The lease, which takes effect in January, is for three years,with a 25-year extension. If within the first three-year term, $110million in revenue bonds can be sold, the lease continues for thenext 25 years. Revenue bonds will be sold to finance capitalimprovements to the aging, large jet maintenance base. They wouldbe repaid through TWA's lease payments and be backed solely by thecompany.

In August, voters approved a bond issue package backing thelong-term TWA lease. Prior to that a six-month extension had beengranted on TWA's lease while city and company officials negotiatedthe new lease. Approximately $50 million of the bonds will gotoward infrastructure improvements, such as roof replacements,electrical system upgrades, asbestos removal and waste watertreatment modernization. The remaining monies will be spent toimprove productivity and efficiency, including equipmentupgrades.

A TWA vice president said that the capital improvments wouldhelp the company be more competitive in bidding for maintenancework from other airlines. TWA has lost money in recent quarters,but would have shown a profit had fuel prices not risen this year,he said. TWA is based in Saint Louis and employs about 2,500 peopleat the Kansas City maintenance facility, which was built in1954.

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.