Group That Includes Russian Firm Proposes TWA Alliance

An investor group that includes a Russian airline proposed an alliance to shore up struggling Trans World Airlines Inc., a spokesman for the investors said Thursday.

The group, led by investor Brian Freeman, includes Russian carrier Aozt Transaero, said Alex Dubitsky, a spokesman for Brian M. Freeman Enterprises in Millburn, N.J. He declined to discuss the details.

Transaero’s vice chairman, Grigory Gurtovoi, told USA Today that investors made a preliminary offer to TWA’s board on Tuesday. He said that the initial reaction was positive and that the final terms of the bid will be ready next month.

Transaero wants to form a partnership with TWA and use it as a U.S. feeder to help it build international traffic. Transaero would be most likely sell seats on TWA’s international flights, analysts said.

John McDonald, a spokesman for St. Louis-based TWA--the seventh-largest U.S. airline--said the report is speculation and that he would not comment.

The report set off heavy trading in TWA stock. Shares rose $1 before retreating to gain only 31.25 cents to $6.44 on the American Stock Exchange.

Transaero, Russia’s second-largest international airline behind Aeroflot, said only that it is open to the idea.

“It would be theoretically interesting to take over TWA, but we don’t have the time or strength for aggressive acquisitions,� said Natalia Aleksashena, a spokeswoman for Transaero. “In principle, we are open to cooperation.�

U.S. law limits foreign investment in U.S.-based airlines to no more than 25% of equity. TWA emerged from Chapter 11 bankruptcy protection in August 1995. Its financial turnaround began suffering last July after one of its jetliners crashed off the coast of Long Island. Its chief executive resigned under pressure in October, and the airline is searching for a new leader.