Texas Air Corporation

From Wikipedia, the free encyclopedia
Texas Air Corporation had its headquarters in the America Tower in the American General Center

Texas Air Corporation, also known as Texas Air, was an airline holding company, incorporated in June 1980 by airline investor Frank Lorenzo to hold and invest in airlines. The company had its headquarters in the America Tower in the American General Center in Neartown Houston, Texas.

The company initially acted as a holding company for Texas International Airlines, which Lorenzo owned through his investment firm Jet Capital.[1] Shortly after its formation, Texas Air founded New York Air, a low-cost carrier in the US Northeast.[2] In 1981, Texas Air acquired Continental Airlines through a hostile takeover bid,[3] and subsequently merged Continental with Texas International, retaining the Continental brand.[4] In 1986, Texas Air acquired both Eastern Airlines[5] and People Express Airlines, including the assets of People Express's bankrupt subsidiary, Frontier Airlines.[6] In 1987, Texas Air consolidated its airline holdings by merging Frontier, New York Air and People Express into Continental, in turn making the latter the third largest airline in the US,[7] and leaving Texas Air with two mainline carriers: Continental and Eastern, as well a number of commuter airlines.

Texas Air was famous for its tough stance against organised labor groups, and usage of union-busting tactics to lower labor costs within its subsidiaries.[8][9] In September 1983, Texas Air pushed Continental into bankruptcy, despite it being a solvent and financially stable company, stating that its high labor costs prevented it from effectively competing with non-union startup carriers.[10] The bankruptcy filing allowed Texas Air to fire 8,000 Continental employees, and subsequently rehire a small portion of them on non-union contracts at lower wage rates.[11][12] With lower labor costs, Texas Air successfully restructured Continental as a low-fare carrier, and allowed it to exit bankruptcy in 1986.[13] In the same year, the company began a four-year battle with the International Association of Machinists in an attempt to lower labor costs at Eastern.[14] In March 1989, Texas Air locked out Eastern's mechanics, which resulted in the majority of Eastern employees walking out on strike,[15][16] forcing the airline into bankruptcy.[17] In 1990, Eastern's bankruptcy judge ordered the removal of Texas Air's control of the carrier, citing deliberate mismanagement and unsafe business tactics.[18]

At its peak in 1986, Texas Air was the second largest airline in the world, behind the USSR's state carrier Aeroflot, and the largest airline in the United States, with control of 20% of the US domestic air travel market, a fleet of 600 aircraft, and an $8.5 billion valuation. However, by 1989, the company had $5.4 billion worth of debt,[19] and lost a total of $2 billion in just two years, breaking the record in both 1988 and 1989 for the largest losses ever reported by a US airline.[20] Following the loss of Eastern, in 1990 Texas Air merged itself with Continental, and in August of the same year, Lorenzo agreed to leave the company after selling his remaining shares to SAS.[21] However, the company was never able to recover from its significant debts and poor reputation, and entered bankruptcy in December.[22]

Holdings[]

1 Merged with Texas International Airlines, keeping the Continental brand.

2 Merged into Continental Airlines.

3 Merged into Britt Airways, which subsequently assumed the ExpressJet brand.

4 Rebranded as Continental Micronesia.

5 Declared bankruptcy and liquidated.

See also[]

References[]

  1. ^ Reckert, Clare M. (1972-08-26). "Jet Capital Gets Control of Texas International in $35‐Million Deal". The New York Times. ISSN 0362-4331. Retrieved 2021-09-09.
  2. ^ Pace, Eric (1980-09-09). "New York Air's Cut-Rate Shuttle; Fare $29 to $49 For New York To Washington Confidence Expressed Cut-Rate Fare Planned On New Airline Shuttle No Accord On Slots". The New York Times. ISSN 0362-4331. Retrieved 2021-09-09.
  3. ^ Witkin, Richard (1981-03-03). "C.A.B. BACKS TEXAS AIR ON ITS BID FOR CONTINENTAL". The New York Times. ISSN 0362-4331. Retrieved 2021-09-09.
  4. ^ "Continental, TI Airlines to Finish Merger Oct. 31". Oklahoman.com. 1982-10-07. Retrieved 2021-09-09.
  5. ^ Nash, Nathaniel C. (1986-09-19). "COMPANY NEWS; TEXAS AIR'S EASTERN BID APPROVED". The New York Times. ISSN 0362-4331. Retrieved 2021-09-09.
  6. ^ Salpukas, Agis (1986-09-16). "TEXAS AIR BUYING PEOPLE EXPRESS FOR $125 MILLION". The New York Times. ISSN 0362-4331. Retrieved 2021-09-09.
  7. ^ People Express - Continental Merger - WKBW, retrieved 2021-09-09
  8. ^ Salpukas, Agis (1984-12-30). "CONTINENTAL'S CHIEF: FRANK LORENZO; A TURNAROUND ARTIST FOR AN AILING AIRLINE". The New York Times. ISSN 0362-4331. Retrieved 2021-09-09.
  9. ^ Passell, Peter (1989-05-10). "Economic Scene; Frank Lorenzo Strikes Back". The New York Times. ISSN 0362-4331. Retrieved 2021-09-09.
  10. ^ "Continental Airlines files for voluntary bankruptcy". Christian Science Monitor. 1983-09-26. ISSN 0882-7729. Retrieved 2021-09-09.
  11. ^ "CONTINENTAL AIR TO KEEP 4,200 ON JOB". The New York Times. 1983-09-26. ISSN 0362-4331. Retrieved 2021-09-09.
  12. ^ Taylor, Stuart J. (1983-09-29). "BANKRUPTCY AND THE UNIONS". The New York Times. ISSN 0362-4331. Retrieved 2021-09-09.
  13. ^ "Continental Airlines". The New York Times. 1986-07-01. ISSN 0362-4331. Retrieved 2021-09-09.
  14. ^ Eichenwald, Kurt (1988-04-01). "COMPANY NEWS; Eastern and Texas Air Sued by Machinists". The New York Times. ISSN 0362-4331. Retrieved 2021-09-09.
  15. ^ "Statement of Eastern Airlines President Phil Bakes With Eastern". AP NEWS. Retrieved 2021-09-09.
  16. ^ McFadden, Robert D. (1989-03-05). "MECHANICS' STRIKE VIRTUALLY SHUTS EASTERN AIRLINES". The New York Times. ISSN 0362-4331. Retrieved 2021-09-09.
  17. ^ "Eastern Files for Bankruptcy, Blames Pilots". Los Angeles Times. 1989-03-10. Retrieved 2021-09-09.
  18. ^ "Judge Appoints Trustee for Eastern Air, Ousts Lorenzo". Los Angeles Times. 1990-04-19. Retrieved 2021-09-09.
  19. ^ Battle for Eastern Airlines Part 2, retrieved 2021-09-10
  20. ^ Salpukas, Agis (1990-02-07). "Large Losses Are Reported By Texas Air". The New York Times. ISSN 0362-4331. Retrieved 2021-09-09.
  21. ^ Weiner, Eric (1990-08-10). "Lorenzo, Head of Continental Air, Quits Industry in $30 Million Deal". The New York Times. ISSN 0362-4331. Retrieved 2021-09-09.
  22. ^ Salpukas, Agis (1990-12-04). "CONTINENTAL FILES FOR BANKRUPTCY". The New York Times. ISSN 0362-4331. Retrieved 2021-09-09.

External links[]

Retrieved from ""