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Friday, October 26, 1990 - Page updated at 12:00 AM

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Icahn Wants Piece Of Eastern Airlines

Fort Lauderdale News And Sun-Sentinel

FORT LAUDERDALE, Fla. - TWA Chairman Carl Icahn has submitted an offer to buy Eastern Airlines' Atlanta hub and its maintenance base in Miami, according to an aviation analyst and published reports.

Icahn told The Kansas City Star that his offer includes more than 50 gates in Atlanta. The financier, who has accumulated more than $1 billion in cash, would not say what he would pay for the assets.

Paul Turk, an analyst at Avmark Inc., an Arlington, Va., consulting firm, said Icahn made the offer to Eastern's creditors on Wednesday.

``I have to think they'd merge it into TWA,'' Turk said.

The merger of Eastern and TWA has been floated several times in recent years, usually with the help of Eastern's labor unions. But the deal has never come together.

This time, however, the industry is in chaos because of higher fuel prices and a slumping economy. Eastern is losing $1.5 million to $3 million a day, analysts say.

Eastern trustee Martin Shugrue would be hard-pressed to pass up a reasonable offer from TWA, Turk said.

``Shugrue's got the creditors really looking over his shoulder,'' Turk said. ``The creditors are not going to carry them along much further.''

Eastern has been shielded from creditors under the bankruptcy laws since April 1989.

Karen Ceremsak, an Eastern spokeswoman, said talks have been held with Icahn, but there is no timetable for a decision. ``I think this is an ongoing process,'' she said.

TWA last looked at buying Eastern in April, shortly before Shugrue was named trustee by U.S. Bankruptcy Judge Burton Lifland. Since then, Icahn has announced his intention to sell or merge TWA.

Turk said that after years of losses and facing an increasingly dour outlook for airline profits, Eastern may not have much interest in remaining independent.

``Eastern is beaten down enough as an entity that there probably would be less resistance than you would expect to an effort to buy it out,'' he said.

Copyright (c) 1990 Seattle Times Company, All Rights Reserved.

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