Bad Day Gets Worse as TWA Chief Resigns
The chief executive of Trans World Airlines Inc. on Thursday announced his resignation, hours after the airline posted a $14.3-million quarterly loss linked to the July explosion of a TWA jetliner.
Jeffrey H. Erickson, 51, who also is the airline’s president, said he will step down in January.
“I have decided that it is time for me to move on,” he said in a statement that mentioned neither the crash that killed 230 people nor the quarterly loss.
“I am proud of the accomplishments of the people of TWA under my leadership, which included a successful financial restructuring,” he said.
An airline spokesman said that there would be no additional comment. He said Erickson was not in St. Louis, where the airline is headquartered, and would not say where he was.
TWA reported a third-quarter loss of $14.3 million, or 40 cents a share, an improvement from an $82-million loss in the year-ago quarter. Because the airline emerged from Chapter 11 bankruptcy protection last August, it did not report per-share results for that quarter.
The third-quarter period included the July 17 crash of Flight 800.
Ironically, on that date, TWA reported a 400% gain in its second-quarter earnings, representing a big turnaround for an airline that has been in and out of Bankruptcy Court twice.
Erickson was in London the day of the crash. He cut short his trip and flew back the next day. Nonetheless, he was widely criticized for his response. New York City Mayor Rudolph Giuliani called TWA management “abysmal and horrible.”
Erickson said that advance bookings and premium-fare bookings dropped after the crash. In addition, fuel during the quarter cost about 30% more than it did at the same time in 1995, and the cost of maintenance materials and repairs more than doubled.
Word of Erickson’s resignation came after the close of the American Stock Exchange. The stock had closed up 37.5 cents a share at $8.50.
Erickson came to TWA in April 1994 after serving as chief executive of Reno Air, a young start-up based in Nevada. He previously worked at Pan Am, Midway and Continental airlines.
TWA was the nation’s seventh-largest airline by revenue in 1995. The airline announced plans in February to hire 2,100 workers this year, including the first new flight attendants in two years.
Erickson said he would work with the airline’s board to select his replacement.
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Delta Air Lines reported a 19% rise in earnings to $238 million, or $3.09 per share, for the July-September quarter, the first of the airline’s fiscal year. That compared with $201 million, or $3.47 per share, in the same three months of 1995.
The earnings were lower than analysts estimates of about $3.11 per share.
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Southwest Airlines said its third-quarter profit fell 10% on higher fuel prices and maintenance costs.
The Dallas-based company posted earnings of $60.9 million, or 40 cents a share, for the three months ended Sept. 30, compared with $67.7 million, or 45 cents a share for the same quarter last year.
Analysts had expected earnings to equal about 38 cents per share.
Southwest is beginning service into the Northeast on Sunday from Providence, R.I.
