Icahn said he believes the airline industry is in for a wave of mergers that will leave about a half-dozen major competitors. "Philosophically, I believe very strongly that this company must consolidate."
Icahn said TWA had pre-tax earnings of between $25 million and $30 million in July, and that "August will be better." Both months are part of the peak vacation-travel period.
He declined to estimate the size of the expected third-quarter profit, but said, "We can see the light at the end of the tunnel."
Icahn told the stockholders that he has tried to turn TWA around by cutting labor costs, ridding the company of unproductive management, reorganizing routes and selling a portion of its computerized reservation system to Northwest Airlines.
Icahn, who acquired control of the carrier early this year, said TWA's overseas bookings were recovering after a severe slide that was aggravated by travelers' fears of foreign terrorism.
The slump in overseas travel, together with a nine-week strike by TWA's unionized flight attendants this spring and continued fare wars in the United States, contributed to a $256 million loss for TWA in the first half of this year. That deficit followed a $193.1 million loss in 1985.
"Terrorism cost us hundreds and hundreds of millions" of dollars, Icahn said.
However, TWA vice chairman D. Joseph Corr said the airline's load factor on European routes, or the percentage of available seats filled, had climbed in July to about 79 percent from the 30-percent range after the hijacking of a TWA jetliner between Athens and Rome last summer.
The last time TWA earned a quarterly profit was in the second quarter of 1985, when it earned $18.2 million or 35 cents a share.
