ad info

 
CNN.comTranscripts
 
Editions | myCNN | Video | Audio | Headline News Brief | Feedback  

 

  Search
 
 

 

TOP STORIES

Bush signs order opening 'faith-based' charity office for business

Rescues continue 4 days after devastating India earthquake

DaimlerChrysler employees join rapidly swelling ranks of laid-off U.S. workers

Disney's GO.com is a goner

(MORE)

MARKETS
4:30pm ET, 4/16
144.70
8257.60
3.71
1394.72
10.90
879.91
 


WORLD

U.S.

POLITICS

LAW

TECHNOLOGY

ENTERTAINMENT

 
TRAVEL

ARTS & STYLE



(MORE HEADLINES)
 
CNN Websites
Networks image


Morning News

TWA Agrees to American Buyout Offer

Aired January 10, 2001 - 9:01 a.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

DARYN KAGAN, CNN ANCHOR: We begin with a high-flying deal and the end of an enduring symbol in commercial aviation. TransWorld Airlines, TWA, is set to file bankruptcy just about an hour from now. That will pave the way for American Airlines to buy most of TWA's assets. The deal will mean the end of the TWA name. American will acquire TWA's planes, as well as its St. Louis hub. The arrangement also calls for American to offer jobs to nearly all of TWA's 20,000 employees.

Let's get more now on the proposed American-TWA deal from our Charles Zewe. He is joining us live from Dallas-Fort Worth International Airport.

Charles, good morning.

CHARLES ZEWE, CNN CORRESPONDENT: Good morning from Dallas, Daryn.

It is pretty quiet here at DFW right now. Things still getting cranked up on the American concourse. American, of course, is the big player in this deal that American CEO Don Carty is expected to announce an hour from now in New York City.

The total deal about $3.5 billion with American assuming most of the assets and some of the debt of 75-year-old TWA, which has been teetering on the verge of bankruptcy for a long time now. The airline hasn't had a profit in about 12 years, according to financial analysts. The deal will, as you just said, involve American taking over most of the assets and offering jobs to almost all of TWA's employees.

It will also mean creation of a huge airline. That is some concern to analysts who say that American, which is one of the dominant two players here in Dallas, of course, American's home base is here in Dallas -- Dallas-Ft. Worth area, that along with Delta that the airlines in big airports like this will see a consolidation of airlines.

As a matter of fact, some federal regulators are saying they are worried about that because if the American deal to buy TWA goes through without any challenges or any changes, then United Airlines' proposed assumption of US Air goes through without changes or challenges, then some airline analysts expect that what are now seven major carriers in the United States could shrink down to as few as two or three, with United, Delta and American, controlling almost 50, if not more, of the passenger traffic in the United States.

Consumer groups are starting to yelp about that. There's a possibility there could be a challenge to the American-TWA deal in federal bankruptcy court from other suitors. But financial analysts are saying that is not a real distinct likelihood, since without American's assumption of TWA and buying out of TWA, it is likely that TWA would have gone away, folded as a carrier, at least according to some financial analysts.

So the deal is being looked at very closely. Consumer groups are not too pleased so far. The stock of American and United Airlines, particularly American, took a hit on the stock exchanges yesterday and went down. People not too enthused yet about this deal, waiting for details from Don Carty -- Daryn.

KAGAN: Charles Zewe thank you very much from Dallas/Ft. Worth. We will look ahead to that announcement in the next hour.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

 Search   


Back to the top