LV travel firm sues TWA

Tuesday, May 4, 1999 | 10:29 a.m.

A Carl Icahn company that plans to offer discount travel deals on the Internet is suing TWA, with which it has a contract for plane tickets.

A suit filed on Monday in Clark County District Court says St. Louis-based Trans World Airlines Inc. is attempting to undermine the initial public offering of Lowestfare.com Inc. by reneging on an earlier agreement allowing the company to sell tickets on TWA flights at a discount.

TWA filed a notice of default on the agreement on Friday.

Lowestfare.com Inc., which is based in Las Vegas, announced plans earlier this year to go public. The new company is being developed by Global Discount Travel Services, whose majority owner, Icahn, also controls the Stratosphere hotel-casino and Arizona Charlie's hotel-casino, both in Las Vegas.

Icahn formerly was chief executive officer of TWA.

Global and Lowestfare.com are plaintiffs in the suit that seeks more than $10,000 in compensatory and punitive damages and accuses TWA of interfering with the initial public offering.

The suit also seeks judgments that Global has not breached its ticket agreement with TWA and that travel agents with which Global contracts can issue tickets to any user.

A spokesman for TWA said today that airline representatives had not seen the suit and could not comment on it.

The suit says Icahn negotiated a 45 percent discount on seats on TWA as part of a bankruptcy settlement agreement. TWA filed for bankruptcy in 1992 and Icahn was an investor.

Through Global, Icahn planned to buy seats, then resell them at a profit on the Internet through Lowestfare.com. He also planned to package Las Vegas vacation packages with TWA tickets and stays at the Stratosphere.

The suit says TWA attempted to thwart Icahn by claiming that Global could sell discounted TWA tickets only to "corporate accounts." In May 1998, a Missouri court rejected TWA's claims, the suit says, and Icahn proceeded with his plans to sell tickets to leisure travelers.

TWA also has complained that Global has violated terms of their agreement by disclosing that TWA is the airline on which travelers are ticketed. Global's advertisements can't name the carrier and ads refer to a "major carrier" for air transportation. Global has disclosed the name when asked by customers.

Global says TWA also is undermining Lowestfare.com's public offering by claiming that Global has acted improperly in its calculating taxes on the discounted tickets. At one point, TWA and Global sought a ruling from the Internal Revenue Service on the treatment of those taxes, the suit says.

Icahn