TriL1011Star
Posts: 50
Joined: Mon Jan 13, 2014 12:14 am

Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 2:25 pm

What are your opinions on this?
 
PC12Fan
Posts: 1979
Joined: Sat Jan 27, 2007 11:50 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 2:41 pm

Tough to say, but I would definitely say TWA would have had a much better shot at it. Then again, I think they would have had a tough time with all of the mega carriers out there now unless they came up with a unique business plan that was radically different from the norm.

Either way, Long live That Wonderful Airline!
Just when I think you've said the stupidest thing ever, you keep talkin'!
 
jetjeanes
Posts: 899
Joined: Fri Oct 15, 2004 6:42 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 2:46 pm

I believe they could have emerged and down sized and made it,, Icahn was a snake in the grass,, he was selling tickets through his travel agency he owned cheaper than twa could sell their tickets for,,, he is know for being ruthless,, I have no respect for him in the biz world

[Edited 2014-03-08 06:55:44]
i can see for 80 miles
 
SpaceshipDC10
Posts: 4505
Joined: Tue Jan 01, 2013 11:44 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 2:49 pm

Without Icahn, some downsizing through fleet renewal i.e. dropping these old and uneconomical 747s earlier, and probably the TriStar too, at least part of these, maybe TWA would have lived longer.
 
CF-CPI
Posts: 1351
Joined: Sat Nov 18, 2000 12:54 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 3:03 pm

In his TWA history, written in the early 80s, Robert J Serling made a central point that TWA never really recovered from Howard Hughes, and that the aging fleet we associate with them was a legacy going back to the late 50s. The early 80s were critical: while AA had retired the 707 in late 1981, TW soldiered on with it until 1983. The airline did not have the funds to acquire L1011-500 white tails from Lockheed at rock bottom prices (these instead went to Royal Jordanian). One aspect of the Icahn years, namely an order for the A330, might have actually allowed them to clean house sooner (an old and varied 747-100 fleet, etc). The replacement of the domestic L10s with 757s was an inspired move, but I can't help but think it was too little too late. Just my $0.02.
 
PHX Flyer
Posts: 541
Joined: Tue Apr 17, 2001 9:52 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 3:07 pm

After all these years, I think it's time to mellow out a bit with regard to Icahn. The man isn't a monster, he is actually a great philanthropist, and he was also very proud of his ownership of TWA.Financial advisors always tell you not to be emotional in your investment decisions. I think TWA may have been the one investment, where Icahn had gotten emotional, and he was a proud airline owner. It probably explains why he was looking to buy it back, when TWA was nearing the end. I am little bit provocative now, but would say TWA might still be around, if the unions back then had been more open to and supportive of his plan to restructure the airline. The pilot salary reform at Delta in the late 1990s was far mor radical than anything Icahn had ever proposed, and while I appreciate the service that flight attendants provide, I think, it was absurd that they were making far more money than teachers back then, with less than a month of vocational training invested in their career.

It was not Icahn, who destroyed TWA, It was the Trans World Corporation first, and then the unions, who failed to adapt to the challenges that came with deregulation.
 
CIDFlyer
Posts: 1901
Joined: Wed Apr 13, 2005 7:19 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 3:09 pm

I do believe they would be around in some form today, maybe not as TWA, but I could have seen them merged into the current USAirways. A think a three way merger of US/TWA/HP would have probably happened. US would have its midwest hub in STL I think US was at one time interested in TWA, as was AirTran, what scared them away was the financials. STL probably would still be a major hub today, US would have had a pretty balanced map with PHX for the west, STL for the midwest, CLT for the southeast and PHL for northeast. Just my two cents...always fun to think of the what ifs.
 
User avatar
Polot
Posts: 5243
Joined: Thu Jul 28, 2011 3:01 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 3:21 pm

Quoting PHX Flyer (Reply 5):
After all these years, I think it's time to mellow out a bit with regard to Icahn. The man isn't a monster, he is actually a great philanthropist, and he was also very proud of his ownership of TWA.Financial advisors always tell you not to be emotional in your investment decisions.

Its also important to recognize that Ichan gain control because TWA was in such terrible financial straits. He didn't take a hugely profitable airline and run it into the ground, although he did significantly gimp the airline for the future.
 
Maverick623
Posts: 4650
Joined: Thu Nov 30, 2006 9:13 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 4:27 pm

Quoting CF-CPI (Reply 4):
The early 80s were critical: while AA had retired the 707 in late 1981, TW soldiered on with it until 1983.

While the rest of your post makes sense, this does not. 2 extra years of flying an airplane compared to a competitor, by itself, is not a sign of weakness.
"PHX is Phoenix, PDX is the other city" -777Way
 
User avatar
DL_Mech
Posts: 2083
Joined: Fri Feb 18, 2000 7:48 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 4:40 pm

Quoting Maverick623 (Reply 8):
While the rest of your post makes sense, this does not. 2 extra years of flying an airplane compared to a competitor, by itself, is not a sign of weakness.

I think there is more to this. While TWA replaced some 707s with 762s, it did not replace them with lower cost, used 727s from BN like AA did.
This plane is built to withstand anything... except a bad pilot.
 
CF-CPI
Posts: 1351
Joined: Sat Nov 18, 2000 12:54 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 5:02 pm

Quoting Maverick623 (Reply 8):
2 extra years of flying an airplane compared to a competitor, by itself, is not a sign of weakness.

By itself, I would agree. In an era when a given type is inefficient (second oil crisis had hit in 1979) and relegated to routes which could be handled by 727s (in 1980/81) or 757s (beginning January 1983), it was a serious weakness.
 
User avatar
SEPilot
Posts: 5019
Joined: Sat Dec 30, 2006 10:21 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 5:05 pm

TWA would definitely be long gone by now regardless of Icahn. It was not strong enough, and would not have survived the post-9/11 slump. If AA had not swallowed it some other carrier would have. And I would not be surprised if Icahn in fact did not prolong its life, rather than shorten it.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
masseybrown
Posts: 4488
Joined: Wed Dec 11, 2002 2:40 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 5:55 pm

Could they have survived? I don't think we can say more than 'maybe'.

I always faulted TWA management for not finding some way to get out of Icahn's clutches. AA did it. Why couldn't TWA have reorganized itself similarly on their own years prior to the merger? The NW leveraged buy-out comes to mind. Admittedly the debt incurred in that buy-out hamstrung NW for years, but they made it. I think a more inventive, risk-taking TWA could have found a way, too.
 
commavia
Posts: 10071
Joined: Mon Apr 25, 2005 2:30 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 6:06 pm

I think the short answer to the question is a fairly definitive "no." Not only was TWA in such a weakened financial state - yes, before Icahn, and also definitely after - that it was struggling to survive to begin with, but after 9/11, Afghanistan, Iraq, SARS, bankruptcies, etc., I find it very difficult to imagine how TWA could ever possibly have survived this long. Put another way: if venerable brands and airlines far larger and far stronger than TWA was then, such as Continental, Northwest and even USAirways, no longer or soon no longer will exist, I see now conceivable way TWA would have survived - as a brand, let alone a company.

If I remember correctly - and incredibly, while it seems like yesterday it was over 13 years ago - at the time of the AA acquisition, I believe it was said that at that point TWA was down to only a few weeks worth of cash remaining. And as we all know, the world only got far more challenging after January 2001 when the takeover occurred.

[Edited 2014-03-08 10:08:56]
 
802flyguy
Posts: 243
Joined: Thu May 10, 2012 1:56 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 6:19 pm

Quoting PHX Flyer (Reply 5):
After all these years, I think it's time to mellow out a bit with regard to Icahn. The man isn't a monster, he is actually a great philanthropist, and he was also very proud of his ownership of TWA..

Seriously? I suppose that you probably think Lorenzo wasn't such a bad fellow after all, either. Icahn's Karabu deal did far more damage to TWA than those greedy unions...
 
PHX Flyer
Posts: 541
Joined: Tue Apr 17, 2001 9:52 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 6:22 pm

Quoting MasseyBrown (Reply 12):
I always faulted TWA management for not finding some way to get out of Icahn's clutches.

Karabu was not what brought TWA down. The final crucial mistakes were made during the second bankruptcy (during which TWA could have negotiated term changes, but didn't) and shortly thereafter. One major factor that contributed to the demise of TWA was the excessive aircraft leasing rates. TWA paid leasing rates for 30-year-old DC-9s that were equal or higher than what ompetitors paid for new planes, while at the same time they were stuck with an outdated fleet with the highest CASM in the industry. Then came the 747 disaster in 1996 (and no, I am not talking about TW800 here), which led to Erickson getting canned. From that point on, the TWA owners, which btw were for the most part all creditors, had come to the conclusion that TWA was a lemon. They installed Gitner, who's sole purpose was to sell the airline to the highest bidder. They squeezed the remaining juice out of the airline and by 2000, they were ready to throw the peel away.
 
User avatar
SEPilot
Posts: 5019
Joined: Sat Dec 30, 2006 10:21 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 8:35 pm

Quoting 802flyguy (Reply 14):
Quoting PHX Flyer (Reply 5):
After all these years, I think it's time to mellow out a bit with regard to Icahn. The man isn't a monster, he is actually a great philanthropist, and he was also very proud of his ownership of TWA..

Seriously? I suppose that you probably think Lorenzo wasn't such a bad fellow after all, either. Icahn's Karabu deal did far more damage to TWA than those greedy unions...

I have learned that no matter how villainous a person is portrayed, they almost all are justified in their actions in their own eyes. And just as no man is totally good (except for Jesus Christ), no man is totally evil. We like to have villains, and we like to blame all bad things on them. But reality is seldom that simple. Everybody wants to make money, and we tend to demonize those that place too high a priority on it, especially when we perceive that they are too indifferent to those that may be hurt by their actions. But it is all a matter of degree, and we cannot see into the soul of another person. Lorenzo and Icahn have been widely vilified, and from what I know they deserve some of it, but I do not doubt that they had their good points as well. But most people are not interested in hearing about them. But I totally reject that they were completely responsible for the demise of the airlines under their control. All three of them were in trouble to begin with, and would likely have failed under any but the most brilliant leadership. And Continental did survive Lorenzo.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
shuttle9juliet
Posts: 322
Joined: Sat Jul 31, 2010 3:12 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 9:50 pm

Quoting CF-CPI (Reply 4):
Quoting SEPilot (Reply 11):

I flew my first 767 in to T7 in 1994 and was in awe of 2 TWA 747 100s and L10.11s and EI-CAL 767 parked up.
Amazing site.
Flew "Sir simon Rattle" to GLA and BHX on 15th July 96 two days before that horrible night.
I guess at JFK now i treat JetBlue as TWA now?
 
PHX Flyer
Posts: 541
Joined: Tue Apr 17, 2001 9:52 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 9:54 pm

Quoting 802flyguy (Reply 14):
I suppose that you probably think Lorenzo wasn't such a bad fellow after all, either.

I would advise against such assumptions. I haven't said a word about Lorenzo. Go to http://www.philanthropicpeople.com . You'll find that Carl Icahn finances three charitable foundations and gave $200 million dollars last year alone to Mount Sinai Medical School. To put this in perspective that's twice the money the State of Arizona appropriated for the U of A Health Science Center in 2013. In contrast, Francisco Lorenzo is not even listed on that site.
 
shuttle9juliet
Posts: 322
Joined: Sat Jul 31, 2010 3:12 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 9:56 pm

Sorry missing the point, I think TWA , if Flt 800 had not happened then yes maybe, but you had the whole 911 debacle which could well have crippled them, and others.
Also think they would have shrunk to a domestic only carrier and got their fleet of Airbus shorthaul if they got past 911.
I am sure if they made it that far they would have been acquired by U.S Airways or America West or the likes
Who knows?
 
BHMNONREV
Posts: 1209
Joined: Thu Aug 28, 2003 9:17 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sat Mar 08, 2014 10:37 pm

Quoting PHX Flyer (Reply 5):
It was not Icahn, who destroyed TWA, It was the Trans World Corporation first, and then the unions, who failed to adapt to the challenges that came with deregulation.

This. TWA was spiralling out of control for years well before Icahn hit the scene, they were on life support then. Carl just happened to be the one to pull the plug.

Quoting commavia (Reply 13):
If I remember correctly - and incredibly, while it seems like yesterday it was over 13 years ago - at the time of the AA acquisition, I believe it was said that at that point TWA was down to only a few weeks worth of cash remaining. And as we all know, the world only got far more challenging after January 2001 when the takeover occurred.

According to my late father who was ex-TW/AA for 37+ years, they were days away from ceasing operations. AA came in and kept it afloat a bit longer..
 
Pyrex
Posts: 4081
Joined: Thu Aug 25, 2005 7:24 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sun Mar 09, 2014 12:18 am

Quoting PHX Flyer (Reply 18):

To be fair, Carl Icahn is way, way richer than Frank Lorenzo, and just because someone doesn't make a spectacle out of their charitable giving does not mean they don't do any...
Read this very carefully, I shall write this only once!
 
jfk777
Posts: 5954
Joined: Tue Aug 22, 2006 7:23 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sun Mar 09, 2014 12:23 am

For all the " hell " Icahn is blamed for, the other bidder was called by Eastern unions as the " pilager of the american dream", Frank Lorenzo. In 1984 when Icahn purchased TWA, Texas Air was the competing offer. Eastern was destroyed by Lorenzo, so TWA probably would have been the same. Just some history for thought. Now if AA had purchased Pan AM in 1988 would United have purchased TWA.
 
User avatar
BN727227Ultra
Posts: 284
Joined: Fri Jan 10, 2014 7:15 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sun Mar 09, 2014 1:23 am

Well, safe to say that TW would have gone BK again, for starters.

Then, if EA and BN couldn't survive, it's even money at best that TW could have avoided liquidation--and EA and BN had better hubs.
 
TW870
Posts: 527
Joined: Fri Jan 25, 2013 2:01 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sun Mar 09, 2014 5:56 am

Yes and no.

Most importantly, TWA was very, very slow at building a strategy to respond to deregulation. TWA had great assets, and could have built a domestic network to feed its treaty-protected international rights. But it would have to have built a strong midwestern hub - and I explicitly mean it would have to have built an ORD hub - to really make those assets work. Remember, ORD was TW's biggest station in 1975. STL and PIT were brutally hit by the industrial crisis of the late 1970s, and would not have worked as core domestic hubs. It would have been difficult, but TW would have had to have taken on AA at ORD in a post deregulation context to truly be a long-term success story.

With that being said, Icahn took an airline with immense strategic challenge and pillaged it. In the late 1980s the company way paying $400 million a year in interest on the junk bonds from the 1985 LBO and the 1988 privatization - and that is before the added revenue drain of Karabu. The 1990s were immensely robust economic years, and TWA may have been able to leverage its remaining assets (i.e. those before Icahn sold away the LHR operation) to improve its competitive position vis-a-vis the other majors. But Icahn actively prevented that from happening.
 
F9Animal
Posts: 3681
Joined: Thu Dec 16, 2004 7:13 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sun Mar 09, 2014 6:11 am

Carl Icahn killed TWA. He was getting 40% off TWA tickets, and lowestfare.com was getting a commission on top of that! The Karabu contract made it impossible for TWA to make money, or invest in service. Had TWA not been dealing with Karabu, they would have been much more financially healthy. The airline found a way to survive as long as it did while Icahn got filthy rich. Trust me, TWA would have been very profitable.
I Am A Different Animal!!
 
seatback
Posts: 537
Joined: Thu Mar 28, 2002 3:00 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sun Mar 09, 2014 4:46 pm

Quoting SEPilot (Reply 11):
TWA would definitely be long gone by now regardless of Icahn. It was not strong enough, and would not have survived the post-9/11 slump. If AA had not swallowed it some other carrier would have. And I would not be surprised if Icahn in fact did not prolong its life, rather than shorten it.

Lack of vision is really what killed TWA. What made the legacies (AA, UA, NW, DL, CO, US) successful is that they saw potential markets where they could be the dominant player and built much of their network around. For instance, DL focused on ATL, while AA had DFW, MIA and UA had DEN, SFO, and ORD; CO had IAH and EWR and NW had MSP and DTW. The power of those cities/hubs served as a strong foundation for these airline's entire network. They also had killer marketing teams building strong loyalty programs.

Pan Am suffered from the same lack of strategy. Buying National was a useless attempt to gain a domestic network.

Building your network around STL, plus playing second or third fiddle at JFK wasn't a sustainable strategy. In hindsight, in the 70's and early 80's, TWA should have attacked a major market like Chicago (where it once was no. 2)
 
masseybrown
Posts: 4488
Joined: Wed Dec 11, 2002 2:40 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sun Mar 09, 2014 5:29 pm

Quoting PHX Flyer (Reply 15):
Karabu was not what brought TWA down.

Karabu killed their business in NYC and the company could not support its overhead on a one-hub (STL) operation without drastic surgery - which the management could never quite bring itself to try. Of course there were other factors, but Icahn administered the fatal cut.
 
PHX Flyer
Posts: 541
Joined: Tue Apr 17, 2001 9:52 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sun Mar 09, 2014 6:17 pm

Quoting MasseyBrown (Reply 27):
Karabu killed their business in NYC and the company

Never let the truth stand in the way of a strong conviction ...
 
masseybrown
Posts: 4488
Joined: Wed Dec 11, 2002 2:40 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sun Mar 09, 2014 6:55 pm

This is a good summary of the Karabu arrangement. It demonstrably killed TWA's NYC profits.

For Those Who Ask, "What Is Karabu?" And TWA (by Acvitale Jun 12 2000 in Civil Aviation)

Karabu would have ended in 2003; TWA never made it that far.
 
PHX Flyer
Posts: 541
Joined: Tue Apr 17, 2001 9:52 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sun Mar 09, 2014 7:19 pm

Quoting MasseyBrown (Reply 29):
It demonstrably killed TWA's NYC profits.

I am well familiar with the Karabu agreement. For one, it served to protect - to some exent - the pensions of many TWA employees. Secondly, TWA would have had ways to circumvent th agreement, for instance with codeshares. However, TWA was the last of the major airlines to introduce regional jets. Why was that? I know the answer and alluded to it in one of my earlier posts. Secondly, TWA could have done a lot better marketing its flights in Europe, where Karabu/Lowestfare.com had no reach. Thirdly, TWA on routes adversely affected by Karabu, TWA could have opted to offer full-fare tickets only and ccould have embraced Karabu as a major outlet for discounted tickets.
 
questions
Posts: 1165
Joined: Thu Sep 15, 2011 4:51 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sun Mar 09, 2014 7:30 pm

Quoting seatback (Reply 26):
Building your network around STL, plus playing second or third fiddle at JFK wasn't a sustainable strategy.

While I understand STL is not a major business market, geographically it seems to be a good location to funnel east/west connecting traffic. Is it not? Why could it not work along with a strong east coast and west coast operation?
 
brilondon
Posts: 3021
Joined: Sun Aug 21, 2005 6:56 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sun Mar 09, 2014 7:56 pm

Quoting Polot (Reply 7):
Its also important to recognize that Ichan gain control because TWA was in such terrible financial straits. He didn't take a hugely profitable airline and run it into the ground, although he did significantly gimp the airline for the future.

One man could not have such an impact on the fortunes of such a large airline. The way it was handled could have been better but TWA like PA was a dinosaur and needed to be radically changed. Unfortunately, they were in such debt they would not have had the resources to be able to turn themselves around without Ichan's financial resources and even then could not do it. They were ripe for a takeover in their financial situation. It it had not been AA it could have been CO, DL, NW, or any other airline that wanted to take their debt load on.
Rush for ever; Yankees all the way!!
 
seatback
Posts: 537
Joined: Thu Mar 28, 2002 3:00 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sun Mar 09, 2014 9:25 pm

Quoting questions (Reply 31):
While I understand STL is not a major business market, geographically it seems to be a good location to funnel east/west connecting traffic. Is it not?



Actually, STL is a nice sized business market (like CVG), but it isn't big enough. It's in the perfect geographic spot for a hub for N/W/S/E traffic flows for much of the nation. However, STL, just like MEM, and MCI didn't have the O&D to support a massive hub. In today's economics, point to point is much more profitable than flying from A to C through B.

History could have played out much differently. There was a time when AA was very strong, if not no. 1 in STL and TWA was very strong in Chicago. Fortunately, with the weakening of Braniff in Dallas, AA saw a chance to pounce. That turned out to be an excellent strategic move.
 
SpaceshipDC10
Posts: 4505
Joined: Tue Jan 01, 2013 11:44 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Sun Mar 09, 2014 11:12 pm

Quoting seatback (Reply 26):
Pan Am suffered from the same lack of strategy. Buying National was a useless attempt to gain a domestic network.

It doesn't excuse them, but they were desperate. Both Pan Am and TWA were from another world, real dinosaurs. In a way they were like the Penn Central, although they managed to survive longer after deregulation. Braniff and its all out "war" was quite their opposite and nonetheless went bust, much earlier.
 
ltbewr
Posts: 12495
Joined: Thu Jan 29, 2004 1:24 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Mon Mar 10, 2014 3:10 am

Probably not. There was no way they could have survived the cutthroat pricing by new, non-union airlines with more efficient a/c, with not only USA domestic flights, but international deregulation with new carriers in competition. The big problem with Ichan and his fellow 'investors' was to steal the cash, kill the unions, kill pensions - especially via Bankruptcy and make money reselling their stock before things fell apart. Like other airlines of the 1980's and 1990's, they were seriously hurt by terrorism and it's costs, declining quality of service, massive debt from the deals by Ichan and the like. Ichan had no desire to run airlines like TWA, only to use it and even kill it to make money.
 
Ldriver
Posts: 64
Joined: Tue Nov 15, 2011 8:45 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Mon Mar 10, 2014 3:42 am

I would speculate the only way TWA could have survived would be only as a brand name, had they been bought by, say, an airline like Northwest. In that case, wouldn't it make sense to keep the name TWA over a fairly weaker sounding name? On the other hand the name TWA was associated with weakness, and of course F800, and terrorism. Maybe no airline would have wanted that name back then??
 
WA707atMSP
Posts: 1508
Joined: Sun Oct 08, 2006 8:16 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Mon Mar 10, 2014 2:54 pm

Quoting TW870 (Reply 24):
It would have been difficult, but TW would have had to have taken on AA at ORD in a post deregulation context to truly be a long-term success story.

Even before deregulation, TWA was already being squeezed out of ORD by UA and AA. In 1977, TWA switched from 4x day L-1011s on ORD-LAX to 2x day 707 "Super Coach" flights - effectively ceding the market to UA, AA, and CO.

One factor which doomed TWA was the airline's decision in the 1970s to use money that could have been spent to renew the airline's fleet instead to buy non-airline companies like Canteen food service, Dunhill personnel services, Spartan Restaurants, and Century 21 realty.

The management decision was good on paper, because profits from these companies were supposed to offset the airline's losses in a recession, but it resulted in TWA having an outdated fleet - as others have said, TWA passed up a chance to buy used 727s from Braniff and white tail L-1011-500s to phase out their 707s faster, because the cash was spent on buying Century 21, Spartan Restaurants, etc instead.
 
milesrich
Posts: 1508
Joined: Sun Jul 06, 2003 2:46 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Tue Mar 11, 2014 2:01 am

Quoting MasseyBrown (Reply 12):
Could they have survived? I don't think we can say more than 'maybe'.

I always faulted TWA management for not finding some way to get out of Icahn's clutches. AA did it. Why couldn't TWA have reorganized itself similarly on their own years prior to the merger? The NW leveraged buy-out comes to mind. Admittedly the debt incurred in that buy-out hamstrung NW for years, but they made it. I think a more inventive, risk-taking TWA could have found a way, too.
Quoting commavia (Reply 13):
If I remember correctly - and incredibly, while it seems like yesterday it was over 13 years ago - at the time of the AA acquisition, I believe it was said that at that point TWA was down to only a few weeks worth of cash remaining. And as we all know, the world only got far more challenging after January 2001 when the takeover occurred.

TWA was a weak airline at the beginning of Deregulation. They had good years after Hughes under Tillinghaust but after that were always a weak link. They went through TWO Chapter 11's before the last one which was filed to allow AA to acquire the assets without the liabilities.

By the time they acquired Ozark, they were no longer Hollywood's Airline. Their service became substandard when compared to UA, AA and DL. Do you remember when they used prisoners as reservation agents?

The idea the airline could have survived is pure fantasy. Icahn saved them once, so if he hadn't come in, the airline would have gone the way of Braniff and Eastern a decade or more before.
 
ckfred
Posts: 4762
Joined: Wed Apr 25, 2001 12:50 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Tue Mar 11, 2014 3:47 pm

I remember reading somewhere that senior managers tried to convince Icahn to replace various airplanes (older 747s, L-1011s, 727s, and DC-9s) with newer airplanes in the mid 80s. AA had gotten the attractive lease agreement for its initial MD-80s. Other airlines were buying 737-300s to replace older 727s. The 757 was becoming popular, because of its abiliity to carry a lot of passengers while operating out of airports with shorter runways.

But, Icahn coulnd't get past the prices of aircraft. Even after explaining various issues, such as lower fuel costs, eliminating F/Os, reduced maintenance costs, and smaller aircraft (meaning fewer seats and higher prices), Icahn wouldn't budge.

By the same token, Icahn never wanted TWA. He made the bid for TWA with the assumption that a white knight would come in, presumably another air carrier, and make a higher offer. Icahn would deem the offer better and more than he was willing to pay and drop out of the bidding.

No white knight ever came forward, leaving Icahn stuck with buying TWA. He had never been involved in any sort of corporate operations, so being CEO of an airline was something entirely new to him.

Someone mentioned Trans World Corp. Did Trans World Corp. have a hand in the eventual decline and fall of TWA? Yes. But let's remember that in the 1970s, the trend for large businesses was to own multiple companies that had different economic cycles. So, if one business went through a down period, another would be doing well.

That trend lasted through the 1980s. Then, the trend was for companies to sell "non-core" businesses.

If you look at some of the large U.S. airlines, as well as a number of European and Asian carriers, they all used to have hotel busiensses. AA had Americana. UA had Western International (now Westin). PA had Inter-Continental. TWA owned Hilton International. I believe that BA, LH, Swissair, SAS, and JAL all owned hotel chains.
 
SpaceshipDC10
Posts: 4505
Joined: Tue Jan 01, 2013 11:44 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Tue Mar 11, 2014 10:50 pm

Quoting ckfred (Reply 39):
AA had gotten the attractive lease agreement for its initial MD-80s.

TW got a fleet of 20 MD-80s between 1983 and 1985. However I don't know the kind of lease agreement they had for those. Then, in 1986, they got four more through the acquisition of Ozark. That wasn't enough for a fleet renewal, but still a first step.
 
sfotraveler
Posts: 57
Joined: Wed Nov 02, 2005 10:45 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Wed Mar 12, 2014 9:35 pm

I think the answer is if the airline had sound and aggressive management it would still be around. In the mid-80s the airline had its problems but it was profitable. It had a robust European network and was the no. 1 carrier over the Atlantic. It still had a strong presence in the Transcon market, and St. Louis was a reasonably viable mid-continent hub. A lot of the industry consolidation had yet to occur and maybe if TWA been able to merge with one or more sound regional carriers such as Piedmont or Western it could have developed a better domestic network. Look at what a strong carrier Continental became - at the time it was a failing airline that was folded together with Texas Air and People Express.
 
questions
Posts: 1165
Joined: Thu Sep 15, 2011 4:51 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Thu Mar 13, 2014 4:40 am

Which airline was known for better inflight service, TWA or Pan Am?
 
ThePinnacleKid
Posts: 497
Joined: Wed Feb 23, 2005 9:47 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Fri Mar 14, 2014 12:22 am

You know the best part of this whole sad sad story? A TWA livery plane will soon enough be gracing the skies at the newAmerican.... I'm so glad they're keeping the heritage paints and the heritage American carriers are coming back to life... to see an Airbus in TWA colors flying finally will be that last segment of a circle finally being completed.
"Sonny, did we land? or were we shot down?"
 
User avatar
BN727227Ultra
Posts: 284
Joined: Fri Jan 10, 2014 7:15 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Fri Mar 14, 2014 12:45 am

Quoting ThePinnacleKid (Reply 43):
You know the best part of this whole sad sad story? A TWA livery plane will soon enough be gracing the skies at the newAmerican....

I won't be happy until I see Ozark...(three swallows will get you there!)
 
User avatar
MD80
Posts: 644
Joined: Sun Feb 16, 2014 3:29 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Fri Mar 14, 2014 2:52 am

Quoting ckfred (Reply 39):
...that senior managers tried to convince Icahn to replace various airplanes (older 747s, L-1011s, 727s, and DC-9s) with newer airplanes in the mid 80s.

Interesting! This makes me wonder because the majority of airlines in the USA and Europe retained the mentioned aircraft throughout the 1980s and into the 1990s. Some even opted for a dual strategy of operating new aircraft while retaining older types. IIRC TWA had no intention to use their first 15 MD-82s to replace other aircraft on a 1-for-1-basis after they signed an agreement in October 1982 with McDonnell Douglas. Please correct me if I am wrong.

Regards
Dedicated for the MD-80, MD-90, MD-95 ehhh...Boeing 717, and DC-9: http://www.MD-80.com
 
milesrich
Posts: 1508
Joined: Sun Jul 06, 2003 2:46 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Fri Mar 14, 2014 6:39 pm

Quoting MD80 (Reply 45):

Quoting ckfred (Reply 39):
...that senior managers tried to convince Icahn to replace various airplanes (older 747s, L-1011s, 727s, and DC-9s) with newer airplanes in the mid 80s.

Interesting! This makes me wonder because the majority of airlines in the USA and Europe retained the mentioned aircraft throughout the 1980s and into the 1990s. Some even opted for a dual strategy of operating new aircraft while retaining older types. IIRC TWA had no intention to use their first 15 MD-82s to replace other aircraft on a 1-for-1-basis after they signed an agreement in October 1982 with McDonnell Douglas. Please correct me if I am wrong.

Regards

TWA was retiring their last 707s at the time the MD-80's were delivered. McDD was having trouble selling MD-82's, and therefore, entered into a very attractive lease agreement with both American and TWA. I don't remember the details with TWA, but American was given the option of returning the aircraft at no penalty if they didn't meet their performance guarantees, or they were unneeded. Instead, AA went on to buy 300+ airframes. The largest single fleet of any airline up to that time.

Quoting ckfred (Reply 39):

I remember reading somewhere that senior managers tried to convince Icahn to replace various airplanes (older 747s, L-1011s, 727s, and DC-9s) with newer airplanes in the mid 80s. AA had gotten the attractive lease agreement for its initial MD-80s. Other airlines were buying 737-300s to replace older 727s. The 757 was becoming popular, because of its abiliity to carry a lot of passengers while operating out of airports with shorter runways.

This must have been after the OZ merger because TW got rid of their original DC-9's long before the Ozark Merger and long before Icahn.

I think this subject has been beat over the head so to speak, but TWA had numerous problems going back to deregulation. 1) They were #3 at ORD, one of their biggest stations. 2) When they decided to move to STL, they picked an airport that they had dominated but was inferior to ORD, with limited two way operations, etc. 3) Their old fleet. 4) The sale of the LHR routes began the beginning of the end of their JFK transatlantic hub.

But look, they lasted a lot longer than Pan Am did.
 
User avatar
MD80
Posts: 644
Joined: Sun Feb 16, 2014 3:29 pm

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Tue Mar 18, 2014 10:25 pm

Quoting milesrich (Reply 46):
the MD-80's were delivered. McDD was having trouble selling MD-82's, and therefore, entered into a very attractive lease agreement with both American and TWA. I don't remember the details with TWA, but American was given the option of returning the aircraft at no penalty if they didn't meet their performance guarantees, or they were unneeded. Instead, AA went on to buy 300+ airframes. The largest single fleet of any airline up to that time.

These „fly-before-buy-deals“ were IMO an interesting tool to stimulate sales of the MD-80 after most of the initial deliveries were fulfilled. Most deliveries to initial operators Swissair, Austrian Airlines, Toa Domestic Airlines, Austral, PSA and Hawaiian (and some smaller companies) were accomplished and some sources say that only seven remaining firm orders were left before McDonnell Douglas struck a deal with American Airlines. The details of the deal with American Airlines for the first 20 aircraft were never made official. The agreement for 13 additional MD-82s were believed to be similar to the original one but the huge order for 67 MD-80s + 100 options in March 1984 was a new agreement with different details. The deal for the first 20 aeroplanes for American Airlines was a very attractive way for the company to get aircraft at very low financial risk with a cancellation fee of less than 2 million US $ with a notification within 30 days for each aircraft. In the end American Airlines took delivery of 260 MD-80s.

The deal between TWA and McDonnell Douglas for 15 MD-82s was believed to be very similar to the first deal with American Airlines. IIRC TWA were close to decide in favor of the Boeing 737-300 but McDonnell Douglas were able to arrange a package which included very attractive leasing conditions and according to TWA a “very innovative solution… for a new and more fuel-efficient aircraft”. The “superior economics, passenger capacity (F12Y130) and range” were also mentioned. The first two MD-80s were delivered on April 1983 with the last of the original fifteen aircraft in March 1984. TWA were the 18th customer for the MD-80 and in a group of airlines who ordered this type within the last six months in 1982. Other (very important) commitments came from Alitalia and from Finnair. Both airlines evaluated alternative types of aircraft before selecting the MD-80    .

As we all know, TWA leased additional MD-80s throughout the 1980s and 1990s and became the last airline to order new MD-80s when they signed an agreement in April 1998 to take 24 additional MD-83s. The entire MD-80-fleet consisted of 103 aircraft until the airline was absorbed into American Airlines and ranked as the third-biggest operator of this type after American Airlines and Delta Air Lines.

Regards
Dedicated for the MD-80, MD-90, MD-95 ehhh...Boeing 717, and DC-9: http://www.MD-80.com
 
jetwet1
Posts: 1827
Joined: Thu Jun 14, 2007 4:42 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Tue Mar 18, 2014 11:04 pm

Back to the original question, "Would TWA Still Exist If It Hadn't Been For Ichan?"

Probably not, Ichan was the white night for TWA, nobody wanted Lorenzo to get the company. TWA had been in trouble for decades at that point, as some have mentioned it was Hughes that set them on the path to failure and only at the very end were they starting to right the ship.

Without Ichan, Lorenzo would have gutted TWA, probably sending every profitable part over to CO.

In much the same way as PA, deregulation hurt TWA, though they were better positioned than PA when it happened.

In hindsight, they needed ORD more than anything, with deregulation coming they should have thrown everything into making ORD work, a short term loss for a long term gain.

I had the privileged of spending a lot of time on TWA planes, heading to London either through JFK or STL, even to the end the service was great and out of TWA and PA, I miss TWA the most.

As a disclaimer, I worked for Ichan for 10 years, I probably know the man better than anyone else on here, though most of the meetings we were both in involved budgets for the company I worked for (not TWA) we did get to talk every now and again about different things, an interesting man for sure.

There were a couple of things I would note.

He thought running an airline would be like running any other business, but (my opinion) his ego got in the way and he wouldn't bring in airline people to take his spot.

He was desperate to get his "money out", he looked at TWA as a bad investment and was trying to cover his purchase.

As time went on I think he realized how badly he had messed things up, in the late 90's he was all about lowestfare.com and how much he was making from it and the caribou agreement, the last chance we had to talk about this was in late 2007, I think by then, being an older man and wiser, he realized that he had had a hand in killing TWA, if he had taken a lower percentage of the seats they could have made it, but he didn't.

I am in no way trying to pardon Ichan for his actions, if you look at the deals he made after TWA you will see that he held onto a lot of companies for a long time, investing a great deal of time and money into them, yes the majority of them he sold, for a profit, but that's what corporate America is all about.
 
SpaceshipDC10
Posts: 4505
Joined: Tue Jan 01, 2013 11:44 am

RE: Would TWA Still Exist If It Hadn't Been For Ichan?

Tue Mar 18, 2014 11:23 pm

Quoting jetwet1 (Reply 48):
even to the end the service was great and out of TWA and PA, I miss TWA the most.

I have indeed read and heard that service wise, TWA was better than PA. I believe if Pan Am is most remembered for it's because of its audacity during the flying boats era, the launch of the 707 and later the 747.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos