The Rise & Fall Of TWA

It’s been nearly two decades since American carrier Trans World Airlines flew its final official flight in December of 2001. However, having been in operation for 70 years, the airline joins the company of Pan Am as an icon of America’s golden age of aviation and a pioneer of commercial passenger travel. This is a brief re-telling of the rise and fall of TWA.

Tail of Lockheed 749 Constellation, Wroughton, Wiltshire, 1984.
The Lockheed Constellation, pictured here, belonged to Trans World Airlines (TWA) and was built in September 1947. Photo: Getty Images

The early years

At its founding in July 1930, TWA was not an acronym for Trans World Airlines. Instead, it stood for Transcontinental and Western Air and was the result of a merger between Western Air Express and Transcontinental Air Transport.

The reason for the merger was that the US Postmaster General believed that two airlines, which both had government contracts to deliver airmail, should not operate identical routes while being paid by the government for such services. The two airlines merged on his suggestion.

One of the first mail contracts taken as a new airline included coast-to-coast flights on October 25, 1930, with an overnight stop at Kansas City.

twa 3 March 1954.
Until 1950 the airline was known as Transcontinental & Western Air, but changed to Trans World Airlines after that. Photo: Getty Images

The rise of TWA

In 1934, a man by the name of William John Frye became president of TWA. Frye was only 30 years old and was a Hollywood stunt flier before working for the airline. Ordering the Boeing 307 Stratoliner in 1938, Frye convinced an eccentric millionaire by the name of Howard Hughes to finance the purchase and invest in the airline.

Very shortly after, World War II erupted and TWA’s aircraft were used to support the US military. However, after the war, the airline aggressively expanded and fought for market share against airlines like American and United. It was in 1946 that TWA introduced the Lockheed Constellation on its transcontinental New York-Los Angeles route. This was seen as superior to United’s service which utilized the DC-4. That same year, the airline began transatlantic service between New York City and Paris.

TWA hotel
A TWA Lockheed Constellation aircraft is now at New York JFK as part of the TWA Hotel. Photo: Jag9889 via Wikimedia

After changing its name to Trans World Airlines in 1950, the carrier introduced the Lockheed L.1049 Super Constellation in September 1952 and subsequently became the first airline to inaugurate regularly scheduled, nonstop transcontinental service between Los Angeles and New York on October 19, 1953. Also, throughout the 50s, TWA would greatly expand its reach, flying to destinations throughout Europe, the Middle East, Africa, and Asia.

Throughout the 1960s and 70s, TWA continued to remain a powerful player in both the international and national markets. It even became the first airline to introduce in-flight movies in 1961. Growing more, TWA acquired the entire chain of Hilton Hotels in 1967.

1958 TWA Route Map
TWA’s route map in 1958. Photo: Trans World Airlines

“American and United survived because they had iron-willed CEOs dedicated to being the number-one carrier. Ours were distracted…We were always known for coming up with little gimmicks like inflight movies, coffee and [frozen] meals, but the big corporate decisions were lacking.” – John Gratz, TWA pilot from 1955 to 1991 via St Louis Magazine

Then, in July 1969, the airline officially beat out Pan Am as the world’s number one transatlantic airline. Less than a year later, in 1970, TWA would begin flying the Boeing 747 jumbo jet on its well-established New York-to-Los Angeles service.

TWA 747
TWA, like many other airlines, was impacted negatively by the 1978 Airline Deregulation Act. Photo: Pedro Aragão via Wikimedia

The fall of TWA

There are several factors that led to TWA’s downfall. The first of which was the introduction of the 1978 Airline Deregulation Act. Engaging in intense competition from other airlines while battling stiff operating costs didn’t to the airline any favors.

Financially weak, a man by the name of Carl Icahn swooped in and took control of TWA in 1985. In 1988, Icahn took TWA private, receiving $469 million in the deal – equivalent to $1.01 billion in 2020. The agreement also meant that TWA would take on $540 million in debt – $1.17 billion in today’s dollars.

In 1991, Icahn sold TWA’s coveted London routes to American Airlines for $445 million. Some believed that the loss of these valuable assets accelerated TWA’s demise. In 1992, TWA filed for bankruptcy. A year later, in 1993, it emerged with 55% of the company under creditor ownership.

Old American Airlines aircraft
Carl Icahn of TWA sold valuable London routes to American Airlines in 1991. Photo: Getty Images

Icahn was himself a creditor and was owed $190 million. With TWA desperate to finish business with Icahn, an eight-year agreement was made that gave him the ability to buy select tickets at 55% of the cost. Reselling the tickets on the internet, American Airlines (the future owner of TWA) estimated that $100 million per year was being lost because of the deal with Icahn.

After this, TWA would go into bankruptcy again in 1995. This would be followed by a tragic TWA explosion in 1996, killing 230 passengers. If that wasn’t enough, the late 90s saw TWA stifled by the strong power of mechanics unions, which successfully resisted the closure of large and unnecessary maintenance bases. On top of this, European labor laws meant TWA had to keep unnecessary workers employed in Europe.

“We had to either pay them forever or try to buy them out, which meant wages and salaries for the next 25 years. That made it extremely difficult to be competitive with the Continentals and Deltas and Americans that were coming in, outsourcing labor.” – Jack Stelzer, VP of Planning, TWA (1997)

Finally, in January 2001, it was announced that TWA was bankrupt for the third time and would be sold to American Airlines. The airline was able to operate under its existing name and brand in the months after the deal. However, due to the events of September 2001 and the subsequent collapse of the aviation industry, TWA’s new owner had to make job cuts in October 2001, laying off some employees and furloughing others.

Employees of Trans World Airlines and American Air
Employees of Trans World Airlines and American Airlines celebrate the purchase of TWA by American Airlines with a group photo during a party at the TWA hangar at Los Angeles International Airport in April 2001. Photo: Getty Images

Conclusion

After going through its long history, it’s clear that TWA’s demise was a messy combination of internal and external factors, each successive event making the situation worse. Airline deregulation in 1978 certainly didn’t help its situation, nor did eccentric or damaging leadership.

While it’s possible that TWA could have survived its internal troubles if not for the unpredictable disasters of 1996 and 2001, we will unfortunately never know.

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