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Airlines

In 1939, at the urging of Jack Frye, president of Transcontinental & Western Airlines, the predecessor of Trans World Airlines (TWA), Hughes began to quietly purchase a majority share of TWA stock (78% of stock, to be exact); he took a controlling interest in the airline by 1944. Although he never had an official position with TWA, Hughes handpicked the board of directors, which included Noah Dietrich, and often issued orders directly to airline staff. Hughes Tool Co. purchased the first six Stratoliners Boeing manufactured. Hughes used one personally, and he let TWA operate the other five.

Hughes is commonly credited as the driving force behind the Lockheed Constellation airliner, which Hughes and Frye ordered in 1939 as a long-range replacement for TWA's fleet of Boeing 307 Stratoliners. Hughes personally financed TWA's acquisition of 40 Constellations for $18 million, the largest aircraft order in history up to that time. The Constellations were among the highest-performing commercial aircraft of the late 1940s and 1950s and allowed TWA to pioneer nonstop transcontinental service. During World War II Hughes leveraged political connections in Washington to obtain rights for TWA to serve Europe, making it the only U.S. carrier with a combination of domestic and transatlantic routes.

After the announcement of the Boeing 707, Hughes opted to pursue a more advanced jet aircraft for TWA and approached Convair in late 1954. Convair proposed two concepts to Hughes, but Hughes was unable to decide which concept to adopt, and Convair eventually abandoned its initial jet project after the mockups of the 707 and Douglas DC-8 were unveiled. Even after competitors such as United Airlines, American Airlines and Pan American World Airways had placed large orders for the 707, Hughes only placed eight orders for 707s through the Hughes Tool Company and forbade TWA from using the aircraft. After finally beginning to reserve 707 orders in 1956, Hughes embarked on a plan to build his own "superior" jet aircraft for TWA, applied for CAB permission to sell Hughes aircraft to TWA, and began negotiations with the state of Florida to build a manufacturing plant there. However, he abandoned this plan around 1958, and in the interim, negotiated new contracts for 707 and Convair 880 aircraft and engines totaling $400 million.

The financing of TWA's jet orders precipitated the end of Hughes' relationship with Noah Dietrich, and ultimately Hughes' ouster from control of TWA. Hughes did not have enough cash on hand or future cash flow to pay for the orders and did not immediately seek bank financing. Hughes' refusal to heed Dietrich's financing advice led to a major rift between the two by the end of 1956. Hughes believed that Dietrich wished to have Hughes committed as mentally incompetent, although the evidence of this is inconclusive. Dietrich resigned by telephone in May 1957 after repeated requests for stock options, which Hughes refused to grant, and with no further progress on the jet financing. As Hughes' mental state worsened, he ordered various tactics to delay payments to Boeing and Convair; his behavior led TWA's banks to insist that he be removed from management as a condition for further financing.

In 1960, Hughes was ultimately forced out of the management of TWA, although he continued to own 78% of the company. In 1961, TWA filed suit against Hughes Tool Company, claiming that the latter had violated antitrust law by using TWA as a captive market for aircraft trading. The claim was largely dependent upon obtaining testimony from Hughes himself. Hughes went into hiding and refused to testify. A default judgment was issued against Hughes Tool Company for $135 million in 1963 but was overturned by the Supreme Court of the United States in 1973, on the basis that Hughes was immune from prosecution. In 1966, Hughes was forced to sell his TWA shares. The sale of his TWA shares brought Hughes $546,549,771.

Hughes acquired control of Boston-based Northeast Airlines in 1962. However, the airline's lucrative route authority between major northeastern cities and Miami was terminated by a CAB decision around the time of the acquisition, and Hughes sold control of the company to a trustee in 1964. Northeast went on to merge with Delta Air Lines in 1972.

In 1970, Hughes acquired San Francisco-based Air West and renamed it Hughes Airwest. Air West had been formed in 1968 by the merger of Bonanza Air Lines, Pacific Air Lines, and West Coast Airlines, all of which operated in the western U.S. By the late 1970s, Hughes Airwest operated an all-jet fleet of Boeing 727-200, Douglas DC-9-10, and McDonnell Douglas DC-9-30 jetliners serving an extensive route network in the western U.S. with flights to Mexico and western Canada as well. By 1980, the airline's route system reached as far east as Houston (Hobby Airport) and Milwaukee with a total of 42 destinations being served. Hughes Airwest was then acquired by and merged into Republic Airlines (1979–1986) in late 1980. Republic was subsequently acquired by and merged into Northwest Airlines which in turn was ultimately merged into Delta Air Lines in 2008.