As expected, American Airlines confirmed its reported intention to purchase assets of Trans World Airlines. The deal calls for TWA to file for bankruptcy and American to take over the airline for some $500 million. If approved, TWA would be merged into American, bringing an end to one of the most renowned brands in U.S. aviation history. American and TWA will soon begin merging their frequent-flier programs, even before the deal is completed. In a separate deal, that could ease regulators' concerns about the proposed United Airlines/US Airways merger, American has agreed to purchase planes and airport gates owned by US Airways and to jointly operate the Washington-New York-Boston shuttle with United. Both moves would bolster American's presence on the East Coast. On the ad front, the big loser may be agency D'Arcy Masius Benton & Bowles, St. Louis-which handles TWA's estimated $30 million account. American has a solid relationship with Temerlin McClain, Irving, Texas.
Copyright January 2001, Crain Communications Inc.