TWA Defaults on Bond Payment of $75 Million : Airline: The carrier says it has $200 million on hand, but put off payment because it needs the cash.

Trans World Airlines Inc. said today that it will put off a $75.5-million bond payment because the financially troubled carrier needs to hang on to the cash in order to survive.

TWA said it had $200 million in cash on hand at the close of business Thursday but was nonetheless suffering extreme blows to bookings as air travel has fallen off amid the recession and the Gulf War.

The chief lawyer for the airline said, however, there were no plans to file for Chapter 11 bankruptcy protection from creditors.

TWA Chairman Carl Icahn issued a statement from his headquarters in suburban Mt. Kisco, N.Y., that painted a bleak picture of his airline’s health.

“While I am troubled by the need to withhold payment from certain of our creditors, I believe it is imperative for the survival of TWA,” Icahn said. “The war in the Middle East has precipitated a 60% drop in bookings over the last year. It is now apparent that due to the war, summer vacation travel will be at its lowest level in decades.”

Icahn also cited what he called the devastating effects of “high fuel costs, a fall-off in leisure and business travel resulting from the recession, and fare wars that have affected the entire industry.”

TWA said its cash on hand included $110 million received from American Airlines, which completed its purchase of TWA’s Chicago-London route Thursday.

TWA has agreed to sell other prized London routes to American, one of the air travel industry’s strongest companies, but the deal is threatened by the refusal so far of the British government to let TWA transfer its landing rights at London’s Heathrow Airport.

TWA said that despite today’s default, it was continuing to make payments on other debts “and has every intention of continuing these payments.”

But the carrier warned that other debt could fall into default.