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About The Battalion. (College Station, Tex.) 1893-current | View Entire Issue (Dec. 4, 1990)
3 State and local Tuesday, December 4, 1990 The Battalion n nd deni- ety. ilizethe, rights, Dands. d in movies >, is unfe ortrayai; i ethat option c r societ, :e up to ms of won't r really f »r ue siPEtn (Parent company of Continental files for Chapter 11 I HOUSTON (AP) — Continental * Airlines Holdings Inc., the remnants lof Frank Lorenzo’s Texas Air Corp. I empire, Filed Monday for protection ■ from creditors, saying it was over- 1 whelmed by its heavy debt load and [surging fuel prices. The company, parent of Conti- [nental Airlines Inc., Filed its Chapter [ll bankruptcy petition in Wilming- |ton, Del., where it is incorporated. [The Filing is the second time in seven [years Continental has sought to re- [ organize. In 1983, as Lorenzo was building [Texas Air into the nation’s largest [airline holding company, Continen- [tal Filed for bankruptcy protection [amid a bitter labor dispute with the [airline’s union. The Filing allowed Continental to [scrap union contracts and hire low- | cost replacements for striking work- | ers. It also led to a change in federal | bankruptcy law to make such a move | more difFicult. Texas Air eventually grew to in- I elude Eastern Airlines Inc., but lost [ that carrier when a bankruptcy court [judge replaced Lorenzo with a I trustee. Eastern too had Hied for I Chapter 11 after a labor dispute. Monday’s move by the nation’s I fifth largest airline underscores the I financial beating taken by all airlines I because of a weakening economy I and sluggish demand in air travel. “It became more difficult for us to I raise money as we were trying to do I before the fuel crisis hit us,” Conti- I nental chief Hollis Harris said at a [ news conference in Wilmington. I “Being highly leveraged ... we could I not handle the debt and the fuel I costs at the same time.” As part of the Filing, the Houston- I based carrier said it has agreed to I sell its Seattle-Tacoma to Tokyo I route to American Airlines Inc. for Lorenzo warns troubles could increase air fares MIKE C. MULVEY/The Battalion Continental Airlines passengers discuss their travel plans at Easterwood Airport. $150 million, pending approval of the bankruptcy court. The route sale is expected to be concluded at the end of 1991, but $ 140 million of the sale price is expected to be advanced to Continental before the deal closes. As part of the decision to sell the Seattle-Tokyo route, Continental withdrew its other international routes from the market. Last month, Continental put those routes up for sale instead of seeking bankruptcy protection. Continental owes about $2.2 bil lion in outstanding debt, about $1.7 billion of which is secured. It also has nearly $4 billion in aircraft operat ing losses. “Continental made these decisions reluctantly,” Harris said. “We were making good progress. Revenues were up over 1989 and debt was be ing serviced until problems in the Middle East placed the world econ omy at risk.” Continental lost $88.3 million in the third quarter of this year, com pared to a loss of $158 million in 1989. For the first nine months, losses totaled $97 million, compared with a $522.8 million loss last year. HOUSTON (AP) — Frank Lo renzo no longer may be in charge at Continental Airlines, but the carrier he shaped into a leading force in the industry is following a road he trav eled in the early 1980s when Conti nental filed for protection under federal bankruptcy laws. In August, the 50-year-old entre preneur who came to symbolize a tu multuous decade of airline deregu lation announced he was selling off most of his stake in Continental to Scandinavian Airlines System. He also resigned as chairman and chief executive at Continental to be replaced by Hollis Harris, a re spected manager lured to Continen tal after serving as president of rival Delta Air Lines Inc. Just two weeks ago, in his first public remarks since departing Con tinental, Lorenzo warned that the troubles in the airline industry could leave just three or four major air lines within three years. “And if you don’t like air fares to day ... just hold on to your hats — you may not have seen anything yet in terms of air fare price increases,” he said. He also likened the perilous fi nancial situation of the airlines to 11 p.m. Under that comparison, Monday was midnight of sorts for Continen tal; seven years and 10 weeks after Lorenzo took the carrier into bank ruptcy court in Houston, Continen tal returned to the protection of the court, this time in Delaware. During his years with the airline, Governor announces more National Guard personnel put on alert AUSTIN (AP) — About 220 Texas Army National Guard per sonnel of Company G, 149th Avi ation in Grand Prairie have been alerted for possible mobilization to support military operations in the ' Persian Gulf, Gov. Bill Clements said. The helicopter unit was placed on alert during the weekend, Clements announced Monday. No date has been set for the unit to be called up. The mission of Company G, 149th Aviation is to provide air transport of personnel and cargo for combat support operations. The unit’s basic item of equipment is the CH-47D helicopter. About 820 guardsmen of the 3rd Battalion, 141 Infantry, will mobilize on Friday and move to their mobili zation station at Fort Hood a few days later. The combat infantry battalion is located in the Lower Rio Grande Valley with headquarters in McAl len. Some 320 members of the Texas Guard’s 217th Evacuation Hospital in San Antonio remain on an alert status. They were notified of their possi ble mobilization on Nov. 23. UT students killed in auto wreck Saturday AUSTIN (AP) — Three Univer sity of Texas engineering students died and three of their close friends were injured when a movie-going expedition turned into tragedy. The study group members set out in a small sedan to go to a movie shortly after midnight Saturday. Twenty minutes later, rescue work ers were hovering around their crushed vehicle on Interstate 35 near downtown Austin. Rescuers said it was a miracle that anyone survived. “It was the worst I have seen in my two years here,” said Sally Muir, See UT/Page 5 Man sought by police for felony DWI offense Brazos County Crime Stoppers is asking for information about the whereabouts of Vicente D. Herrera, wanted by the Brazos County Sher- ifFs Department For felony driving while intoxicated and bond forfeit ure. Herrera, 34, is a Hispanic male, 5 feet 4 inches tall and about 132 pounds. He has black hair and brown eyes. Herrera also has a scar on his left cheek and is missing a finger on on his left hand. The Brazos County SherifFs De partment and Crime Stoppers need help this week to locate Herrera. If you have information that could be helpful, call Crime Stop pers at 775-TIPS. Continental rose to become the na tion’s largest carrier, climaxing a business growth that began in 1966 when Lorenzo and Harvard Univer sity classmate Robert Carney formed a financial advisory firm. But even before that, in 1963, Lo renzo’s first professional job was in the industry, when he was hired by Trans World Airlines as a financial analyst. Within two years, he was manager of the Financial analysis de partment at Eastern. In 1968, the Lorenzo-Carney duo created Jet Capital Corp., which bought a controlling interest in Texas International Airlines in 1972. Lorenzo, then 32, a Harvard MBA and son of Spanish immi grants from Queens, N.Y., was the carrier’s youngest president. In 1981, Lorenzo merged Texas International with Continental after a bitter takeover battle. His image as a union buster began when he fought organized labor at Continen tal and won. The image grew in 1983 when he put Continental, then the nation’s eighth-largest airline, under bank ruptcy protection, scrapped labor contracts and hired strike replace ments at lower pay. Lorenzo subsequently acquired New York Air, People Express and Frontier airlines, which were merged into Continental. He didn’t face another labor fight until he acquired Eastern in 1986, where his relationship with unions was acrimonious and a strike against the airline made him the target of union members’ hatred. Using billions of dollars in bor rowed money and cheap fares, Con tinental and Eastern, once high-cost airlines, helped Lorenzo’s Texas Air Corp. become the nation’s largest airline operator, capturing about 20 percent of the domestic market. STOPPER , i m 773-TIPS When you call, Crime Stoppers will assign you a special coded num ber to protect your identity. If your call leads to an arrest and grand jury indictment, Crime Stoppers will pay you $250 in cash. Crime Stoppers also pays up to 1 $1,000 cash for information on any felony crime or the location of any wanted fugitive. Correction A story in Friday’s issue of The Battalion incorrectly stated Texas Marine Platoon members and members in the Corps of Cadets’ Squadron 7 ran the game ball to Austin together. The Texas Marine Platoon, an active-duty Marine unit, ran the official Texas A&M vs. University of Texas game ball to Austin. Squadron 7 ran a ball and left Thursday night during bonfire. Marine Platoon members left College Station Friday night. The Battalion regrets the er- intil I sa» um. jsterln® iut I didn' :ntical ut :nding U ed InAuS' it’s all pa> chunks ol es a bitts' •etaliate, colors" b y. KAtt own mof: ut it mac; am to I* f/ <0 editorial sti' ; every effd s submlttt- e classifies bebmgh TEACH FOR AMERICA application deadline for spring interviews January 4,1991 Teach For America is a national teacher corps of talented, dedicated individuals from all ethnic backgrounds and academic majors who work for two years in urban and rural schools that have persistent teacher shortages. Applications are available at Career Planning and Placement PAYS CASH FOR USED BOOKS! Redmond Terrace next to Academy Northgate across from Post Office Southgate on Jersey Street FISH CAMP '91 AVAILABLE: MONDAY, JANUARY 14TH Room 213 Pavilion INTERVIEWS begin Monday January 21 st (limited space available) sign up as soon as possible Wed, Jan. 16 or Thurs, Jan. 17 7:oo p.m. Rudder Theater