Newspaper article St Louis Post-Dispatch (MO)

For Trans World Airlines, It's Chapter 11 Again Bankruptcy Protection Planned in an Agreement with Creditors

Newspaper article St Louis Post-Dispatch (MO)

For Trans World Airlines, It's Chapter 11 Again Bankruptcy Protection Planned in an Agreement with Creditors

Article excerpt

Trans World Airlines said Wednesday that it would soon file for Chapter 11 bankruptcy, its second such filing in 3 1/2 years. The airline will continue flying and passengers should see no immediate change in service.

TWA has been losing money for years, and the bankruptcy filing was expected. It is intended to cut the company's debt by $500 million and reduce yearly interest payments by $50 million.

A source close to the company said it would file for bankruptcy this week in St. Louis.

TWA's passengers should notice no difference in service, flight frequency or fares, said TWA spokesman Robert Mead.

"We don't expect this to have any impact on our operations," Mead said. "We don't expect our employees or passengers to be affected in any way. It will be business as usual."

The airline, which is based in St. Louis, has 7,500 employees here and 4,000 in Kansas City. The bankruptcy doesn't appear to jeopardize any of those jobs.

Chapter 11 bankruptcy allows a company to keep operating while it reorganizes its finances under the protection of the courts. TWA's first trip to bankruptcy court began in January 1992 and ended in August 1993.

TWA describes the bankruptcy proceedings as "pre-packaged," meaning that most of the company's creditors and shareholders have agreed to its reorganization plan.

Pre-packaged bankruptcies typically move quickly, and the company said it expects to emerge from Chapter 11 by September.

Stephanie Turner, president of Brentwood Travel, said, "This is just a way to get their debts out from under them. I don't think it's going to affect travelers or travel agents."

She said that when TWA filed for bankruptcy the first time, only a few customers seemed to fear that the airline would stop flying.

TWA's domestic hub is Lambert Field, where it accounts for the majority of flights. Air travelers here often have little choice in airlines and will take TWA in any case. Turner said some travelers may choose other airlines in cities where TWA faces greater competition.

Turner said anyone flying on a troubled airline should take one easy precaution: "People should buy their tickets with a credit card."

Credit-card companies in the past have returned payment on tickets of airlines that suddenly ceased operations. …

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