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EARNINGS

TWA Loses $87 Million but UAL Posts Profit

July 22, 1986

Trans World Airlines reported Monday that it lost $87 million in the second quarter, blaming the result on fare wars, the dollar's declining value, lower transatlantic traffic and a flight attendants strike earlier this year.

United Airlines, the nation's biggest airline, reported a profit of $18.5 million in the quarter and said the figure would have been higher but for currency losses.

In reporting the loss, TWA Chairman Carl C. Icahn said, "I continue to have great confidence and belief in the long-term prospects and viability of TWA." Icahn purchased the carrier last year.

The loss for TWA, the nation's fifth-largest airline, compared to a profit of $18.1 million in the year-ago quarter. Revenue for the quarter ended June 30 totaled $731.9 million, a 29% drop from $1.03 billion a year earlier.

The number of international passengers dropped by nearly half from last year, and domestic passenger loadings dropped 12% from the 1985 quarter, TWA said.

Historically the dominant U.S. carrier across the North Atlantic, TWA was especially affected by a sharp drop in bookings to Europe because of apprehension about anti-American terrorist acts.

The company claims that it has recovered from the effects of a nine-week flight attendants strike that began March 7.

UAL Inc., the corporate parent of United Airlines, said its $18.5-million second-quarter profit compared to a $91-million loss a year earlier. Last year's loss was due largely to a 29-day strike by the airline's 5,000 pilots.

But the Chicago-based company said its profit was reduced by foreign exchange losses that totaled $49 million.

The second quarter is the first to fully reflect United's purchase of the Pacific division of Pan American World Airways for $750 million in February.

Revenue for the period doubled to $2.4 billion from the strike-hit $1.2 billion last year.

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