Comment: A cloud over TWA's prospects

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A cloud over TWA's prospects

Jeffrey Erickson had a vision for Trans World Airlines. As its new chief executive, he dreamt of returning the airline to its former glory days. To that end he was in London last Wednesday evening lobbying MPs for TWA to be allowed to relaunch daily services from New York to Heathrow. A few hours later TWA Flight 600 exploded and crashed 20 miles off the coast of Long Island.

As he raced back to take charge of the airline's investigation into the disaster, uncomfortable memories must have loomed large of the fate that befell another American pioneer of the skies.

The bombing of PanAm flight 103 over Lockerbie in 1988 marked the beginning of the end for America's most famous flag-carrier. Lockberbie sapped what little consumer confidence PanAm still commanded. Within four years the airline that invented the transatlantic clipper service was gone, its international routes and hubs auctioned off to rivals and the rump of the business left to wither and die in bankruptcy protection.

TWA is not PanAm and we do not yet know whether Flight 800 was brought down by a bomb. Furthermore, the skids were already under PanAm long before the Lockerbie disaster due to its failure to react quickly enough to the deregulation of the US airline market. It was also the US flag- carrier without a home base.

By contrast TWA has big hub operations at St Louis and New York and ranks as the world's thirteenth largest airline, carrying 21 million passengers last year.

But there are also some startling similarities. TWA, like PanAm, has had a torrid time since the world airline industry went into recession at the end of the 1980s.

In 1991 TWA, then under the control of the US corporate raider Carl Icahn, and Pan-Am were both forced to sell off their routes from the US to Heathrow to survive.

TWA's were sold to American Airlines, PanAm's to United Airlines. But it did neither struggling carrier much good.

Within a year TWA was filing for Chapter 11 bankruptcy protection, as rising oil prices, the Gulf war and intense competition took their toll.

It survived and emerged from Chapter 11 a year later only to return to bankruptcy protection in 1995. It re-emerged following an employee buyout backed by a handful of Wall Street institutions but it remains saddled with debts of $1.5bn.

Since its founding in the late 1920s, TWA has been associated with some famous initiatives and famous names. It was the first to launch an innovative rail and air trip from New York to Los Angeles that slashed coas-to-coast travel time to 48 hours. In 1939 it was bought by the billionaire Howard Hughes who finally sold out in 1965, by which time TWA was among the world's top three carriers.

Today TWA is a shadow of its former self. It presently operates only one flight to Britain - from St Louis to Gatwick . But if Mr Erickson gets his way then TWA would become a big player on the transatlanic once again. Buoyed by climbing profits - up from $5.2m to $25.3m in the last three months - he also wants to replace many of the aircraft in TWA's 189-strong fleet, the oldest in the US. Wednesday night's disaster off the coast of Long Island may have put paid to that and much more besides.