Icahn to outline plan for National Airlines
Wednesday, May 30, 2001 | 11:02 a.m.
A representative of financier Carl Icahn is expected to attend a hearing in U.S. Bankruptcy Court in Las Vegas Thursday to outline a proposal in which Icahn would gain a stake in Las Vegas-based National Airlines.
Sources familiar with the case said Icahn could produce a proposal to finance National, which has been operating under Chapter 11 bankruptcy protection since December.
Icahn, who owns three casino properties in Las Vegas and an Internet ticket sales company, Lowestfare.com, has said he is interested in buying or developing an airline following his failed bid to acquire TWA earlier this year.
Icahn, a former chairman of TWA, had a deal with the airline to offer discounted tickets to passengers who booked through Lowestfare.com. But he failed to outbid AMR Corp., owner of American Airlines, to acquire TWA.
American is taking over TWA's assets, setting the stage for Icahn to look elsewhere for a source of airline seats.
National was speculated as a potential target for Icahn after it filed for bankruptcy protection, citing high fuel prices for its financial woes. The airline also had been operating with passenger loads below industry averages.
National, which operates a fleet of 16 twin-engine Boeing 757 jets, operates about 64 flights a day to 11 destinations. Because McCarran International Airport is National's hub, every flight either leaves from or arrives at Las Vegas, making it the fifth largest McCarran carrier by number of passengers served.
Officials with Icahn's companies could not be reached for comment to confirm an appearance in the court hearing to be conducted by Judge Linda Riegle.
National spokesman Dik Shimizu said the company was unaware of any presentation by Icahn, but that it is within his rights to do so.
"If it happens, we'll find out about it tomorrow," Shimizu said.
Icahn and National's chairman and chief executive officer, Mike Conway, have been in the aviation industry for years and are acquainted with each other, but neither has confirmed talking about whether Icahn and National have a future together.
Sam Buttrick, an airline analyst with UBS Warburg, said because National needs capital to continue operations and Icahn has the means to supply it, he wouldn't be surprised if Icahn entered the picture. He added that he has received no indication that a deal is in the works, but that the continuation of National flying is critical to Las Vegas' economic health.
About half of the city's visitors arrive by air.
Another analyst who follows the aviation industry, Mike Boyd of the Evergreen, Colo.-based Boyd Group, said Icahn's track record would suggest that he is seriously looking at his options with National.
"It may be just exploratory," Boyd said. "But it's not surprising that Carl Icahn would be circling around anything that's wounded or dying."
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