TWA to Buy 20 Boeing Jets in $1-Billion Deal

Trans World Airlines Inc., which came out of bankruptcy six months ago, said Monday that it will acquire 20 new Boeing 757-200 aircraft in a $1-billion deal.

The order is the latest sign of a turnaround at TWA, which has been through two bankruptcies this decade.

Last week, TWA said it planned to hire a total of 2,100 pilots, reservation sales agents and flight attendants this year.

Under the latest deal, TWA will buy half the planes and lease the rest and will have the ability to secure up to 20 options for additional 757s. The planes are due to be delivered between July 1996 and 1999.

According to Boeing Co., the 757 lists at about $65 million, which would put the total order value at $1.3 billion. Neither TWA nor Boeing would discuss the price.

Ten of the aircraft will be obtained through International Lease Finance Corp., with an initial 10-year lease. The financing company said its portion of the deal is worth $500 million.

TWA and Boeing’s decision to finance the deal shows growing confidence in TWA’s future. TWA last emerged from Chapter 11 bankruptcy proceedings in August. Its earlier reorganization was completed in 1993.

“This is a very positive sign for TWA employees because the acquisition of new aircraft is a sign of health and vitality for the airline,” TWA spokesman John McDonald said. “The fact that the manufacturers are financing the deal shows confidence in the company as well.”

S.G. Warburg analyst Brian Harris said Boeing’s willingness to finance the order is significant.

“It certainly is a vote of confidence from Boeing,” Harris said.

Analysts had viewed TWA as most likely among the majors to place an aircraft order because of the age of its fleet.

“It’s the oldest fleet of the majors,” Harris said, adding that the order will help TWA comply with noise regulations.

The new planes should also help the carrier cut its maintenance costs, which had soared as its fleet aged. The planes will replace 14 L-1011 aircraft and smaller narrow-body planes that TWA plans to take out of service.

TWA stock closed down 12.5 cents at $11.75 on the American Stock Exchange.