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Protests Filed to Halt Sale of TWA Routes : Transportation: Unions and politicians are trying to get Kirk Kerkorian to buy the troubled airline.

March 26, 1991|ROBERT E. DALLOS | TIMES STAFF WRITER

NEW YORK — Unions representing Trans World Airlines workers and a group of political and civic leaders Monday filed protests with the Transportation Department in an effort to halt the sale of TWA's London routes to American Airlines.

The group, which includes the mayor of St. Louis--where TWA has a major hub--and other Midwestern politicians, was seeking in the 11th hour to provide incentives for Beverly Hills financier Kirk Kerkorian to buy the financially troubled carrier from its owner and chairman Carl C. Icahn.

The latest development came after the unions agreed on Sunday to give a new investor $137 million in concessions. The plan would have the machinists union give concessions of $47 million, or 34% of the total; the pilots would contribute $40 million, or 29%, and the remaining $50 million would come from the flight attendants and the non-contract employees. Although negotiations on concessions lasted through the weekend, the unions said Monday that they still are far from any agreement to join forces with Kerkorian.

TWA has failed to make some payments on its debts and Icahn has said that the carrier is doing so poorly that it would have to be shrunk considerably in order to survive. Icahn could not be reached for comment Monday.

The unions, seeking to preserve jobs, have been trying to snare another investor. Without a new investor, some industry executives have speculated that TWA could be forced into liquidation.

Kerkorian has had a keen interest and direct involvement in the airline industry during almost all of his business career. He ferried gamblers to the then-new gambling mecca of Las Vegas after World War II. He has had financial interests in airlines for much of the period since and currently owns MGM Grand Airlines.

Kerkorian held talks with TWA earlier, but the talks were not successful. He reportedly said any investment he made would require all of the London routes to remain with TWA. A Kerkorian representative said he would have no immediate comment on the latest developments.

"This (Kerkorian involvement) is an alternative solution to TWA's dissolution and ultimate demise," said a spokesman for the TWA unit of the Air Line Pilots Assn. He said the effort to withhold the sale of the London routes to American was to enable the parties to make "progress" with Kerkorian "before Icahn has the further ability to disassemble" the airline.

ALPA also said in a recorded telephone message available to union members that "negotiations" with Kerkorian "on several key points" must still take place in the next few days.

American had agreed to purchase all of TWA's London routes for $445 million. But two weeks ago, the Department of Transportation tentatively approved the transfer of only three routes. These were the lucrative routes between London and Los Angeles, London and Boston, and New York and London.

The agency tentatively rejected the sale of routes from Baltimore, Philadelphia and St. Louis. It said the sale of those routes would stifle competition. USAir and Delta Air Lines have since expressed interest in buying those routes.

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