LGW
Topic Author
Posts: 4281
Joined: Thu Jun 01, 2000 6:07 pm

Why Did TWA Pull Out Of LHR In Favour Of Lgw?

Mon Mar 19, 2001 12:48 am

Why did TWA pull out of LHR for LGW?

Do you think in the long run, with heinz sight they did the right thing?

Kind Regards

LGW
 
deltairlines
Posts: 6877
Joined: Mon May 24, 1999 4:47 am

RE: Why Did TWA Pull Out Of LHR In Favour Of Lgw?

Mon Mar 19, 2001 12:57 am

TWA sold their rights to American in the early 90s when Ichan was ruining the airline and needed cash to run it.

Jeff
 
Philly Phlyer
Posts: 356
Joined: Sun May 23, 1999 12:05 pm

RE: Why Did TWA Pull Out Of LHR In Favour Of Lgw?

Mon Mar 19, 2001 1:14 am

TWA's rights to land at LHR were sold to either American or United (or both). This was part of the Carl Icahn legacy in which he raped the company. He sold off the most profitable bits of TWA to competitors to leave a carcus that could never support itself. In doing so, signed the company's death warrant. Then he only let the company out of his death grip by forcing them to accept his Karabu discount ticket arrangement in a shotgun wedding (or divorce in this case). This way he could make even more money while the company labored in its death throws. Under his great ownership and leadership in the 1980s, TWA managed to get smaller when every other American carrier was growing leaps and bounds.

This was the same thing that Frank Lorenzo did to Eastern (newly acquired as a part of Texas Air) when he transferred all of Eastern's best assets (reservation system, newest jets, etc.) to Continental (out of bankrupcy with much lower salaries and costs) and then charged Eastern outrageous fees to use the assets that had once been theirs. Lorenzo not only killed Eastern, but almost succeeded in killing Continental. It only has been saved by capable management in the last four years.

Both Icahn and Lorenzo should rot in hell for what they did to employees of these one time great airlines. At the very least, neither ever should allowed to have meaningful ownership in an airline once again.

If someone on the streets steals a car, takes it to a "chop shop," dismantles it and sells the pieces for more than the car as a whole is worth, it is considered a crime. When corporate raiders do it, it's refered to as increasing shareholder value. The corporate raider is no more intelligent or capable than a common car thief. The main difference is the size of the profits and skills of the lawyers. The ethics roughly are the same.

 
deltairlines
Posts: 6877
Joined: Mon May 24, 1999 4:47 am

RE: Why Did TWA Pull Out Of LHR In Favour Of Lgw?

Mon Mar 19, 2001 1:23 am

United got LHR rights from Pan Am. Delta got the rest of the transatlantic department, including the FRA hub. I do agree though that Icahn and Lorenzo have both made the airline world a worse place and the world would be better off without them.

Jeff
 
Philly Phlyer
Posts: 356
Joined: Sun May 23, 1999 12:05 pm

RE: Why Did TWA Pull Out Of LHR In Favour Of Lgw?

Mon Mar 19, 2001 1:38 am

Thanks DeltAirlines. I couldn't remember which was which (American or United) on the LHR authority sales.

As to the world being better off without Icahn and Lorenzo, that's being nice! I've had the unfortunate experience to have to meet with both men. In both instances, it was for clients that were doing business with them. In both instances, I wanted to wash my hands afterward. Both men were scummy, slippery and .... [I'll stop now before I go too far!]

 
ryanair
Posts: 646
Joined: Tue Jul 06, 1999 1:41 am

RE: Why Did TWA Pull Out Of LHR In Favour Of Lgw?

Mon Mar 19, 2001 4:40 am

It wasn't so much strategic, prior to the sale TW had flights from both airports, however as has been said Ichan sold the LHR operation and pocketed the money to cover his own personal financial problems (TW was effectively his private company at the time), the money was never plowed back into TWA.

For TW it was a disaster, the LHR routes fed passengers onto the domestic system (which remained, but with less pax so revenue) and with very similar fixed costs TW revenue dropped by about $1billion I believe (?).

I think TW used to fly the current USAirways routes from LGW too, but sold these in a similar manor to the LHR op.

Hope that helps.
 
ContinentalEWR
Posts: 3619
Joined: Wed May 24, 2000 2:50 am

RE: Why Did TWA Pull Out Of LHR In Favour Of Lgw?

Mon Mar 19, 2001 6:48 am

TWA didn't pull out of London Heathrow. In 1991, Carl Icahn sold the airline's routes from JFK, Boston, Chicago
and Los Angeles to Heathrow for $445 as the airline was
in Chapter 11. These were the crown jewel routes in
TWA's system. Carl Icahn destroyed TWA systematically and methodically through his disastrous
attempt to strip TWA of its core assets and sell them off piecemeal and then through Karabu. How dare he try to buy the airline again!

TWA also had routes to Gatwick from Philadelphia and
Baltimore as well as the St. Louis route. The PHL and
BWI routes were sold to US Air.

ContinentalEWR

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