Continental, Northwest Bid For TWA Assets
H O U S T O N, Jan. 24, 2001 -- Continental Airlines has reportedly indicated itis prepared to spend up to $400 million for some assets of TransWorld Airlines Inc. in a deal that would let TWA continue flying asan independent airline.
Northwest Airlines has also reportedly objected to AmericanAirlines' plan to buy most of TWA's assets.
Continental detailed its intentions in filings made Tuesday inthe U.S. Bankruptcy Court in Delaware, according to stories intoday's editions of the Houston Chronicle and The New YorkTimes.
St. Louis-based TWA filed for protection from creditors underChapter 11 of the federal bankruptcy laws earlier this month. Atthe same time, it said it had agreed to sell most of its assets toAmerican Airlines' parent company, Fort Worth-based AMR Corp., for$500 million, but that deal must be approved by the bankruptcycourt.
Houston-based Continental objected to the plans of American andTWA in filings with the court, the two newspapers reported.
"The current plan before the court does not allow time for fairand competitive bids on the assets," Continental spokesman NedWalker told the Chronicle. "Clearly American Airlines is trying tosteal TWA."
Walker emphasized that Continental's alternative would preservecompetition in the airline industry. The offer would allow TWA toget needed capital for its operations and allow the airline to keepflying as an independent carrier.
Continental is interested in landing and take-off rights thatTWA holds at JFK and La Guardia in New York; Reagan National inWashington; and Chicago O'Hare — assets that at the momentprimarily aren't being used by TWA.
Continental also would be willing to enter into an agreementwith TWA, which would allow TWA to sell tickets on Continentalflights and let TWA passengers earn Continental frequent-fliermiles.
Northwest Offers Cash for TWA Equity
The Times said Northwest, based in Eagan, Minn., also objectedto American's plans in a separate filing and said it was willing topay cash for TWA's 26 percent stake in Worldspan, a computerreservation system.
When American unveiled its deal with TWA, it also said it hasreached an agreement to buy certain assets that are to be spun offas part of a pending merger between United Airlines and US Airways.
When United announced its deal to buy US Airways in May, someindustry watchers predicted it would spur further industryconsolidation. American's deals are considered its response toUnited's move.
Julia Bishop-Cross, TWA spokeswoman, said today, "Wehaven't had a chance to look at the motions that were filed. But westill believe that the plan with American offers the best globalsolution."