Trans World Airlines (TWA) says that it remains pledged to slimming down its operations after sustaining a tenth successive net loss in 1998. The company ended the year $120.5 million in the red and lost $79.1 million net in the last quarter alone.
The St Louis, Missouri-based carrier blames more than half of the fourth-quarter loss on special charges relating to overheads and a fleet rationalisation programme. It adds that moves aimed at cutting costs will continue this year.
Around 1,000 jobs - or nearly 5% of TWA's 21,000-strong workforce - are to be shed, mostly through "attrition", and the airline indicates that it could take further special charges as it pares back bloated operations.
"TWA recognises that to continue the financial recovery of our airline, we must address overhead issues such as infrastructure in the countries we serve overseas that were sized for the TWA of the 1970s," says the carrier's chief executive, Gerald Gitner.
Gitner adds that "excess facilities" in areas including reservations and maintenance could also be cut, and says that, although "-dealing with these issues is neither easy nor inexpensive, it is something that must be done".
TWA chief financial officer Michael Palumbo adds: "As we continue to remove brick and mortar and potentially some head count to become more productive, there might be some additional facility and head count charges."
TWA's 1998 net loss is 8.7% higher than its loss of $110.8 million in 1997. Turnover was also down, with last year's $3,259 million representing a drop of 2.1% from 1997's $3,328 million. Assessed according to this figure, TWA remains the USA's eighth-largest airline. Quarterly turnover was down 8.1% to $747.1 million.
The carrier's $79 million fourth- quarter loss was more than double the $31.2 million lost in the same period in 1997, with $25 million spent on retiring ageing Boeing 727s and non-hushkitted McDonnell Douglas DC-9s. A further $17.6 million was lost on restructuring operations in Israel, Italy and elsewhere, plus the closure of its Los Angeles reservations office.
The US business travel market is being squeezed by company cost-cutting and, although TWA's full-year load factors were up two points, to 70.9%, the last-quarter figure fell by 1.8 points, to 65.1%.
Revenue passenger kilometres for the year decreased by 2.7%, to 39.3 million. Despite a 4.6% growth in passenger revenue per available seat kilometre, TWA's figure for the year still trails that of eight other US majors.
Source: Flight International
