Air Transport World

What does Icahn want? (Carl Icahn restructures Trans World Airlines)

One ever will accuse Trans World Airlines Chairman Carl Icahn of staying with the same strategy for too long, nor of being too predictable. Over the past six years, he has led TWA through a dizzying series of twists and turns that have left both critics and admirers unsure of his ultimate direction. His latest move, unveiled at the end of July, is a debt-for-equity swap under which TWA's lenders win trade in their debt paper for a little bit of cash, new debt paper and stock in a reorganized TWA (see table).

The restructuring program should provide ammunition for Icahn doubters and enthusiasts alike. On one hand. there is no denying that reducing TWA's debt load is a positive move. on the other, it probably is more than coincidence that die deal also insulates Icahn from TWA's growing pension liabilities. George Pearson, vice president of information services for Avitas, Inc., is a skeptic: "I look at his operations and see the manipulations of a financial person, not an airline person," he told ATW, adding: I see an effort to improve his financial posturing."

And other analysts with whom A YIV talked believe that by itself, the restructuring will not save TWA. "Does it make TWA more competitive? The answer is yes. But does it make it a long-term survivor? …

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