ST. LOUIS -- Trans World Airlines Inc. announced Thursday it will relocate its headquarters back to St. Louis from Mt. Kisco, N.Y., as part of a $70 million agreement with the city of St. Louis.
The announcement follows Wednesday's confirmation of the airline's reorganization plan by a Delaware court.
Approval of the plan had been in doubt until TWA and St. Louis reached an agreement Wednesday prior to the court hearing calling for TWA to sell assets at Lambert Field -- such as gates, jetways, baggage systems -- to the St. Louis Airport Authority for $64.7 million. The authority will lease back the assets to TWA.
The first payment of $24.7 million is due by Oct. 31, and the second installment for $40 million will come by Dec. 31 from a bond issue with TWA assets as collateral.
TWA also has agreed to sell several other assets, such as the TWA flight training center and hangar building, to the city. In addition, the city has waived a $5.3 million claim for back-lease payments.
TWA moved its headquarters to Mt. Kisco, N.Y., from St. Louis after Carl Icahn bought control of the airline in 1986. The New York suburb was Icahn's home town, but the corporate raider relinquished control of the airline in January.
Despite the deal with the city, TWA reportedly also has been considering shifting its headquarters to Kansas City, Mo., where it had major operations, or New York.
TWA currently employs more than 7,000 people in the St. Louis area and the move of its headquarters will add another 150 employees to 200 employees. A specific location for the headquarters' site has not been finalized.
The relocation decision was announced by St. Louis Mayor Freeman Bosley Jr. and TWA Chairman and Chief Executive Officer William R. Howard.
'TWA would like to thank the mayor and his staff for their perseverance in negotiations that resulted in this decision,' Howard said. 'The city of St. Louis went above and beyond in their efforts to bring us home to the Midwest.'
Of TWA's 25,000 employees, the majority are located in the state of Missouri.
TWA plans to emerge from Chapter 11 protection by early September, 16 months after filing for bankruptcy with a $1.6 billion debt load. Its reorganization plan has sliced the debt to about $1 billion.
The reorganization plan, submitted in February by the management of the 65-year-old airline, will give employees a 45 percent stake in the carrier in exchange for a 15 percent wage-and-benefit cut, equal to $660 million, over three years. Creditors have agreed to forgive nearly $1 billion in claims in exchange for the remaining 55 percent.
TWA announced Wednesday a three-day promotion following the confirmation, offering free companion tickets good for travel within the United States from Sept. 15 to Jan. 31 or for travel to Europe from Nov. 1 to March 31. Tickets must be purchased by Aug. 14.
America West matched the promotion Thursday on the routes where it competes against TWA, but noted this covers only a third of its markets.
'We have studied this latest fare initiative and believe that we must match in a few markets where we compete directly with TWA,' said Marilyn Hoppe, vice president of revenue management. 'However, we hope that this fare sale does not lead to the destructive fare levels of the summer of 1992.'