TWA LLC

After the sale of their London routes to American in 1991, TWA filed a "pre-packaged" bankruptcy filing as a way of turning around financially. It didn't work. They declared bankruptcy for a second time in 1994, and Carl Icahn finally divested of his ownership stake, selling it to employees, but at a very high price. As part of the restructuring, Icahn assumed liability for TWA's pensions, and in exchange, TWA agreed to sell him an unlimited number of tickets at a 30% discount. The agreement, known as Karibu, allowed Icahn to sell as many tickets as he wanted to on TWA, and for less than what TWA was able to sell them for to the general public.

Free of Icahn, TWA launched on an aggressive fleet renewal program, leasing many new MD80 and B757 aircraft, and becoming a launch customer for the B717. They also grounded their aging L1011 and 747 fleets, pulled out of several unprofitable European routes, and added new markets in the Caribbean and Mexico. However, despite having less than industry leading pay, TWA's operating costs were still too high, and due to the Karibu agreement, they were unable to maximize revenue to the degree that other carriers were able to.

By December 2000, TWA president William Compton was running out of survival options for the carrier. After two bankruptcy filings, there were no more assets left to leverage. Finding a merger partner had been unsuccessful, and few investors other than Carl Icahn were willing to pour any cash into the company. Faced with liquidation, Bill Compton called Don Carty one last time.

In January, TWA filed for bankruptcy for the third and final time, and American announced that they had come to an agreement to purchase TWA's remaining assets, and would offer employment to most of TWA's employees. During the months that followed, several competing bids were rumored, but AA's bid was accepted by both the TWA board and on April 9, the court approved the acquisition.

American had committed to offering employment to all of TWA's employees, but following the September 11th attacks on the World Trade Center and Pentagon, it was clear that this was no longer a viable option. Schedules at both carriers were reduced by 15 to 20%, and layoffs were announced. TW's JFK operation was shut down on October 1, with all JFK based employees being furloughed. TW's DC9 fleet, planned for retirement in 2002, was sent to the California desert in late October, and a number of other aircraft, including several new Boeing 717s, were also grounded.

On December 1, 2001, Captain Compton piloted the final TWA flight to depart, an MD80 from MCI to STL. TWA's signage was taken down at some 90 airports overnight, and TWA's callsign disappeared from schedules and ATC frequencies. The next day, TWA's operations were officially merged into American's, and TWA employees started wearing AA uniforms. During the months following, the TWA livery was eliminated from aircraft, and replaced with AA's polished metal and trademark stripes.