Trans World Airlines

Trans World Airlines , commonly known as TWA, was an American airline that was acquired by American Airlines in April 2001. For many years it was headquartered at the Kansas City Downtown Airport, as well as midtown Manhattan in New York City. At the time of the buyout, it was headquartered in St. Louis, Missouri, and used the airport nearby, Lambert-Saint Louis International Airport, as its major hub.

TWA once shared the U.S. international air market with fellow pioneer Pan American World Airways.

Early history

The airline was founded on July 13, 1925, as Western Air Express. In 1930 it merged with Transcontinental Air Transport (T-A-T) to become Transcontinental and Western Air (T&WA).

Howard Hughes purchased T&WA in 1939, and the airline expanded dramatically under the leadership of Hughes and CEO Jack Frye. After breaking Pan American World Airways' legal designation as the United States' sole international carrier, T&WA began trans-Atlantic service in 1946 using new Lockheed Constellation aircraft, changing its name to The Trans World Airline. The airline's legal maneuvering also eliminated a possible competitive threat from American Overseas Airways, affiliated with American Airlines, relegating them to non-scheduled charter service only and eventually forcing them out of all European-U.S. service by 1950. As a result, TWA and Pan Am were the only U.S. airlines that served Europe until the 1970s.

TWA was also a major force in the foundation of Saudi Arabian Airlines, Ethiopian Airlines, and a newly revived Lufthansa after World War II. Airlines from around the world sent their pilots to TWA for training for many years. Another TWA first was the Breech Academy, the first dedicated training facility for stewardesses or air hostesses, as TWA referred to their flight attendants for many years.

In 1950, the airline again changed its name, this time to Trans World Airlines. It established routes from Europe to Asia during the 1950s and 1960s, flying its aircraft as far east as Hong Kong.

Explosive growth

In 1961, TWA became the first international all-jet airline, with their last piston-powered flight in the Lockheed 1649 Starliner from Rome to New York. That same year, TWA began showing the first inflight movies. Hughes' growing eccentricities also caused TWA to sue for his removal as chairman in 1961. Under new corporate management, the Trans World Corporation (TWA's holding company) expanded to purchase the overseas operations of Hilton Hotels.

TWA's landmark Terminal 5 at New York City's JFK Airport, designed by Eero Saarinen, is one of the world's most famous buildings: a lyrical expression of the unified sculptural forms that could be created in reinforced concrete, before the age of computer aided design. The TWA Flight Center, as it was once known, was completed in 1962.

In a major step that took many of their domestic competitors by surprise, on April 7, 1967, TWA became the world's first all-jet airline with the retirement of their last Lockheed 749 Constellation aircraft. That morning throughout the TWA system, aircraft ground service personnel placed a booklet on every passenger seat titled "Props Are For Boats."

By 1969, TWA had eclipsed Pan American World Airways' one time Atlantic dominance. And in the Transpacific Route Case of 1969, TWA was given authority to extend its route network across the Pacific Ocean to Hawaii, Japan, and Taiwan.

The airline continued to aggressively expand European operations throughout the 1960s, 1970s and 1980s. In 1987, TWA could boast of a trans-Atlantic system that stretched from Los Angeles to Bombay, including virtually every major European population center, with gateways from the United States in 10 major cities. TWA's zenith would occur in the summer of 1988, when, for the first and only time, the airline would carry more than 50 percent of all the trans-Atlantic passengers to fly across the ocean. Every day, Boeing 747, Lockheed L-1011, and Boeing 767 aircraft would depart to more than 30 cities in Europe, fed by a small but effective domestic operation focused on moving U.S. passengers to New York or other gateway cities for widebody service across the Atlantic, while a similar inter-European operation would shuttle non-U.S. passengers to TWA's European gateways for travel to the U.S. This glory would be short lived with entry into the trans-Atlantic market by additional U.S. carriers such as American Airlines, Delta Air Lines, and United Airlines, all hungry to expand and with the financing to back aggressive European expansion plans.

Financial difficulties

In two critical strategic blunders, TWA abandoned the trans-Pacific market and the dedicated air cargo market. Charles Tillinghast, the TWA CEO from 1961 to 1976, was oft quoted as saying, "There's no money in the Pacific and there's no money in cargo. We're gonna' shrink this airline 'til it's profitable."

Airline deregulation also hit TWA hard. TWA had badly neglected domestic U.S. expansion at a time when the newly deregulated domestic market was growing at an exponential rate. TWA's holding company, Trans World Corporation, spun off the airline. But the airline became starved for capital after having been spun off. The airline briefly considered selling itself to corporate raider Frank Lorenzo in the 1980s, but ended up selling to corporate raider Carl Icahn in 1985. Under his direction, many of its most profitable assets were sold to competitors, much to the detriment of TWA. Icahn was eventually ousted in 1993, though not before the airline was forced to file for bankruptcy in 1992. Icahn emerged unscathed.

The Karabu deal

When Carl Ichan left in 1993, he arranged to have TWA give Karabu Corp., an entity he controlled, the rights to buy TWA tickets at 45 percent off published fares through September 2003. This was named "The Karabu deal" ^*. The ticket program agreement, which began on June 14, 1995, excluded tickets for travel which originated or terminated in St. Louis, Missouri. Tickets were subject to TWA's normal seat assignment and boarding pass rules and regulations, were non-assignable to any other carrier and were non-endorsable. No commissions were paid to Karabu by TWA for tickets sold under the ticket program agreement.

By agreement dated August 14, 1995, Lowestfare.com LLC, a Karabu wholly owned operating subsidiary, was joined as a party to the ticket program agreement. Pursuant to the ticket program agreement, Lowestfare.com LLC could purchase an unlimited number of system tickets. System tickets are tickets for all applicable classes of service which were purchased by Karabu from TWA at a 45 percent discount from TWA's published fare. In addition to system tickets, Lowestfare.com LLC could also purchase domestic consolidator tickets, which are tickets issued at bulk fare rates and were limited to specified origin/destination city markets and did not permit the holder to modify or refund a purchased ticket. Karabu's purchase of domestic consolidator tickets was subject to a cap of $70 million per year based on the full retail price of the tickets.

Hence, on most TWA flights, Karabu could buy and then sell a sizable portion of the available seats, leaving TWA to pay for its operating cost with the revenue accrued through the sale of any remaining ticket sales. In other words, TWA was flying passengers who were not paying them, but someone else. This deal left the company powerless. If TWA wanted to increase revenue on busy routes by putting a large plane into service, Karabu could only claim more seats. It is estimated TWA was losing around $150 million a year in revenue with this deal.

Brief turnaround and subsequent sale

By 1998, TWA reorganized as a primarily domestic carrier, with routes centered around hubs at St. Louis and New York. Partly in response to TWA Flight 800 and the age of its fleet, TWA announced a major fleet renewal, ordering 125 new aircraft.

However, financial problems began to resurface shortly afterward, and TWA's airline assets were acquired by American Airlines in April of 2001 after declaring bankruptcy for a third time. Trans World Airlines flew its last flight on December 1, 2001. The ceremonial last flight was Flight 220 from Kansas City, Missouri, to St. Louis, with CEO Captain William Compton at the controls. However, the final flight before TWA officially became part of American Airlines was completed between St. Louis and Las Vegas, Nevada, also on December 1, 2001. At 10:00 p.m. CST on that date, employees began removing all TWA signs and placards from airports around the country, replacing them with American Airlines signs. At midnight, all TWA flights officially became listed as American Airlines flights. Some aircraft carried hybrid American/TWA livery during the transition, with American's tricolor stripe on the fuselage and TWA's name on the tail. One lighted TWA sign still exists (as of 2006) on the runway side of Saarinen's New York JFK terminal.

TWA's St. Louis hub suffered after the merger due to its proximity to American's much larger hub at Chicago's O'Hare International Airport. As a result, American replaced TWA's St. Louis mainline hub with regional jet service (going from over 800 operations a day to fewer than 300) and downsized TWA's maintenance base in Kansas City. Furloughs and layoffs have left less than 1,500 of 24,000 TWA employees with American Airlines jobs. Although American Airlines acquired over 200 aircraft from TWA (MD80s, 717s, 757s, and 767s), many analysts believe the TWA assets were not worth the additional debt inherited from TWA .

TWA Flight 800

On July 17, 1996, TWA Flight 800 exploded over the Atlantic near Long Island, killing all aboard. The National Transportation Safety Board concluded that the most likely cause of the disaster was a center fuel tank explosion sparked by exposed wiring. The cause is debated, but the media focused heavily on the fact that TWA's airline fleet was among the oldest in service. Boeing, the manufacturer of the 747 that crashed, has since been ordered by the FAA to take measures to prevent the buildup of dangerous fuel vapors by replacing used fuel with nitrogen. The airline association, however, has not conformed, explaining the prohibitively high cost of the solution. CNN even reported on its No Survivors program that the aviation industry had a dollar tag on human life, a $2.7m value.

External links

Internet Archive of Trans World Airlines' website
TWAlive
Fly TWA Historical Site
Terminal 5 TWA's Terminal 5 at New York's Kennedy International Airport
TWACrew.com
Trans World Israel 1946-2001
TWA Roissy Charles de Gaulle website
TWA Directors of Customer Services website
TWAPilot.com
TWA Video at Google Video
TWA plane with AA stripes

Defunct airlines of the United States | 1925 establishments | 2001 disestablishments | St. Louis, Missouri