Even Icahn Gets The Blues

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THE MERE MENTION OF THE NAME OF FINANCIER Carl Icahn once sent chills through corporate boardrooms. That was before he got into the airline business. After seven long years of trying to make a go of TWA, Icahn has announced that he is giving up. As part of a reorganization plan that should enable the battered carrier to emerge from Chapter 11 bankruptcy protection early next year, Icahn agreed to provide $615 million in cash, loans and pension-fund guarantees. The deal will put the shrunken carrier on sounder financial footing, though it remains to be seen whether TWA can survive the dogfights still pounding larger and stronger carriers.

Northwest, for example, barely averted a Chapter 11 crash landing by securing $2.2 billion in new financing and cancellation or delay of a whopping $6.2 billion in orders for new aircraft. And just a week after industry leader American Airlines was forced to let go 576 of its managers, Delta chairman Ronald Allen conceded that layoffs and pay cuts may be necessary at his carrier too. Perhaps the most dramatic evidence of the industry's deepening distress is TWA's decision in effect to call in the cavalry. Chrysler chairman Lee Iacocca, who will retire at the end of this month from the company he once saved, is considering taking on the resurrection of TWA as his next big challenge.