We're only eight little days into the new year and now have to get slammed with this incredible news: American Airlines plans on announcing this week its intent to purchase the financially troubled Trans World Airlines in a complex deal that will directly affect the possible United/US Airways merger.  Let's sort through all this mess:

1. TWA plans to file for Chapter 11 bankruptcy protection on Wednesday.  This is the third time it has done so!
2. That same day, American Airlines plans on announcing a deal in which it would purchase TWA (for around $2 billion, depending on the liability value and what article you read) and reportedly save the jobs of its 20,000 employees.

Now comes the sticky part...the news reports have indicated that as soon as American Airlines signs the big check and purchases TWA, they will also pay United about $1.4 billion for roughly 20% of US Airways!  This purchase would include such big ticket items as airplanes, gates and landing slots, along with some of the Boston-New York-Washington shuttle and 49% of a that DC Air startup.  This would give American Airlines about 200 more jets in addition to its inventory of 700.

Pay United?  What's going on here?  Well, do you remember when the Department of Justice moved the United/US Airways merger decision date forward to April 2?  This was to give United (and some of  the other big boys on the playground) more time to revise the terms of their deal(s) to win antitrust approval.  DC Air (49% of which could now be owned by American Airlines under this new possible purchase deal) would have most of the takeoff and landing slots at Washington's Reagan National Airport currently assigned to US Airways.  And that Boston-New York-Washington US Airways shuttle?  American would jointly operate that shuttle with United Airlines---or so it's been reported!

This recent announcement (which Goodwin & Co. probably knew all along) must be music to their ears.  For many months now, United has tried to find a way win federal antitrust approval to purchase US Airways---an airline that includes $7.3 billion in debt.  The Masters of the Universe just hadn't been able to yet come up with the grease to lubricate the DOJ gears.

But make no mistake about it...this deal hasn't been officially announced yet, nor have all the specifics been ironed out.  The specifics of the purchases, the amounts, and the implications all vary depending on which newspaper you read.  I've drawn reports and announcements from Dow Jones, CBS, Associated Press, and other wire services.  But nothing's conclusive, yet...

But should this American-TWA deal and the United/US Airways deal go through, those two companies would control more than half of all U.S. air travel.

You can look at this new deal in one of two ways:

1. It would ease the concerns of the Department of Justice and thus move United much closer to acquiring US Airways.
2. It would nail the coffin shut on both deals, as two giant monopolies (United and American) would be almost as bad to the traveling public as one!

I've got my fingers crossed for #2!  But we'll see how this all plays out later this week.