Report: Investment group, Russian airline bid for control of TWA
Jan. 30, 1997
ARLINGTON, Va. (AP) _ A New Jersey-based investment group is teaming with Russia's second-largest airline in a bid to take control of struggling Trans World Airlines, USA Today reported today.
Russian carrier Transaero wants to use TWA to create a global airline, its vice chairman, Gregory Gurtovoy, told the paper.
TWA spokesman John McDonald, reached at home Wednesday night by The Associated Press, said he had no knowledge of the proposal.
The report said representatives of Strategic Capital Group, which is led by investor Brian Freeman, presented the plan to TWA's board at a meeting Tuesday. Freeman has a longstanding relationship with the airline's Machinists union, the paper noted.
The report said it is unclear how Strategic Capital would gain control of TWA, which is 30 percent owned by employees. It would cost $3 billion to buy half of the airline, the paper said.
For the fifth time since 1993, TWA is searching for a new leader after chief executive Jeffrey Erickson announced two months ago he would quit. The company suffered a huge disaster last July when one of its planes crashed off the coast of Long Island, killing all 230 people on board.
USA Today said TWA is expected to be the only major airline to report a loss for 1996.
Privately held Transaero, which ranks behind only Aeroflot in its home country, flies from Moscow to 30 destinations worldwide. Gurtovoy told USA Today the plan is to combine the airlines' operations within the United States and link them to Europe.