Continental May Buy Some TWA Assets

Wednesday, January 24th 2001, 12:00 am

By: News On 6

HOUSTON (AP) â€” Continental Airlines has reportedly indicated it is prepared to spend up to $400 million for some assets of Trans World Airlines Inc. in a deal that would let TWA continue flying as an independent airline.

Northwest Airlines has also reportedly objected to American Airlines' plan to buy most of TWA's assets.

Continental detailed its intentions in filings made Tuesday in the U.S. Bankruptcy Court in Delaware, according to stories in Wednesday's editions of the Houston Chronicle and The New York Times.

St. Louis-based TWA filed for protection from creditors under Chapter 11 of the federal bankruptcy laws earlier this month. At the same time, it said it had agreed to sell most of its assets to American Airlines' parent company, Fort Worth-based AMR Corp., for $500 million, but that deal must be approved by the bankruptcy court.

Houston-based Continental objected to the plans of American and TWA in filings with the court, the two newspapers reported.

``The current plan before the court does not allow time for fair and competitive bids on the assets,'' Continental spokesman Ned Walker told the Chronicle. ``Clearly American Airlines is trying to steal TWA.''

Walker emphasized that Continental's alternative would preserve competition in the airline industry. The offer would allow TWA to get needed capital for its operations and allow the airline to keep flying as an independent carrier.

Continental is interested in landing and take-off rights that TWA holds at JFK and La Guardia in New York; Reagan National in Washington; and Chicago O'Hare â€” assets that at the moment primarily aren't being used by TWA.

Continental also would be willing to enter into an agreement with TWA, which would allow TWA to sell tickets on Continental flights and let TWA passengers earn Continental frequent-flier miles.

The Times said Northwest, based in Eagan, Minn., also objected to American's plans in a separate filing and said it was willing to pay cash for TWA's 26 percent stake in Worldspan, a computer reservation system.

When American unveiled its deal with TWA, it also said it has reached an agreement to buy certain assets that are to be spun off as part of a pending merger between United Airlines and US Airways.

When United announced its deal to buy US Airways in May, some industry watchers predicted it would spur further industry consolidation. American's deals are considered its response to United's move.

Julia Bishop-Cross, TWA spokeswoman, said Wednesday, ``We haven't had a chance to look at the motions that were filed. But we still believe that the plan with American offers the best global solution.''