DALLAS -- As its major airline prepares emerge from bankruptcy, Lambert-St. Louis International Airport officials say they may be ready to begin a $1.5 billion bond-financed expansion by late 1993.

Donald Aubuchon, finance director at the St. Louis airport, said that the wait for Federal Aviation Administration approval of the planned expansion has been a major factor in delaying the project. The January 1992 bankruptcy filling of Trans World Airlines was an added burden, he said.

"It will probably be the latter part of 1993 before we can start implementing the plan," he said. "The bankruptcy didn't help any, but it didn't delay our plans."

He said the FAA should make a final decision on expansion plans by mid-1993, adding that a first sale of $1.5 billion in revenue bonds could take place late next year.

Even though Lambert officials said the TWA bankruptcy has not affected expansion plans, Aubuchon said they are pleased the airline is ready to emerge from Chapter 11 because of its strong contribution to the airport.

The airline operates its largest hub out of St. Louis, accounting for half the airport's monthly revenues and up to 80% of its traffic under agreements that prevent other carriers from expanding at Lambert.

TWA Chairman Carl Icahn originally predicted the carrier would emerge from Chapter 11 protection by summer, but the airline has been locked in tough negotiations with the federal Pension Benefit Guaranty Corp. over a $1 billion pension liability.

The agreement announced by TWA this week includes provisions that call for Icahn to guarantee to pay up to $240 million of the liability if the airline fails. In addition, he will relinquish control of the carrier and provide cash and other assets for the reorganized company.

While airline analysts say long-term prospects for the carrier are still murky, St. Louis officials were pleased the plan would allow a stronger, more competitive TWA to emerge early next year.

Aubuchon said that TWA recently scaled back its operations in St. Louis, but is expected to return to previous traffic levels by late next year.

"The best feeling we have for TWA is that they will begin a gradual build-up by the summer of 1993," he said.

Even though the airport's largest carrier has curtailed flights out of Lambert, overall usage has risen. "Our traffic is actually up because the other carriers have picked up the traffic," Aubuchon said.

Analysts said the trend of other carriers picking up traffic demonstrates a strength of the airport, which has strong local demand for air travel known as origination and destination traffic.

"We've always recognized that the [origination and destination] traffic in St. Louis is quite strong," said Steven Bocamazo, assistant vice president at Moody's Investors Service. "People have a reason to fly there other than to change planes on TWA."

Because TWA controls all but eight of the 80 gates at Lambert mostly through exclusive use agreements, St. Louis officials cannot rent unused terminal space to other airlines without TWA's approval. Under plans to expand the terminal to 119 gates, none of the new space would be leased under such terms.

St. Louis plans to build a new runway, double parking spaces, and increase the terminal size. The move is expected to increase capacity at Lambert by one-third and to reduce operational delays to airlines by the same margin.

To do so, the airport would buy out an estimated 900 residential homes and 25 businesses in Bridgeton, Mo., where the airport is actually located.

In November 1991, St. Louis voters approved the issuance of $1.5 billion in general airport revenue bonds to pay for the work in the first major airport capital program since 1968. With federal grants, the cost of the expansion is expected to total $1.8 billion.

A final reorganization for the airline could also mean an overdue cash payment to Lambert. Before TWA can emerge from bankruptcy, it must resolve $5.2 million in past rents and fees it owed before seeking Chapter 11 protection.

Despite the delinquency, Aubuchon said the bankruptcy did not affect debt service on the airport's $240 million in outstanding debt. Those bonds are rated triple-A because of bond insurance from Financial Guaranty Insurance Co. and AMBAC Indemnity Corp. The airport has no current stand-alone bond rating.

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