

American’s proposal is awaiting approval of federal regulators.

TWA Will Consider 'Better Legitimate Offer'

“The way it’s set up, anyone is free to bid,” American spokesman John Hotard said in response to Jet Acquisitions’ bid. “They’re free to bid whatever they want.”

A federal judge has extended the deadline for bids for TWA until Feb. 28.

“TWA will consider any higher and better legitimate offer,” TWA spokeswoman Julia Bishop-Cross said.

Edward Manhart, a spokesman for the International Association of Machinists, which represents TWA’s machinists and flight attendants, said the union expected more offers, but didn’t expect one so soon.

“I’ve been telling the membership that until all of the offers are on the table, to save a lot of feelings, we should wait until we see what all the offers are,” Manhart said in St. Louis.

TWA, based in St. Louis, has continued operations while bankruptcy proceedings occur.


Copyright 2001 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.



An unexamined life isn't worth living.
User currently offlineB747-437B From , joined Dec 1969, posts, RR:
Reply 14, posted (13 years 10 months 2 weeks 3 days 22 hours ago) and read 2638 times:

Scottsdale group plans competing bid for TWA


A Scottsdale group of investors has nearly doubled American Airlines' $3.5 billion offer for TWA, officials said Wednesday.


Jet Acquisitions Group Inc., made up of a collection of unidentified investors, will offer $6.2 billion, including $1 billion in cash, for the nation's No. 8 airline, said Michelle Tuchman, a spokeswoman for the group. The group would continue to operate Trans World Airlines as an independent company, she added.

The offer is almost double the $500 million in cash and $3 billion in assumed debt that American Airlines parent AMR is offering as part of the St. Louis-based carrier's Chapter 11 case. TWA filed for bankruptcy protection in January to expedite its sale to AMR in the face of mounting debts and dwindling cash reserves.

"Our group is adamant that TWA should be preserved as an independent and financially viable airline which will provide more choice for airline travelers," Stanford Lerch, a Scottsdale lawyer representing the investors, said in a release.

Another official with the group, Albert Vitale, told The Arizona Republic that there are seven investors, some of them from Arizona. He declined to name any of them. Jet Acquisition's news release said the group has experience in the America West bankruptcy case, among others.

Vitale was optimistic that the eleventh-hour deal, which he said is still being put together, can be pulled off.

"I think the chances are that we're going to walk away with it," said Vitale, an aviation analyst who was formerly with an aircraft leasing company.

Tuchman refused to identify investors in the group, citing confidentiality requirements in the bankruptcy bidding procedures. Final bids must be submitted by Feb. 27, and the auction is set for March 5, according to court papers.

"But I can say that Carl Icahn is not involved in the bid," Tuchman said.


User currently offlineRdctwa From , joined Dec 1969, posts, RR:
Reply 15, posted (13 years 10 months 2 weeks 3 days 21 hours ago) and read 2608 times:

Strange how many people/groups want TWA
when we in such financial problems.


User currently offlineDCA-ROCguy From United States of America, joined Apr 2000, 4528 posts, RR: 34
Reply 16, posted (13 years 10 months 2 weeks 3 days 21 hours ago) and read 2604 times:

As long as Count Icahn-ula isn't involved, and Karabu can be staked through the heart, the Jet Acquisitions group bid needs to be considered. A non-merger buyout of TWA could be the silver bullet to justify DOJ canning all of the consolidation proposals on the table. Which would be very beneficial to consumers, and disappointing to greedy airline execs.

Killing Karabu is vital to STL and 20,000 TWA employees. But it does not merit consolidating the damfool industry and possibly leading to the destruction of low-fare carriers and more fare gouging at medium and small size markets.

Jim



Need a new airline paint scheme? Better call Saul! (Bass that is)
User currently offlineSccutler From United States of America, joined Jan 2000, 5615 posts, RR: 28
Reply 17, posted (13 years 10 months 2 weeks 3 days 21 hours ago) and read 2598 times:

There have been posts in the various threads dealing with this topic, and the topic of airline mergers in general, the essence of which are that airlines must merge and become ever larger to survive. And I think a dispassionate analysis of that theory must conclude that it is plain wrong.

TWA is now a potentially competetive and efficient market participant, saddled with (1) artificially-low yields as a result of the Karabu fiasco; (2) inadequate cash reserves because of being stripped by pror ownership; (3) excessive cost of capital (including leases) for the same reasons.

CO, through shrewd management and good product, built back from the brink to being the effective and efficient competitor it is today; WN has done what it has done, all the while enduring smart-assed comments about how they aren't a "real airline," etc.- but they grew from three planes serving three cities to being the compelling market force that they are today.

If a viable and well-funded group can relieve TWA's capital crisis and operate a revitalized (reVITALE-ized?) TWA, there is no reason why they cannot capitalize on existing strengths (and they are there), and grow strong.

Keep an open mind about this stuff, OK folks?



...three miles from BRONS, clear for the ILS one five approach...
User currently offlineFlashmeister From United States of America, joined Apr 2000, 2903 posts, RR: 6
Reply 18, posted (13 years 10 months 2 weeks 3 days 21 hours ago) and read 2583 times:
Support Airliners.net - become a First Class Member!

This is a great thing! I wonder if Carty would want to pay double what he is for TWA...

DCA-ROCguy is correct that if this group gets TWA, it has a good chance of killing UA-US as well.

Make no mistake, though - this won't kill consolidation in general, it will just delay it. UA is going to acquire someone whether we like it or not - if not US, than America West. DL wants to expand too, and I still think they're best off with Alaska.

Consolidation is here and it will happen. The only question is who will align with who?


User currently offlineDCA-ROCguy From United States of America, joined Apr 2000, 4528 posts, RR: 34
Reply 19, posted (13 years 10 months 2 weeks 3 days 20 hours ago) and read 2579 times:

I'm not as convinced that consolidation is a foregone conclusion. Big Air's ten years of gouging people, esp in medium and small markets, since the late 1980's consolidation, has caused a first in US history (that I know of, at least). Big Air has managed to infuriate the public and Congress enough for airline service and fares to become a potent national political issue. There are an awful lot of Rep. Louise Slaughters out there, from medium markets like ROC that have been gouged and gouged the past ten years. And many of them are Republicans.

Flashmeister's correct that Big Air *wants* to merge; no profit margin ever seems to satisfy them. Jim Goodwin's dumb comment to the Senate yesterday that the airline industry hasn't been profitable for 60 years (wrong) and thus needs to consolidate to deliver suitable returns (read higher fares) isn't going to endear him or his peers to Congress, DOJ, or anyone else except Wall Street.

If AA-TW goes down and UA-US with it, Big Air will probably seek another consolidation round; the only question is now while labor agreements are up, or next year, after labor agreements are settled. It's probably a question of how much labor unrest management and labor are willing to inflict on the traveling public at once, and how best to minimize the damage to the bottom line.

HP doesn't seem to me an attractive takeover target. PHX has an entrenched WN hub, and that's going to depress "yields" (margins) for anyone who buys HP. At least in the next year or two, no Big Air carrier is going to be politically stupid enough to try to predatory price WN out of PHX to raise yields there--not in Senator McCain's back yard. At least not in the current industry structure.

I'd look for AS to be taken over though post haste; it's just a matter of who makes them the most attractive per-share offer. UA probably would want them, but there would be antitrust issues about West Coast service, and if UA loses the US fight they probably won't push that right away. Probably DL or AA.

Jim




Need a new airline paint scheme? Better call Saul! (Bass that is)
User currently offlineSegmentKing From , joined Dec 1969, posts, RR:
Reply 20, posted (13 years 10 months 2 weeks 3 days 20 hours ago) and read 2572 times:

Geeze Albert... and I thought you were only joking about going after TWA when messing w/ the Midwest Wings Airlines project :P

good luck w/ it :P

Nate


User currently offlineAlpha 1 From , joined Dec 1969, posts, RR:
Reply 21, posted (13 years 10 months 2 weeks 3 days 20 hours ago) and read 2564 times:

Name-dropper.  Smile

User currently offlineRdctwa From , joined Dec 1969, posts, RR:
Reply 22, posted (13 years 10 months 2 weeks 3 days 19 hours ago) and read 2559 times:

IMHO, Somehow, somewhere, someplace
Icahn is there. Dont know where, but he is there someplace. Does anyone agree or disagree?

Bob


User currently offlineRdctwa From , joined Dec 1969, posts, RR:
Reply 23, posted (13 years 10 months 2 weeks 3 days 19 hours ago) and read 2557 times:

How does Southwest World Airlines sound?

User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6731 posts, RR: 24
Reply 24, posted (13 years 10 months 2 weeks 3 days 17 hours ago) and read 2535 times:

Actually, the airline industry over its entire history is one of the most UNprofitable industries in America. Consider this, during the recession of 1991 and the few years following, the losses at the major airlines were so large that they cancelled out all profits that had been made in the prior SIXTY years of the airline industry. Certainly the last few years have been very profitable for airlines, but one severe recession and all of those gains will be gone in an instant.

I'll admit Goodwin was wrong to say that consolidation is a necessity...more likely Goodwin needs to learn how to control costs better...something he and many other airlines have failed miserably at doing.

As for the most recent announcement, I am still a little skeptical. I would like to see TWA stick around as an independent carrier. However. I'm also aware that there always seems to be someone foolish enough and wealthy enough to blow hundreds of millions of dollars in the airline industry and then simply walk away when they realize its not the profit maker they had hoped for. I need to see more details on this plan for TWA before I could really make a good assessment of it.


25 Travelin man : Since when did capitalism become a BAD thing? I'm so sick of people complaining about "anti-competitive", "bad for customers" blah blah blah. Here's e
26 FLYTWA : I will believe this offer when an actual bid is made. I also would not doubt that AMR new all to well that their bid was a lowball offer. I imagine th
27 AA-SAn : I couldn't have said it better FLYTWA... Let's remember that AA has a lot at stake with their investment in TWA, and they're not going to just let it
28 DCA-ROCguy : Travelin Man, you win the Neville Chamberlain Naivete Award for your view of economics and human nature. Pure Laissez-faire capitalism has never been
29 Lowfareair : I hate consolidation. All the majors have to learn to do is lower costs. AirTran has less than half the CASM on 625 mile routes of United(According to
30 Pilot1113 : Who is Albert Vitale and what does he represent? Is he 'evil' like Ichan was? - Neil Harrison
31 Booyala : Username: Pilot1113 Posted 02-08-01 22:28 and read 6 times. Who is Albert Vitale and what does he represent? Is he 'evil' like Ichan was? - Neil Harri
32 Post contains links and images B747-437B : Albert Vitale is a deadbeat from Florida who dreams of an airline utopia! Seriously though, Albert is none other than our very own ACVitale whose prof
33 AA@DFW : Ok, So let's say that TWA reviews the deal and decides they would rather go with AA. Can they do that? Do they have the ultimate decision? Or is it th
34 SegmentKing : Sean, I can't vouch if he's evil... I was only around him for 7 weeks :P I can say this about Albert... his love and passion for the industry definite
35 TWA717_200 : I'm just going to sit back and see what happens.
36 Fleet Service : An offer is just that, an offer. Time will tell,as it always does. Btw Al,Good day to you sir. lol
37 Flashmeister : DCA-ROCguy, I still would like to see how you can seriously worry about the Big 3 crushing Southwest. No one knows how to compete with them in the cur
38 Toxtethogrady : I find it curious this $1 billion deal is still awaiting the final details on financing. I think it is a press release in search of venture capital. W
39 DCA-ROCguy : Flashmeister, there's nothing I'd like more than to agree with you that the low-fare carriers could survive a Big 3. And if God forbid the supermerger
40 Post contains images Pilot1113 : I guess I was wrong about Viatle. I guess since he's an airliners.net member, I'd better "walk egg shells" when he's around, if I want a job in the fu
41 SegmentKing : I don't think he's CEO of JAG... he is CEO of Midwest Wings Airlines, a venture we both started.... I don't think he'll be leaking info.. we never tal
42 Redraider : From Yahoo and AP... Analysts Skeptical of TWA Bid By WALTER BERRY Associated Press Writer PHOENIX (AP) -- A secretive Arizona investment group's plan
43 Cody : In 1980, everyone "chuckled" when Texas Air claimed they wanted Continental.
44 N628AU : Kudos to DCA-ROC. Man, you really have nailed the essence of this on the head. A little basic knowledge in economics goes a long way, huh.
45 Sccutler : First, DCA-ROCguy- Your usual thorough analysis is well-crafted, but the one thing on which I disagree with you is this: A well-managed and financiall
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