Faced with what he describes, modestly, as a 'major challenge', Trans World Airlines' chief executive Gerald Gitner has outlined a four-part plan to get the airline back on its feet. The St Louis-based carrier faces an uphill battle but should not be counted out yet.
At the airline's annual shareholders meeting Gitner, who took over the helm just four months ago, had little option than to admit the massive scale of the problem. 'In 1996 our plan went off track and we slipped in delivering the basics of good airline operation,' said Gitner. While not offering much in the way of timescale, Gitner listed four priority areas to address: schedule reliability, costs and productivity, building a profitable route system, and improving the yield mix.
Already TWA has made significant headway on reliability, coming second only to Southwest Airlines in April's on-time arrivals list published by the Department of Transportation, compared with tenth place in the same month in 1996. TWA has also cut flight cancellations from about 750 to 250 a month.
But the airline's other problems will be more difficult to resolve. Contract negotiations with employees, including pilots and flight attendants, are expected to be thorny; the airline must stem 'crippling losses' at its international hub at New York/JFK; and its target of attracting more business traffic remains elusive.
TWA's 1996 result - a net loss of $285 million - was worse than even the most pessimistic analyst predictions. But the carrier has at least bought some time. 'They've probably got at least until the end of the year - at the end of 1996, many people were not even giving them that much time,' observes one analyst.
Source: Airline Business
