TWA
The Airmail Act of 1930 changed
the way small air carries would carry out their business
functions. The Airmail Act of 1930, created a new method on
which the United States Postal Service awarded postal
contracts. The act eliminating competitive bidding. The Act
created a payment structure based on the weight of the load
carried by the aircraft per mile rather than a flat rate per
mile regardless of the weight of the load. Contracts were
awarded based on aircraft payload. Companies that had large
aircraft were more likely to be awarded contracts rather
than those companies with smaller aircraft. This Act
encouraged airline carriers to purchase large aircraft and
in many cases brought about the merger of smaller air
carriers. TWA was one of many air carriers that came about
result of the Airmail Act of 1930. In 1930, Western Air
Express and Transcontinental Air Transport were merged to
form the air carrier T&WA.
By the mid
1930's, TWA was providing cargo and passenger service from
coast to cost in the DC-3 aircraft in under 36 hours. Many
of these aircraft had sleeper berths install for added
passenger comfort. TWA had also added flight attendants "air
hostesses". This a result of the success that the Boeing Air
Transport company (BAT) had on their flights with flight
attendants. Originally, these flight attendants or
stewardesses were nurses by profession, these nurses were
paid by the air carrier to assist passengers on their
flights with any medical needs that they may have such as
air sickness. These nurse would as well comfort passengers
by handing out blankets, pillows, etc. This was an added
feature that significantly increased TWA's mark share in air
passenger service.
By 1939,
Howard Hughes had acquired controlling interest in TWA. That
is 75 percent or over 80 million dollars. TWA's growth began
to grow significantly due to the popularity of Howard
Hughes. Because of Howard Hughes influence, TWA was in a
position to obtain the better international and domestic air
routes. TWA's postwar growth was primarily due to Howard
Hughes control over the carrier.
However, by
the mid 1950's TWA began to run into financial difficulties
with its creditors as a result of Hughes purchasing aircraft
that TWA could not afford to pay for. Hughes in his attempt
to being TWA into the jet age had purchased over 130 Boeing
707 aircraft at a sum of 300 million dollars. This would
have been a financial disaster for most air carriers for
that time. Stockholder became very concerned, attempts by
stockholders and management to reason with Hughes failed.
Stockholder's had filed lawsuits against Hughes for
mismanagement of TWA.
In 1961,
TWA's stockholders won a victory through a court decision.
Hughes was ordered to pay TWA 137 million dollars for
damages. In a battle to gain control, TWA was back in court
and in 1965, the court ordered Hughes to sell his shares of
TWA. Hughes was paid over 500 million dollars his shares in
TWA. By the end of 1967, TWA was the first United States air
carrier to become an all jet air carrier.
By the Late
1980's, TWA was providing transpacific and round the world
air services, initiated non-smoking sections in every
aircraft in their fleet, introduced the 767 and the L-1011
into their fleet, acquires Ozark Airlines and had gone from
a private air carrier to a public carrier in 1983. However,
with the slump in the economy, airfare wars and the unwanted
hostile takeovers, TWA in an emergency stockholders meeting
in 1988 voted to go private.
By the mid
1980's airlines were having great difficulty in keeping
their doors open. Many airline carriers had to continued
with airfare wars by non-union air carriers such as People
Express. This further erosion threaten TWA's ability to
remain viable. With the takeovers of Eastern Airlines,
People Express, Continental, New York Air, etc. by tycoon
Frank Lorenzo, owner of Texas Airlines prompt TWA to take
swift action to ward off a possible takeover.