A Dark Horse in the Race for TWA

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There's some competition left in the airline industry after all.

A mysterious new company of aviation experts and investors that calls itself Jet Acquisitions Group entered the TWA sweepstakes Wednesday, making a $6 billion offer for the carcass of the going-bankrupt airline that nearly doubles the offer made last month by American Airlines.

Who are these guys? "I can't give you the specifics," said Michelle Tuchman, a spokeswoman for the company. "It's fair to say that some of them are former airline executives and general investors." Tuchman did assure reporters that Carl Icahn, the billionaire financier who used to own TWA, was not among them. But whoever they are, they've got a mission: to keep TWA flying.

"Our group is adamant that TWA should be preserved as an independent and financially viable airline," said another spokesman for the group, Stanford E. Lerch. "Our bid is more than twice the size of the nearest offer for TWA that was previously made by American Airlines."

JAG's bid should be music to Congress' ears. In Senate Judiciary Committee hearings that began Wednesday, many senators are favoring some takeover of TWA, even by American, because of the thousands of jobs at stake, particularly at the dying airline's St. Louis hub.

Skeptical senators

But the senators are also getting very worried about the pace of consolidation in the industry. If American and United Airlines' multifaceted, one-giant-washes-the-other deal — in which American buys TWA and some of DCAir and United buys most of USAir — goes through, the two carriers would share half the U.S. sky among them. And that prospect has Continental and Delta itching for a merger of their own — one, those companies say, they'd make out of necessity but not desire.

New York senator Charles Schumer — "How in God's good name can having three airlines increase competition?" — wants a nine-month freeze on all the deals except American's TWA takeover, which heartland pols are intent on, so that the feds can study what effect the Big Three scenario would have on pricing. Vermonter Pat Leahy worried that "the industry will be one work stoppage away from closing down one fourth to one third of America's air system."

Would selling TWA to JAG instead of AA help matters? The problem with diversity in the airline business, some experts say, is that there's a reason why TWA went out of business in the first place. David Stempler, president of the Air Travelers Association, told the senators that the carrier, solvent or not, would be unlikely to survive on its own.

"There have been previous attempts from groups to acquire airlines and maintain them individually that never panned out," he said, indicating that before long, the unnamed entrepreneurs at Jet Acquisitions Group would find themselves in the same state as TWA does now — squeezed out and flat broke.

Unless they're just American Airlines guys in fake beards and sunglasses.