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TWA's flight ends as it merges into American

TWA's flight ends as it merges into American

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By Terry Maxon

The Dallas Morning News

Trans World Airlines Inc. survived congressional investigations in the 1930s, World War II in the 1940s, the change from propeller to jet airplanes in the 1950s and 1960s and industry deregulation in the 1970s.

But after years of financial problems, time will finally run out on the venerable aviation name Saturday night when the last TWA flights land in St. Louis and at airports across the nation.

On Sunday morning, the TWA name will be replaced with that of new owner American Airlines Inc. on airport gates and facilities. TWA flights will be American flights, and TWA's customers will become American's customers.

"They were a great company," said American executive Robert W. Baker, who has led TWA since American bought it April 9 and converted it to TWA Airlines LLC.

TWA "has struggled, going back 20 years," Baker said. "But they were once a premier U.S. flag carrier on the North Atlantic and domestically."

Piloting the ceremonial last trip Saturday afternoon will be TWA's president, William Compton, who has retained his McDonnell Douglas MD-80 license. The flight will travel to St. Louis, home of TWA's connecting hub and headquarters, from Kansas City, Mo., home of TWA's largest maintenance base.

While workers will be replacing TWA's name with American's throughout the TWA system late Saturday, computer workers will be attempting an overnight switchover of TWA's computer system to American's.

TWA's computers run on software supplied by Worldspan, a large airline computer company that had been partially owned by TWA. After the weekend switchover, they'll run on the Sabre system, which was created by American and now is an independent company.

Aviators, TWA's frequent-flier club, closed Friday, and members were shifted to American's Aadvantage program., the airline's Internet site, will close Jan. 2, but no bookings could be made on the site after Friday.

TWA loyalists who long for a lengthier goodbye to the old brand will be able to see TWA's names on airplanes and employees' uniforms for a while.

But American plans to convert the last TWA airplane to American colors by April. The new uniforms have been ordered, and when they arrive, TWA employees will follow the dress code of their new employer.

Behind the scenes and out of mind for most customers, other changes will come soon and much later.

On Jan. 1, American will apply its wage rates and benefits to TWA employees, a change that will mean pay raises for most TWA employees.

TWA will continue to fly under its own Federal Aviation Administration operating certificate for several years because its aircraft, procedures and manuals must be converted to American's way of doing things.

"We know it will be completed by the end of 2005," said Robert Olson, an American vice president assigned to head the American-TWA task force that is combining the two carriers.

The most important part of the airplane conversions will be standardizing the airplanes so that pilots aren't confused by different cockpits. For example, Baker said, some warnings on TWA airplanes may sound as bells, while on American's airplanes would sound as chimes.

American must also decide how many changes it wants in the passenger cabins to make TWA's airplanes look like American's, Baker said.

"They never installed galleys to allow them to have hot food in coach," Baker said. "Because their airplanes were bought in chunks, they have lots of different types of seats. The bulkheads are different. The lavatories are different. Their cart system for food and so forth is different."


It was Compton who finally decided that TWA had to find a savior quickly or disappear with all jobs lost.

Compton, TWA president since December 1997 and chief executive officer since May 1999, engineered American's acquisition in hopes of keeping as many of the airline's 20,000 employees as possible. The merger was announced Jan. 9, the same day TWA filed for bankruptcy protection for the third time.

Compton said TWA had to act quickly. On the day of the merger announcement, the airline had about $100 million in cash on hand, a $100 million debt that came due around Jan. 20 and more losses every day.

Although TWA was trying to refinance the debt, it had little hope of surviving much longer, Compton said this week. Without American's intervention, "I believe that TWA would have liquidated early in the year."

"They were ecstatic because the TWA employees had been through very difficult times, not for the last couple of years but for the last couple of decades," Compton said.

But they aren't as happy as they would have been, if the condition of American and the entire airline industry hadn't worsened so much since American negotiated the deal to pay about $2.8 billion in cash, debt and lease assumption for TWA.

By spring, U.S. airlines were seeing a downturn in trips by business travelers, their most lucrative customers. The average fare paid by passengers began dipping as spring moved into summer.

Then, on Sept. 11, terrorists hijacked two American and two United Airlines Inc. flights, crashing them into the World Trade Center, the Pentagon and rural Pennsylvania. Traffic immediately declined by half and is still sharply down more than two months later.

American quickly decided to cut 20,000 jobs - about 15,000 at American, 3,000 at its TWA subsidiary and just under 2,000 at commuter carrier American Eagle. Some of those job cuts are still being implemented.

"Everybody felt very good about this until we had the tragedies of Sept. 11," said Compton, who will retire Dec. 31 after 38 years at TWA. "The plan was always to grow the airline and take care of all of our employees, both on the American side and on the TWA side."

The integration has not been without controversy. TWA unions have protested the combination of the seniority lists, and pilots, flight attendants and other unionized workers are still waiting for a final plan.

The Allied Pilots Association has decided to put more than half of TWA's pilots at the bottom of the American seniority list as of April 9, 2001, the date the TWA deal closed. The more senior TWA pilots will get a higher place but won't get the same seniority as they would have had if they had been working at American for the same number of years.

That proposal has angered TWA's pilots, represented by the Air Line Pilots Association, who labeled it a "cram-down" forced on the smaller group of pilots.

But it's more generous than the one proposed by American's flight attendants, represented by the Association of Professional Flight Attendants. Baker said that union has proposed putting all of TWA's flight attendants at the bottom of American's list as of April 9.

In good times, better seniority gives employees first pick at the better jobs and schedules.

In bad times like now, it will decide who gets furloughed and who doesn't.

A combined seniority list will have an immediate effect on furloughs. With TWA employees near the bottom of the combined lists, many American employees on furlough will come back to work and be replaced by the less senior TWA employees.

Unhappy TWA pilots have enlisted U.S. senators to try to pass legislation to improve their standing. On Friday, the pilots hired the law firm of well-known attorney David Boies to take up their dispute with the Allied Pilots Association.

The lead attorney, Alan Vickery, said the TWA pilots should be given seniority strictly on their date of hire. No neutral person would perceive the APA plan as "fair and equitable," he said.

Olson, who also heads revenue management for American, said he's disappointed that repercussions from Sept. 11 have hurt so many people.

"We're anxiously awaiting the day, it could happen very soon, that customer demand returns to historical levels and we're able to provide positive outcomes for more TWA folks," Olson said. "The majority of people had positive outcomes, but it's not the same percentage we were planning for before Sept. 11."

(c) 2001, The Dallas Morning News.

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Distributed by Knight Ridder /Tribune Information Services.


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