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Court Orders TWA to Return 10 Planes to Bank : Airlines: The carrier also must send back 96 jet engines on which it missed lease payments.

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TIMES STAFF WRITER

Financially ailing Trans World Airlines’ troubles deepened Monday when a federal judge ordered it to return to a bank 10 planes and 96 jet engines on which it has missed lease payments.

U.S. District Judge Gerard L. Goettel in White Plains, N.Y., ordered the planes and engines returned to Connecticut National Bank because the airline had not paid $57 million due in principal and interest payments. “Just as a tenant can be evicted, a lessee of property who fails to pay can be required to return the property to its owner,” the judge’s order said.

TWA sold the equipment to the bank five years ago, then agreed to lease it back until Feb. 1, 1996. The bank sued TWA after it announced in February that it would default on some $75 million in various debts.

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Mark Buckstein, the company’s general counsel, said in a statement that TWA had proposed a moratorium on its outstanding obligations until next February. “We hope the proposal will be accepted,” he said.

TWA had argued that the loss of the equipment would have “tremendous ramifications,” including the possibility that flights would be canceled. According to an Associated Press report, the judge said he did not believe that his decision would have a great impact on TWA’s business, noting that only 10 of the airline’s fleet of slightly more than 200 planes would be taken out of circulation. But it was unclear how many of the planes in the fleet would be affected by the return of the engines, the judge said in his ruling.

TWA Chairman Carl C. Icahn, who owns 90% of the carrier, declined to comment.

Meanwhile, TWA and American Airlines seem to have reached an impasse over the sale of the TWA London routes to American. TWA vowed that it would not take any less than the $445 million American Airlines had agreed to pay for all the London routes. TWA said it would continue to fly them if the deal fell through. It said the threat that it might have to declare bankruptcy if it did not soon receive cash from the proposed deal had diminished as a result of improved summer bookings and its cash position.

Buckstein said the agreement between TWA and American will be subject to termination on May 15 “unless American waives its rights to receive six routes to London and accepts the transfer of three routes.”

Last week, the Transportation Department granted final permission to American to purchase TWA’s routes connecting London with Los Angeles, New York and Boston. It rejected the sale of three other routes between London and Philadelphia, St. Louis and Baltimore.

As a result, American says, the transaction with TWA must be renegotiated.

“We do not agree with the TWA statement on how to interpret our contract,” an American spokeswoman said.

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Buckstein said he was surprised that American was advising all travel agents that subscribe to American’s Sabre computerized reservation service that it intends to begin flights to London’s Heathrow Airport on July 1. American is known to be anxious to begin service to London to compete with its archrival United Airlines, which recently began flying London routes it acquired from Pan American World Airways.

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