TWA Plans to Order Up to 40 Airbus Jets Worth $3.6 Billion

In a drive to modernize its fleet, Trans World Airlines Inc. announced plans today to buy up to 40 jets from Airbus Industrie in a deal worth more than $3.6 billion.

The order is a major victory for Airbus, which has faced difficulties in competing with U.S. aircraft manufacturers Boeing Co. and McDonnell Douglas Corp. due to the sharp decline in the dollar.

It was one of the biggest orders for new aircraft and followed multibillion-dollar purchases announced recently by American Airlines and Delta Air Lines.

TWA Chairman Carl Icahn said the airline will place firm orders for 20 A330-300 twin-engine wide-body aircraft and take options on an additional 20.

Airbus, a consortium backed by Britain, France, West Germany and Spain, will begin delivering the 300-seat aircraft to TWA in late 1994 or early 1995, depending on engine selection.

Upgrading Fleet

Icahn, the New York financier who gained control of TWA in early 1986, said the planes would be used for major North American and trans-Atlantic routes.

For TWA, the purchase represents a commitment to upgrade its fleet, which is now one of the oldest among the major airlines.

Commenting on the deal in a prepared statement, Icahn said: “This concludes an aircraft evaluation study begun more than two years ago, and reaffirms our commitment to TWA’s long-term growth and prosperity.”

TWA’s order is the largest ever for the A330, which is scheduled to enter service in September, 1993. Airbus has been building a new assembly line for the craft in Toulouse, France.

So far Airbus has received 210 commitments for the A330 and A340 program from 14 customers worldwide.

Unfair Advantage

Operating the A330 will cost 33% less than operating TWA’s L-1011s, the airline said.

Boeing and McDonnell Douglas have complained that European government support for Airbus has given the consortium an unfair advantage in competing in the lucrative market for passenger jets.

Since its founding in the early 1970s, Airbus has risen to challenge McDonnell Douglas in terms of share of the market. Each now has about 20% of total orders. Seattle-based Boeing remains the industry leader, however, with over half of worldwide sales.