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Airline Group Offers To Buy TWA Reservations System

August 15, 1985

NEW YORK (AP) _ A group of U.S. and foreign airlines offered Thursday to buy the reservations system owned and operated by Trans World Airlines Inc.

The group said it already has had talks with TWA about buying the system, and that it sent a letter to C.E. Meyer Jr., TWA’s chairman and chief executive, saying the group was ready to ″enter the final stages of negotiations″ to purchase the system.

The group did not disclose what it was prepared to offer for the system, however.

TWA had no comment on the group’s announcement, said Lori Feinberg of Kekst & Co., a public-relations firm speaking on behalf of the airline.

TWA currently is the target of rival takeover bids from Texas Air Corp., the parent of Continental Airlines and New York Air, and financier Carl C. Icahn, who already owns 45.5 percent of TWA’s common stock outstanding.

Earlier this week, in a bid to curb what industry observers consider is Icahn’s advantage in the TWA fight, Texas Air suggested it be granted an option to buy TWA’s reservations system and its lucrative international routes. The actions apparently would be aimed at making TWA less attractive to Icahn.

Texas Air also suggested other tactics that would increase the number of TWA common shares outstanding, diluting Icahn’s stake in TWA.

The airline group, comprised of 24 carriers and calling itself the Neutral Industry Booking System Interest Group, or NIBSIG, cited Texas Air’s proposals in reaffirming its bid for the reservations system.

″We strongly urge that you continue negotiations with us,″ Bruce Cunningham, NIBSIG project director, said in the letter to Meyer. ″If you have received from or have made an offer to Texas Air Corp., we would appreciate the opportunity to improve upon that offer.″

TWA’s system, known as the Programmed Airline Reservations System, or PARS, is used by about 3,650 travel agents in the United States. TWA says that PARS is the nation’s third-largest system behind United Airlines’ Apollo system and American Airlines’ Sabre system.

The Apollo and Sabre systems - which together are used by about 15,000 travel agents - have been criticized by some airlines, notably Continental, for allegedly favoring their owner airlines when the agents search airline schedules for their clients. United and American have denied any such bias.

Regardless, the NIBSIG said its purchase of TWA’s system would result in a ″totally neutral reservations computer system″ that ″would not pit one airline against the other, but instead, would objectively list flights and fares.″

The airlines in NIBSIG are: Continental, Aer Lingus, Air Canada, Aerolineas Argentinas, Air New Zealand, Alitalia, British Airways, British Caledonian Airways, Iberia Air Lines of Spain, Japan Air Lines, KLM Royal Dutch Airlines, Lufthansa German Airlines, Northwest Airlines, Ozark Airlines, Pan American World Airways, Pacific Southwest Airlines, Piedmont Airlines, Qantas Airways, Republic Airlines, Singapore Airlines, Swissair, USAir, Varis and Western Airlines.