TWA Boss Wants Wage Cuts of $80 Million for Buyout
Chairman Carl C. Icahn has told a newspaper that the pilots’ union would have to make $80 million in wage concessions before he would agree to an employee buyout of Trans World Airlines Inc.
The Kansas City Star also quoted Bill Compton, head of the union’s negotiating committee, as saying pilots are not going to make any more concessions. Compton said Icahn already has received $500 million worth.
Analysts said three employee buyout plans have been discussed for the money-losing carrier, whose hub is at Lambert-St. Louis International Airport.
One idea, a 100% employee buyout, would not involve a cash payment to Icahn and would not involve outside financing. It would, however, eliminate Icahn from a managing role at the airline.
A proposal to split the airline into two companies would leave Icahn in charge of finances. Employees would be in charge of TWA operations.
The pilots union advocates a third plan, reducing TWA’s debt load by having junk bond holders exchange their notes for TWA common stock. That proposal would dilute Icahn’s control and possibly make way for new management.
TWA is carrying a debt load of $2.67 billion.