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Travellers International, AG v. Trans World Airlines, Inc.

United States District Court for the Southern District of New York
722 F.Supp. 1087 (1989)


Facts

Travellers International, AG (Travellers) (plaintiff), offered international vacation tours. It contracted with Trans World Airlines, Inc. (TWA) (defendant), an international airline, to provide European vacation packages that TWA marketed as “Getaway Tours.” Under the contract, Travellers designed each year’s Getaway Tours, created marketing brochures for TWA’s use, and operated the tours. TWA sold the Getaway Tours and provided the air transportation to the tours. The price of Getaway Tours was comprised of the cost of airfare plus the cost of the land tour. TWA was compensated for the airfares in full and received a percentage of the tours’ retail price. In 1984, after nearly 15 years of partnership, Travellers and TWA entered into a contract requiring Travellers to produce at least 100,000 brochures and, as in the past, develop and conduct tours. This contract’s terms commenced in 1986 and extended through the end of 1991. TWA changed owners in 1985, as did Travellers in 1986. The long-standing relationship between the two companies soured under their new ownerships. TWA renegotiated its percentage profit from Getaway Tours and reduced the price and number of brochures that it received from Travellers. Just three months later, TWA terminated its contract with Travellers. Travellers sued TWA seeking a permanent injunction requiring TWA’s specific performance of the 1984 contract. At trial, Travellers provided evidence that 90 to 95 percent of its business came from its contract with TWA. Additionally, the parties provided evidence that performance of the contract would be profitable for TWA.

Rule of Law

Issue

Holding and Reasoning (Ward, J.)

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