Thursday, February 8, 2001
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Posted on: Thursday, February 8, 2001

New firm to outbid American for TWA

Associated Press

DALLAS — A new company formed by aviation experts and investors said yesterday it would bid nearly $1 billion to acquire Trans World Airlines, doubling the amount American Airlines said it would pay to take over the troubled carrier.

Jet Acquisitions Group Inc. of Scottsdale, Ariz., wants to eliminate TWA’s current debt, retain most employees, modernize its facilities and eventually expand the airline.

"Our group is adamant that TWA should be preserved as an independent and financially viable airline," group spokesman Stanford E. Lerch said in a statement. "Our bid is more than twice the size of the nearest offer for TWA that was previously made by American Airlines."

The company did not provide details about how its bid would be financed, but said it would provide a $1 billion guarantee "shortly." Michelle Tuchman, a spokeswoman for the company, said she could not say who was involved in the group. "I can’t give you the specifics. It’s fair to say that some of them are former airline executives and general investors," she said.

American, based in Fort Worth, Texas, has said it would pay $500 million for most of TWA’s assets, including up to 190 planes and the St. Louis hub.

It also would pay $82 million for a 49 percent stake in DC Air, a minority-owned start-up of United Airlines and US Airways that would serve 44 markets out of Washington’s Reagan National Airport.

The American proposal is awaiting approval of federal regulators.

"The way it’s set up, anyone is free to bid," American spokesman John Hotard said in response to Jet Acquisitions’ bid. "They’re free to bid whatever they want."

A federal judge has extended the deadline for bids to Feb. 28.

TWA, based in St. Louis, has continued operations while bankruptcy proceedings occur.

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