United Wins TWA Gates In Chicago
WILMINGTON, Del. (AP) _ United Airlines has beaten out archrival American Airlines in a bid to lease 16 takeoff and landing slots held by Trans World Airlines at Chicago’s O’Hare International Airport.
U.S. Bankruptcy Judge Helen Balick, who is overseeing TWA’s Chapter 11 case, approved the deal Thursday.
United bid $66,000 per month for each of the slots, which will give TWA $12.7 million a year. American had bid just $23,300 a month for each of the slots at O’Hare, where both American and United have hubs.
The coveted O’Hare slots give airlines access to the runways at the nation’s busiest airport. TWA has the option to terminate the one-year lease with 75 days’ notice to United.
TWA’s leasing of the slots drew an objection from Shawmut Bank, N.A., a trustee for some of the carrier’s bondholders, which argued it owns rights to the slots. After TWA agreed to put proceeds of the lease into an escrow account until that dispute is resolved, Shawmut withdrew the objection.
American and United had bid for the slots in an auction held Wednesday in a Wilmington law office.
Also Thursday, the judge postponed until April 3 TWA’s request that it be allowed to sign a collective bargaining agreement with the International Association of Machinists and Aerospace Workers. TWA is attempting to work out agreements with its creditors and the federal Pension Benefit Guaranty Corp., which have filed objections to the labor pact.
The PBGC, which insures pension plans, says the contract with the machinists could only serve to worsen problems TWA already has with underfunded pension plans.
The creditors said they want peace in the workplace, but they expressed concern that the machinists contract could prohibit certain asset sales that might be a necessary part of TWA’s reorganization.
Creditors suggested the contract could be approved, as long as they would be able to review it later. TWA said that would not be acceptable, so the matter was put off until next month to give the parties time to keep negotiating.