Matt D
Topic Author
Posts: 8907
Joined: Fri Nov 19, 1999 6:00 am

If TWA Goes Under

Sat Nov 11, 2000 2:47 am

I'm sure that TWA is a good airline from a morale and service standpoint, so please spare me the heated retorts if you love TWA more than life itself. I'm looking at it from a purley mathematical and financial standpoint.
TWA's future isn't looking too bright (duh we've know that for years).
Their stock prices are barely above junk bond levels. Indeed I saw a report (probably in the LA Times) that stated that the full sticker price of one brand new 747-400 is more than the entire worth of TWA when you factor in their debt. Of course we all know how accurate the press is when reporting on airline matters. So I could be totally off the mark.
So assuming that they don't make a Continental style comeback (and I don't think they will. If they were going to, they should've already, and with the economy slowing down....well it doesn't look good) and if they don't get bought out...that means that their STL hub will suddenly open up. And there will be a lot of new and newer planes up for sale for pennies on the dollar (I love liquidation sales).
Who do you think will swoop in to fill the void and snap up the planes should the rug be pulled from them?
Southwest? United? American? AirTran? jetBlue?
 
Guest

RE: If TWA Goes Under

Sat Nov 11, 2000 3:34 am

Airtran would love to get those 717's in Atlanta asap
 
mls515
Posts: 2954
Joined: Mon Jun 26, 2000 5:56 am

RE: If TWA Goes Under

Sat Nov 11, 2000 4:15 am

I can't see WN taking any of TWA's planes since there are no 737s. But some of their operations sure.
 
acvitale
Posts: 1911
Joined: Sat Aug 18, 2001 8:25 am

RE: If TWA Goes Under

Sat Nov 11, 2000 4:18 am

While your statement might make a degree of sense you are missing some of the bigger changes taking place.

TWA costs (fuel excluded) dropped again last quarter.
TWA Revenue increased again last quarter
TWA Yields increased
TWA Load factor increased

ST Louis has a ticket buying program that was used before if cash gets critically tight to boost the coffers.

TWA owns 1/4 of Worldspan in a stake worth between 500 million and 1 billion dollars.

TWA has enough cash to make it thru the winter and has gone into the winter in the past with less money when they were more seasonally affected with a fleet of L10s, and 747s flying to Europe.

TWA now has boosted to firmly take #2 role in the Caribbean the largest winter market making it far more likely to turn a profit then in past years. (At worst case minimizes losses)

TWA is using more and more guaranteed revenue flights The costs of operations are guaranteed and so is the profit. Almost 1/2 of the caribbean flights are now operating with some form of guaranteed revenue as are some of the Hawaii flights.

Low yield stations like Palm Beach, Milan, Sarasota, Madrid, Rome, Barcelona, Lisbon, and others were cut. RJs replaced mainline aircraft in SHV, CVG and other stations offering more frequencies and higher yields and allowing mainline aircraft to be re-assigned to new routes.

The 727s have been retired reducing costs drastically!

TWA is closer to getting out of Karabu in September of 2003.

Al
 
acvitale
Posts: 1911
Joined: Sat Aug 18, 2001 8:25 am

RE: If TWA Goes Under

Sat Nov 11, 2000 4:19 am

While your statement might make a degree of sense you are missing some of the bigger changes taking place.

TWA costs (fuel excluded) dropped again last quarter.
TWA Revenue increased again last quarter
TWA Yields increased
TWA Load factor increased

ST Louis has a ticket buying program that was used before if cash gets critically tight to boost the coffers.

TWA owns 1/4 of Worldspan in a stake worth between 500 million and 1 billion dollars.

TWA has enough cash to make it thru the winter and has gone into the winter in the past with less money when they were more seasonally affected with a fleet of L10s, and 747s flying to Europe.

TWA now has boosted to firmly take #2 role in the Caribbean the largest winter market making it far more likely to turn a profit then in past years. (At worst case minimizes losses)

TWA is using more and more guaranteed revenue flights The costs of operations are guaranteed and so is the profit. Almost 1/2 of the caribbean flights are now operating with some form of guaranteed revenue as are some of the Hawaii flights.

Low yield stations like Palm Beach, Milan, Sarasota, Madrid, Rome, Barcelona, Lisbon, and others were cut. RJs replaced mainline aircraft in SHV, CVG and other stations offering more frequencies and higher yields and allowing mainline aircraft to be re-assigned to new routes.

The 727s have been retired reducing costs drastically!

TWA is closer to getting out of Karabu in September of 2003.

Al
 
me
Posts: 220
Joined: Sat Oct 21, 2000 4:57 am

RE: If TWA Goes Under

Sat Nov 11, 2000 4:26 am

More than the 717's, AirTran would love to get the 717 sim that's in St Louis. Long Beach, Ca and St Louis are the only two 717 sim locations. Our pilots currently use both locations until the third is built here in Atlanta.
 
acvitale
Posts: 1911
Joined: Sat Aug 18, 2001 8:25 am

RE: If TWA Goes Under

Sat Nov 11, 2000 4:39 am

More direct and to the point. No single carrier would replace TWA in STL. The simulator in STL for the 717 would not be sold to Air Tran. They do not even have the money for the bond payment much less a 717 simulator.

The planes would for the most part go back to the leasors and the banks that financed them. Again no single carrier would likely get them all...

But, Seriously, Once again short sighted. I think you will see TWA around for a long term in one form or another. Look for a big announcement on TWA on next Wednesday! TWA will definately be here to stay!

Al
 
ContinentalEWR
Posts: 3619
Joined: Wed May 24, 2000 2:50 am

RE: If TWA Goes Under

Sat Nov 11, 2000 4:52 am

Unless someone buys TWA and pumps money into it soon (and I assume that is what you are alluding to, ACVITALE) then TWA won't be around to stay. The
airline has no alliance partners, no profits, and is perenially struggling to re-
make itself, so far with limited success.

Should the United/US Airways merger fail to win approval (and it might), then
US Airways would be an ideal merger partner for TWA. It would help TWA to
rebuild its Atlantic presence and give US Airways a stronger Midwest and West
route network that it so very badly needs.

Another ideal merger partner for TWA would be America West, which has a
very strong West Coast presence and could learn a thing or two from TWA
about customer service.

TWA has lost money for the last 10-12 years. The economy is slowing down
somewhat and demand for airline seats might cool off. TWA has missed the
profits boat and it is running out of time. I would much rather see TWA be
folded into a larger carrier than go the way of Eastern, Pan Am, and others
like Braniff undeservedly.

ContinentalEWR
 
acvitale
Posts: 1911
Joined: Sat Aug 18, 2001 8:25 am

RE: If TWA Goes Under

Sat Nov 11, 2000 5:49 am

Co EWR,

What many of you miss is the paper losses....

TWA actually banked money in Q2 this year but wrote it off as a loss. (NOLs ) and banked money in 95-96 but showed it at losses. The difference was the use of NOLs that allowed them to pay taxes in the form of NOLs rather then cash. Additionally, writing down assets (like the European routes and slots) shows as a loss even if they are actually not losing any money. Needless to say if it were all cash the carrier would have disappeared long ago. TWA is here to stay and they are going to be fine. Keep the faith and check the infoline if you have access.

Al
 
SegmentKing
Posts: 3224
Joined: Sun Aug 27, 2000 7:16 am

RE: If TWA Goes Under

Sat Nov 11, 2000 6:01 am

With the Airbus order, I can see JetBlue coming into the picture, as well as some well backed airlines and start ups filling the void. The STL hub is too close to Memphis for Northwest to consider it. St. Louis MAY be a good match for United or American, as it could be used as a backup to O'Hare when things go haywire up there. I don't think Delta would touch it... Continental is a little iffy.. and USAirways doesn't have the resources to take on such a prospect of St. Louis right now.

I on the other hand, am leary of the financial attitudes of TWA. From a purely financial point of view, it's nothing for the cheerleaders on this board and others to brag about. TWA is still fighting for it's existence... and while I am not going to call doom and gloom on the boiz at St. Louis, I just don't think they will be around longer than the Northwests, Deltas, and Continentals of the USA.

Nate
~ ~ ~ ~ pRoFeSsIoNaL hUrRiCaNe DoDgEr ~ ~ ~ ~
 
exusair
Posts: 658
Joined: Fri Sep 08, 2000 12:15 am

RE: If TWA Goes Under

Sat Nov 11, 2000 6:11 am

Us Airways has plans to take STL in the event of the demise of TWA. It would happen virtually overnight. US tried to make MCI work as a hub, as did EAL back in the 80's. AirTran would have nothing to do with TWA's planes. They can't even afford the 717's that they have, much less take in TWA's. Their fleet of 757's would probably go to NW, and their 767's converted into more freighters or obtained by either AA or DL. Nobody will merge or buy this airlines...the debt liabilities are just too levereged for even the deepest pockets to fill. TWA must ride out this storm or close it's doors. EAL declared bankruptcy with over $1 billion in the bank. One of the main reasons TWA is still around today is because of the faith and professionalism of TWA's employees .
 
Guest

RE: If TWA Goes Under

Sat Nov 11, 2000 7:08 am

so would those poor 717's go to the scrapyard  
 
TWFirst
Posts: 5752
Joined: Wed Apr 19, 2000 5:30 am

RE: If TWA Goes Under

Sat Nov 11, 2000 7:26 am

Acvitale:


What's your take on the Global offer?? I don't take it too seriously.


If the Teflon airline has made it this far, it will continue to be around a long time. It was in FAR, FAR worse shape several years ago and survived. It has a great product now, and is continuing to work on its cost structure, and strategically utilize its assets.
An unexamined life isn't worth living.

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