Mystery Group Bids $1 Billion for TWA

Feb. 8 -- A group of unidentified aviation experts and investors said itwould bid nearly $1 billion to acquire Trans World Airlines,doubling the amount American Airlines said it would pay to takeover the troubled carrier.

Jet Acquisitions Group Inc. of Scottsdale, Ariz., wants topreserve TWA as an independent airline, retain most of itsemployees and eventually expand the airline.

“With Congressional hearings now underway to scrutinize theconsolidation of the airline industry and its effects oncompetition and consumer prices we believe our effort to thwart thetrend toward consolidation is particularly timely,” spokesmanStanford E. Lerch said in a statement.

Shrouded in Mystery

Michelle Tuchman, a spokeswoman for the company, would notprovide details about the group, other than to say that it included“former airline executives and general investors.” Carl Icahn,the billionaire financier who formerly ran TWA, was not involved,she said.

Including the assumption of $3.5 billion in lease obligationsand $1.7 billion that would be spent on expanding TWA’s fleet,Tuchman said the total value of Jet Acquisitions’ offer would be$6.2 billion.

American’s bid for TWA included the acquisition of parts of USAirways from United Airlines and a large stake in a new startupcarrier for $1.8 billion in cash and $3.5 billion in leaseobligations.

Can TWA Survive Alone?

David Stempler, president of the Air Travelers Association, saidhe doubts TWA could survive as an independent entity—noting thatsimilar-sized airlines such as Pan Am Airlines have gone out ofbusiness.

“The best for TWA in terms of its employees, the city of St.Louis, and for airline passengers, is probably to have it folded ormerged into a larger airline to continue its operation,” Stemplersaid.

American, based in Fort Worth, Texas, has said it would pay $500million for most of TWA’s assets, including up to 190 planes andthe St. Louis hub. It also would pay $82 million for a 49 percentstake in DC Air, a minority-owned startup of United Airlines and USAirways that would serve 44 markets out of Washington’s ReaganNational Airport.