The Airline Deregulation Act (Pub.L. 95-504) is a United States federal law signed into law on October 24, 1978. The main purpose of the act was to remove government control over fares, routes and market entry (of new airlines) from commercial aviation. The Civil Aeronautics Board's powers of regulation were to be phased out, eventually allowing passengers to be exposed to market forces in the airline industry. The Act, however, did not remove or diminish the FAA's regulatory powers over all aspects of airline safety.
The Airline Deregulation Act (Pub.L. 95-504) is a United States federal law signed into law on October 24, 1978. The main purpose of the act was to remove government control over fares, routes and market entry (of new airlines) from commercial aviation. The Civil Aeronautics Board's powers of regulation were to be phased out, eventually allowing passengers to be exposed to market forces in the airline industry. The Act, however, did not remove or diminish the FAA's regulatory powers over all aspects of airline safety.
I can't seem to find exactly when the act went into effect.
Anyhoo,
Was TWA management for or against deregulation ?
What were TWA's first moves in this new era. What routes did they immediately start? Asset purchases, leasing of aircraft for expansion, new aircraft orders, merger talk,....etc.............
WA707atMSP From United States of America, joined Oct 2006, 2041 posts, RR: 13 Reply 1, posted (1 year 10 months 1 day 17 hours ago) and read 3503 times:
The airline deregulation act went into effect in Oct, 1978. TWA management was strongly opposed to deregulation.
According to TWA's 1978 annual report, in 1978 / 79, TWA added the following routes:
ORD-COS
PIT-SYR / PVD / PHX
PHX-PSP / LAS
LAS-RNO
SAN-JFK
PHL-MCO
STL-SAN / TUS / SEA / OMA / LIT / TYS / FLL / MCO / BNA / TOL / MSP
TWA added these routes to expand their hub at STL, and build mini hubs at PIT and PHX.
Most of these routes were relatively short. However, TWA did not have enough aircraft that were suitable for short haul routes in their fleet, and at the same time deregulation was enacted, agreed to sell all nineteen of their DC-9-10s, mainly to Texas International. This meant TWA was forced to serve many of their new routes, and their existing route system, with fuel inefficient 727-100s and 707s. It was not uncommon for TWA to use 707s on routes as short as STL-DTW / IND in the late 1970s, because TWA simply lacked enough aircraft that were suitable for short haul routes.
The 1979 energy crisis slammed TWA very hard. TWA was forced to cancel a planned STL-HNL route that would have been operated with 707-331s, because the run up in jet fuel prices meant the route would have needed more than a 100% load factor to break even. For the same reason, TWA suspended GVA, SNN, CMN, DUB, NCE, and Santa Maria in the Azores, because these routes were no longer profitable with 707s, and did not generate enough traffic to fill L-1011s or 747s. TWA's PIT and PHX mini hubs were abandoned, and TWA sharply reduced their long time presence at ORD, because TWA was unable to compete with US, UA, and AA at these cities.
At the same time, TW Corporation, the parent of TWA, chose to buy the Century 21 real estate chain, the Hardees and Quincy's restaurant chains, and Dunill Employee Placement Services, instead of buying more modern aircraft for TWA. In 1980, TWA had the chance to purchase 727-200s from Braniff, to reduce their fleet of 707s, but TW Corporation chose to deploy cash elsewhere, leaving TWA with the oldest, least fuel efficient, fleet of the US major airlines.
TWA's mismanagement caused the airline to post huge losses, and shrink in size, in the early years of deregulation, and the airline never recovered from these mistakes.
AeroWesty From United States of America, joined Oct 2004, 18833 posts, RR: 64 Reply 2, posted (1 year 10 months 1 day 14 hours ago) and read 3396 times:
The seven most major events post-regulation from memory:
•Almost immediately 1: Milk-run flying from east/midwest through southwest to far west/west coast dropped significantly as STL flying is built up
•Almost immediately 2: Domestic First Class fares double (SFO/LAX - JFK goes from about $275 to about $500 one-way)
PacificClipper From United States of America, joined Aug 2009, 311 posts, RR: 0 Reply 3, posted (1 year 10 months 1 day 13 hours ago) and read 3367 times:
Quoting WA707atMSP (Reply 1): TWA's mismanagement caused the airline to post huge losses, and shrink in size, in the early years of deregulation, and the airline never recovered from these mistakes.
milesrich From United States of America, joined Jul 2003, 1855 posts, RR: 7 Reply 4, posted (1 year 10 months 1 day 13 hours ago) and read 3365 times:
Quoting WA707atMSP (Reply 1): At the same time, TW Corporation, the parent of TWA, chose to buy the Century 21 real estate chain, the Hardees and Quincy's restaurant chains, and Dunill Employee Placement Services, instead of buying more modern aircraft for TWA.
WA707, you usually don't post stuff like this. I suggest you check your dates. TWA owned Canteen Corporation for years and when the airline was spun off, Canteen became a separate company. I think, and I may be wrong, that the Hardees franchises and Quincy's were acquired by the spinoff company, long after the airline had been sold to Icahn. The fact is that after deregulation, because of poor management, TWA's international routes, Hilton International Hotels, and Canteen were worth much more than the total capitalization of TWA as a whole and since the domestic airline was losing money for the reasons set forth above, (an old fuel inefficient fleet of 707's, no DC-9's or similar aircraft like 737's for shorter routes, and poor feed at the hubs).
Here is an article from Fortune Magazine written in 1987.
DETA737 From Portugal, joined Oct 2000, 596 posts, RR: 0 Reply 5, posted (1 year 10 months 1 day 13 hours ago) and read 3359 times:
In 1978 they also restarted flying to Frankfurt after dropping service to Germany in 1975 due to the route swap with Pan Am.
Around that time they also started adding flights to PIT making it a mini-hub. I found an article from the Pittsburgh Press dated September 20, 1978 where it talks about TWA's expansion in that city adding a PIT-PHL-LHR-FRA flight along with non-stop service to MCI, additional fights to BOS, CMH and CVG, DAY and nonstop service to BDL and PHX. The article states that this would make PIT TWA's third largest domestic station behind ORD and STL with 46 daily departures.
I found another article from October of 1979 in the Miami News highlighting TWA's expansion to Florida with 15 daily nonstops to Miami and 8 into Fort Lauderdale, up from just two to MIA in 1978. For 1979 TWA planned to have 42 daily non-stops out of Florida.
jfk777 From United States of America, joined Aug 2006, 7345 posts, RR: 7 Reply 6, posted (1 year 10 months 1 day 6 hours ago) and read 3210 times:
Quoting DETA737 (Reply 5): found another article from October of 1979 in the Miami News highlighting TWA's expansion to Florida with 15 daily nonstops to Miami and 8 into Fort Lauderdale, up from just two to MIA in 1978. For 1979 TWA planned to have 42 daily non-stops out of Florida.
TWA did expand heavily into Florida, into PBI they started flying multiple dailys to LGA that lasted for years, PBI saw L-1011 on the winter when demand to Europe was slow.
WA707atMSP From United States of America, joined Oct 2006, 2041 posts, RR: 13 Reply 7, posted (1 year 10 months 1 day 4 hours ago) and read 3092 times:
Quoting milesrich (Reply 4): Quoting WA707atMSP (Reply 1):
At the same time, TW Corporation, the parent of TWA, chose to buy the Century 21 real estate chain, the Hardees and Quincy's restaurant chains, and Dunill Employee Placement Services, instead of buying more modern aircraft for TWA.
WA707, you usually don't post stuff like this. I suggest you check your dates. TWA owned Canteen Corporation for years and when the airline was spun off, Canteen became a separate company. I think, and I may be wrong, that the Hardees franchises and Quincy's were acquired by the spinoff company, long after the airline had been sold to Icahn.
I did check my dates - my copy of TWA's 1979 annual report was on my desk when I was writing my earlier posting
Canteen was acquired by TWA in 1973. Dunhill was acquired by TWA in 1977 / 78, and combined with Canteen rather than being operated as a separate subsidiary of TWA. I have no idea why TWA did this, because there are minimal synergies between a company that operated cafeterias (Canteen) and a company that specialized in managerial headhunting (Dunhill), but there must have been some logical reason for the decision.
Century 21 and Spartan Food Services (the parent of Quincy's / Hardees) were acquired by TW Corporation in 1979, and their logos are on the cover of TW Corporation's 1979 annual report, along with the logos of TWA, Canteen, and Hilton International.
In 1983 / 84, TWA was spun off from TW Corporation, and became a stand alone corporation whose only division was the airline. It was Trans World Airlines, Incorporated, that was taken over by Icahn in 1985.
Tomassjc From United States of America, joined Jan 2010, 657 posts, RR: 1 Reply 8, posted (1 year 10 months 1 day 2 hours ago) and read 2982 times:
Quoting AeroWesty (Reply 2): •Almost immediately 1: Milk-run flying from east/midwest through southwest to far west/west coast dropped significantly as STL flying is built up
Yes, they dropped a lot of point to point flying too, especially from LAX, where I was employed with them. I recall nonstops from LAX to places like IND/CVG/DAY/CMH/PIT/PHL/BWI and EWR went away. A big group of CSAs were furloughed/bumped out after Labor Day 1979, myself included. Didn't get a recall notice until the Carl Ichan days a few years later. ("No thank you...I've moved on")
Tom SJC
When once you have tasted flight, you will forever walk the Earth with your eyes turned skyward -Leonardo DaVinci
Tan Flyr From United States of America, joined Aug 2000, 1847 posts, RR: 0 Reply 9, posted (1 year 10 months 22 hours ago) and read 2810 times:
Quoting Tomassjc (Reply 8): Yes, they dropped a lot of point to point flying too, especially from LAX, where I was employed with them. I recall nonstops from LAX to places like IND/CVG/DAY/CMH/PIT/PHL/BWI and EWR went away. A big group of CSAs were furloughed/bumped out after Labor Day 1979, myself included. Didn't get a recall notice until the Carl Ichan days a few years later. ("No thank you...I've moved on")
Not quite..LAX to IND/DAY or CMH was active well into the 80's as I lived just 3 miles from IND and many nights could see teh 1011 arriving from LAX. I believe it was active into 85 or so at least.
I'll have to check departed flights when I have more time.
Tomassjc From United States of America, joined Jan 2010, 657 posts, RR: 1 Reply 10, posted (1 year 10 months 20 hours ago) and read 2730 times:
Quoting Tan Flyr (Reply 9): Not quite..LAX to IND/DAY or CMH was active well into the 80's
OK ...let's just say a lot of service was dropped in the early 80s....it kind of all runs together after 30 years! I just remember we went from around 50 flights a day at LAX when I started in early 1978 to around 30 when I was furloughed in Fall 79. If I recall by the late 80s TWA was down to about 12 departures a day from LAX to mostly JFK and STL, and seniority was 20 years plus at the counter. A sad demise.
Tom SJC
When once you have tasted flight, you will forever walk the Earth with your eyes turned skyward -Leonardo DaVinci
milesrich From United States of America, joined Jul 2003, 1855 posts, RR: 7 Reply 11, posted (1 year 10 months 20 hours ago) and read 2715 times:
Quoting WA707atMSP (Reply 7): I did check my dates - my copy of TWA's 1979 annual report was on my desk when I was writing my earlier posting
Canteen was acquired by TWA in 1973. Dunhill was acquired by TWA in 1977 / 78, and combined with Canteen rather than being operated as a separate subsidiary of TWA. I have no idea why TWA did this, because there are minimal synergies between a company that operated cafeterias (Canteen) and a company that specialized in managerial headhunting (Dunhill), but there must have been some logical reason for the decision.
Century 21 and Spartan Food Services (the parent of Quincy's / Hardees) were acquired by TW Corporation in 1979, and their logos are on the cover of TW Corporation's 1979 annual report, along with the logos of TWA, Canteen, and Hilton International.
In 1983 / 84, TWA was spun off from TW Corporation, and became a stand alone corporation whose only division was the airline. It was Trans World Airlines, Incorporated, that was taken over by Icahn in 1985.
I stand corrected, but Spartan Food Services, which owned franchise restaurants, not Hardees itself, was a good fit with Canteen that was already in the food service business, and to say that TWA spent money on these businesses rather than on their domestic airline is sort of unfair. I don't know how they did with Century 21 but I don't think it was particularly capital intensive. Management is charged with looking out for the stockholders, and the stockholders of TW Corporation, that received stock and I believe cash did much better than the owners of the Trans World Airlines, Inc. did. Odyssey Partners, with which I have some personal knowledge, recognized that the value of the TW Corporation without the domestic airline was greater than with it. Odyssey was not successful in gaining control and breaking up the company, but a few years later, others were and took Odyssey's plan and broke up the company. And as history proved, without the money making non airline subsidiaries, TWA was not exactly a good place to invest your money. We can debate all these issues until the end of time, but as I have pointed out before, there are two airlines that were operating in the US in 1978 that are still operating today in some form or other that have not filed for Chapter 11 protection and wiped out their shareholders, American, and Southwest. Deregulation may have been a success for the public and that is debatable, but it certainly was not a good deal in the long run for any of the carriers around in 1978 except Southwest and perhaps American. Corporations exist to increase shareholder value. They have no other real reason for existing.
AeroWesty From United States of America, joined Oct 2004, 18833 posts, RR: 64 Reply 12, posted (1 year 10 months 19 hours ago) and read 2627 times:
Quoting Tan Flyr (Reply 9): Not quite..LAX to IND/DAY or CMH was active well into the 80's as I lived just 3 miles from IND and many nights could see teh 1011 arriving from LAX
To clarify, what I meant by milk-run flying were routings that in some ways still mirrored the patterns going back to days of propellor aircraft.
For example: The first trip I made from SFO to Vegas was around Thanksgiving of 1979 or 1980 (whichever it was--I was there the night of the MGM blaze), and the 727-100 down continued on to Tucson, I think, then out for a couple of stops in the midwest. The return was about the same, with the flight having originated somewhere in the east or midwest, not touching St. Louis on its way in, IIRC. I recall this wasn't a singular route like that that day. I'd have to pull an old schedule for exact examples. I have one from June '79 that has the summer schedule of flying in it, plus fare information for all the routes.
Tan Flyr From United States of America, joined Aug 2000, 1847 posts, RR: 0 Reply 13, posted (1 year 10 months 18 hours ago) and read 2575 times:
Quoting AeroWesty (Reply 12): To clarify, what I meant by milk-run flying were routings that in some ways still mirrored the patterns going back to days of propellor aircraft.
For example: The first trip I made from SFO to Vegas was around Thanksgiving of 1979 or 1980 (whichever it was--I was there the night of the MGM blaze), and the 727-100 down continued on to Tucson, I think, then out for a couple of stops in the midwest. The return was about the same, with the flight having originated somewhere in the east or midwest, not touching St. Louis on its way in, IIRC. I recall this wasn't a singular route like that that day. I'd have to pull an old schedule for exact examples. I have one from June '79 that has the summer schedule of flying in it, plus fare information for all the routes.
OH yes, for sure..You are correct...up to/ thru the mid-70's TWA operated a slew of Ohio valley runs with various combinations between PIT in the east and either STL or MCI in the west. I recall from IND 707 & 727 at times to CVG/CMH/CLE and maybe SDF from time to time.
Many seemed to start at either LGA or DCA and like you mentioned make 5 or six stops enroute to PHX or LAX or LAS.
TrijetsRMissed From United States of America, joined Oct 2006, 2098 posts, RR: 6 Reply 16, posted (1 year 10 months 13 hours ago) and read 2376 times:
Quoting WA707atMSP (Reply 1): In 1980, TWA had the chance to purchase 727-200s from Braniff, to reduce their fleet of 707s, but TW Corporation chose to deploy cash elsewhere, leaving TWA with the oldest, least fuel efficient, fleet of the US major airlines.
It was not long after when TW began receiving deliveries of brand new MD-82s and 762s.
BHMNONREV From Australia, joined Aug 2003, 1283 posts, RR: 4 Reply 17, posted (1 year 10 months 13 hours ago) and read 2359 times:
Quoting Tan Flyr (Reply 13): Quoting AeroWesty (Reply 12):
To clarify, what I meant by milk-run flying were routings that in some ways still mirrored the patterns going back to days of propellor aircraft.
For example: The first trip I made from SFO to Vegas was around Thanksgiving of 1979 or 1980 (whichever it was--I was there the night of the MGM blaze), and the 727-100 down continued on to Tucson, I think, then out for a couple of stops in the midwest. The return was about the same, with the flight having originated somewhere in the east or midwest, not touching St. Louis on its way in, IIRC. I recall this wasn't a singular route like that that day. I'd have to pull an old schedule for exact examples. I have one from June '79 that has the summer schedule of flying in it, plus fare information for all the routes.
OH yes, for sure..You are correct...up to/ thru the mid-70's TWA operated a slew of Ohio valley runs with various combinations between PIT in the east and either STL or MCI in the west. I recall from IND 707 & 727 at times to CVG/CMH/CLE and maybe SDF from time to time.
Many seemed to start at either LGA or DCA and like you mentioned make 5 or six stops enroute to PHX or LAX or LAS.
In May or June of '77 I was on a TW 707 doing an SFO-STL-DAY-CMH-PIT-BOS run. I remember most of the transcon runs thru STL had similar routings, ala LAX-OKC-TUL-STL-IND-PIT-JFK..etc
WA707atMSP From United States of America, joined Oct 2006, 2041 posts, RR: 13 Reply 19, posted (1 year 10 months 3 hours ago) and read 2170 times:
Quoting milesrich (Reply 11): to say that TWA spent money on these businesses rather than on their domestic airline is sort of unfair.
After TW Corporation spun off TWA, top management of TWA was quoted as saying that, when TW Corporation was diversifying in the late 1970s, it looked at the relative profits between buying new aircraft for TWA, or buying non-airline businesses, and the shareholder value generated by purchasing non airline businesses was higher than the shareholder value generated by buying aircraft for TWA.
Quoting milesrich (Reply 11): Management is charged with looking out for the stockholders, and the stockholders of TW Corporation, that received stock and I believe cash did much better than the owners of the Trans World Airlines, Inc. did.
Quoting milesrich (Reply 11): Corporations exist to increase shareholder value. They have no other real reason for existing.
I agree with you 100%. My point was that I feel in the late 1970s, the interests of TW Corporation's stockholders diverged from the interests of the airline. TW Corporation's diversification strategy was in the best interests of its stockholders, but it damaged the airline.
At the risk of going OT, I also feel that Pan Am's stockholders would have been much better off if, in the early 1980s, Pan Am's management had kept the Pan Am building and Intercontinental Hotels, sold off the assets of Pan Am to the highest bidder, and invested the proceeds in the hotel chain and real estate. Instead of doing this, Pan Am sold off the Pan Am building and Intercontinental, and used the proceeds from the sales to temporarily offset the airline's losses. This strategy was in the best interests of the airline at the time, but it meant that Pan Am's shareholders were left with nothing when the company liquidated in 1991.
AeroWesty From United States of America, joined Oct 2004, 18833 posts, RR: 64 Reply 20, posted (1 year 9 months 4 weeks 1 day 20 hours ago) and read 1996 times:
Quoting Blueman87 (Reply 18): i wonder if icahn wasnt there Would TWA still be here
The TWA board was so opposed to Icahn, they petitioned the Transportation Dept. to have him and his associates declared unfit to operate air transport services before the corporate raid could be completed.
Seeing as how Icahn ended up using TWA as his own personal ATM, there still may have been a chance for TWA to survive. One of the last merger rumors was with HP. While many weren't excited about that at the time, we've got to admit, HP/US is still around. Would an HP/TW be around today? Who knows.
There are some interesting threads here in the archives if you search for 'Karabu'.
WesternA318 From United States of America, joined Oct 2004, 5395 posts, RR: 25 Reply 21, posted (1 year 9 months 4 weeks 1 day 20 hours ago) and read 1990 times:
Quoting AeroWesty (Reply 20): Seeing as how Icahn ended up using TWA as his own personal ATM, there still may have been a chance for TWA to survive. One of the last merger rumors was with HP. While many weren't excited about that at the time, we've got to admit, HP/US is still around. Would an HP/TW be around today? Who knows.
There were also talks with the then-new AirTran in 1997 or so...I have newspaper clippings from the time. Interesting stuff.
Woohoo! Back to Beirut in Oct '13! (Along with a stop in DOH for 4 days)
OzarkD9S From United States of America, joined Oct 2001, 4680 posts, RR: 23 Reply 22, posted (1 year 9 months 4 weeks 1 day 18 hours ago) and read 1910 times:
There were also talks with the then-new AirTran in 1997 or so...I have newspaper clippings from the time. Interesting stuff.
Almost every airline at one time or another "kicked the tires" at TWA. Especially post-Icahn. Now this might be heresy, but TWA might have been better off if Lorenzo and Texas Air had gotten a hold on them in the mid 80's. Imagine a CO/TW
combo in the mid 80's (pre-Icahn) STL, IAH, DEN, JFK, and a probable LAX focus city. The resulting combo would have most likely gone through the same BS that CO went through, but emerged as a lean mean machine.
WesternA318 From United States of America, joined Oct 2004, 5395 posts, RR: 25 Reply 23, posted (1 year 9 months 4 weeks 21 hours ago) and read 1704 times:
Quoting OzarkD9S (Reply 22): The resulting combo would have most likely gone through the same BS that CO went through, but emerged as a lean mean machine.
Not so sure about that...we had some pretty selfish unions at TWA, not like the blowhards at EA, but still pretty crappy. CO/TW merging together would've been just as bad a disaster as the PEX/FL?NY Big Bang that CO did in 1987.
Also, right after the deregulation bill passed, TWA was looking for a 707 replacement, and found one in the MD-80 and the 767-200. The MD-80 however, was less capacity than the 707's and were intended for short to medium haul routes in the US while the 767's did the trunk routes, and transcons (this was before the days of TATL in a twinjet). I also believe at the time, they were trying to get rid of the 747SP's they had in the fleet. I could be wrong on that, as I was on a 747SP from JFK to ATH in 1984 and in 1985.
Woohoo! Back to Beirut in Oct '13! (Along with a stop in DOH for 4 days)
Klima From United States of America, joined Dec 2006, 206 posts, RR: 0 Reply 24, posted (1 year 9 months 4 weeks 20 hours ago) and read 1662 times:
Was there ever a serious discussion at TWA in the 80s about getting rid of the 747s? If I remember correctly, TWA was the first airline to fly the 767 TATL. How come the airline didn't acquire more 767s and get rid of the old, too big 747s? I do remember TWA was interested in the A330, but nothing ever came of that. It seems like TWA didn't take modernizing its fleet seriously until the mid-late 1990s. Did this have more to do with Ichan being out of the picture at that point?
25 WesternA318: An order was placed for 10. The reason TWA never ordered any significant amount of aircraft was simply becasue of Carl Icahn and his style of running
26 PI767: Okay,,,,,,here is some detail to the LAX pull-down and the following years: http://www.departedflights.com/TWLAXhub.html
27 PI767: Here is some interesting insight from the book titled: "The Official 1981-1982 Guide to Airline Careers," published in 1981. GENERAL INFORMATION TWA i
28 milesrich: In addition to the downsizing at ORD, they also dropped routes such as STL-ATL in 1979, although they later restarted service.
29 OzarkD9S: Yes, but in the first two bankruptcies the unions agreed to concessions in an attempt to save the airline, something the mechanics at EA rejected for
Sponsor Message: 
From United States of America, joined Oct 2001, 5722 posts, 
From Portugal, joined Oct 2000, 596 posts, 
From Australia, joined Nov 2005, 459 posts, 
Printer friendly format 
