Arrow-right Camera

The Spokesman-Review Newspaper The Spokesman-Review

Saturday, June 6, 2020  Spokane, Washington  Est. May 19, 1883
Rain 55° Rain

Mixed Reports From Twa: Lower Profits, Lower Fares

By From Wire Reports

Trans World Airlines Inc., still suffering from the crash of Flight 800 last summer, warned this week that second-quarter earnings will fall short of last year’s mark, and short of expectations.

It also pledge to lower summer air fares.

TWA made the announcement in a filing with the U.S. Securities and Exchange Commission. The St. Louis-based airline has not had a full-year profit since 1989.

TWA earned $25.3 million in last year’s second quarter.

On July 17, 1996, a TWA Boeing 747 exploded on a flight from New York to Paris, killing all 230 people aboard.

The crash was the most catastrophic event for TWA, and still haunts the airline, which operates more than 190 aircraft between 77 cities.

This week, for instance, travelers were reminded of the crash when James Hall, chairman of the National Transportation Safety Board, complained that the Federal Aviation Administration had failed to act on urgent recommendations to prevent explosions like the one that brought down TWA Flight 800.

As TWA’s earnings plunged, analysts also have pointed out other things troubling the airline:

It had an ambitious plan for expansion that could cause reliability problems;

It suffered from a less favorable mix of premium-fare and low-fare travelers;

It was paying higher prices for fuel.

TWA said in its SEC filing that all of those factors, which produced a $284.8 million loss last year, contributed to the decline in the second quarter this year.

TWA lost $71.6 million in the first quarter, nearly twice as much as it lost in the same period of 1996.

Earlier this week, the company said it will match air fare discounts of up to 45 percent being offered by United Airlines for the summer. United plans to sell discount tickets through July 11 for domestic flights completed before Nov. 19, international by Dec. 12.

TWA shares this week slipped from $8.0625 to close Thursday at $7.125 on the American Stock Exchange.

Other stocks that moved substantially on Thursday include:

NYSE

Northrop Grumman, up $21.125 at 110.

Lockheed Martin, down $4.875 at $99.125.

Logicon, up $12.75 at $67.25.

Los Angeles-based Northrop agreed to be acquired by Bethesda, Md.-based Lockheed for $8.3 billion in stock and $3.3 billion in assumed debt in a merger of the nation’s largest defense contractors.

In May, Northrop agreed to buy Torrance, Calif.-based Logicon in a stock deal then valued at about $725 million.

Duty Free International, up $3.625 at $23.75.

The Ridgefield, Conn.-based airport retailer agreed to be acquired by London-based BAA, the world’s largest commercial operator of airports.

NASDAQ

MCI Communications, up $2.375 at $42.375.

The Washington, D.C.-based long-distance provider rose on positive tax news for British Telecom. The two telephone giants plan to merge in the fall.

Inso, down $9.625 at $11.0625.

The Boston-based maker of multilingual software announced a restructuring late Wednesday amid a deteriorating market for some products. The restructuring includes charges of $5 million to $6 million.

Krystal, up $7.25 at $13.50.

The fast-food restaurant chain agreed to be acquired by Port Royal Holdings. Shareholders of Krystal, based in Chattanooga, Tenn., will receive $14.50 a share in the merger. Port Royal is a closely held company formed by Phillip Sanford, an executive with Coca-Cola Enterprises Inc.

Subscribe to the Coronavirus newsletter

Get the day’s latest Coronavirus news delivered to your inbox by subscribing to our newsletter.



Asking the right questions of your CBD company

Bluegrass Hemp Oil in Spokane Valley offers a variety of products that can be very effective for helping with some health conditions. (Courtesy BHO)
Sponsored

If you are like most CBD (cannabidiol) curious consumers, you’ve heard CBD can help with many ailments.