Texas Air Corporation, also known as Texas Air, was an

airline An airline is a company that provides air transport services for traveling passengers and freight. Airlines use aircraft to supply these services and may form partnerships or alliances with other airlines for codeshare agreements, in wh ...

holding company A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...

, incorporated in June 1980 by airline investor

Frank Lorenzo Francisco Anthony "Frank" Lorenzo (born May 19, 1940) is an American businessman. He is well known for his management of Continental Airlines and Texas International Airlines, between 1972 and 1990, through airline deregulation. Lorenzo also le ...

to hold and invest in airlines. The company had its headquarters in the America Tower in the

American General Center The American General Center is a complex of several office buildings in Neartown Houston, Texas located along Allen Parkway.Neartown Houston, Texas.

History

The company initially acted as a holding company for Texas International Airlines, which Lorenzo owned through his investment firm Jet Capital. Shortly after its formation, Texas Air founded New York Air, a

low-cost carrier A low-cost carrier or low-cost airline (occasionally referred to as '' no-frills'', ''budget'' or '' discount carrier'' or ''airline'', and abbreviated as ''LCC'') is an airline that is operated with an especially high emphasis on minimizing op ...

in the

US Northeast The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

. In 1981, Texas Air acquired

Continental Airlines Continental Airlines, simply known as Continental, was a major United States airline founded in 1934 and eventually headquartered in Houston, Texas. It had ownership interests and brand partnerships with several carriers. Continental started ...

through a

hostile takeover In business, a takeover is the purchase of one company (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to t ...

bid, and subsequently merged Continental with Texas International, retaining the Continental brand. In 1986, Texas Air acquired both

Eastern Air Lines Eastern Air Lines, also colloquially known as Eastern, was a major United States airline from 1926 to 1991. Before its dissolution, it was headquartered at Miami International Airport in an unincorporated area of Miami-Dade County, Florida. E ...

and People Express Airlines, including the assets of People Express's bankrupt subsidiary,

Frontier Airlines Frontier Airlines is a major ultra-low-cost U.S. airline headquartered in Denver, Colorado. It operates flights to over 100 destinations throughout the United States and 31 international destinations, and employs more than 3,000 staff. The ca ...

. 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, 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 Union busting is a range of activities undertaken to disrupt or prevent the formation of trade unions or their attempts to grow their membership in a workplace. Union busting tactics can refer to both legal and illegal activities, and can range ...

tactics to lower labor costs within its subsidiaries. In September 1983, Texas Air pushed Continental into

bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debto ...

, 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. 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. With lower labor costs, Texas Air successfully restructured Continental as a low-fare carrier, and allowed it to exit bankruptcy in 1986. 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. In March 1989, Texas Air locked out Eastern's mechanics, which resulted in the majority of Eastern employees walking out on strike, forcing the airline into bankruptcy. In April 1990, Eastern's bankruptcy judge ordered the removal of Texas Air's control of the carrier, citing deliberate mismanagement and unsafe business tactics. At its peak in 1986, Texas Air was the second-largest airline in the world, behind the

USSR The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen nati ...

's state carrier

Aeroflot PJSC AeroflotRussian Airlines (russian: ПАО "Аэрофло́т — Росси́йские авиали́нии", ), commonly known as Aeroflot ( or ; russian: Аэрофлот, , ), is the flag carrier and the largest airline of Russia. The ...

, 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 Debt is an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another party, the creditor. Debt is a deferred payment, or series of payments, which differentiates it from an immediate purchase. The ...

, 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. Following the loss of Eastern, in June 1990 Texas Air rebranded itself as "Continental Airlines Holdings", in order to "reflect the fact that the principal business of the company is Continental", according to Lorenzo. In August of the same year, Lorenzo agreed to leave the company after selling his remaining shares to SAS. However, the company was never able to recover from its significant debts and poor reputation, and entered bankruptcy in December. In November 1992, Continental and Britt Airways (a commuter airline owned by Texas Air) were bought by an

Air Canada Air Canada is the flag carrier and the largest airline of Canada by the size and passengers carried. Air Canada maintains its headquarters in the borough of Saint-Laurent, Montreal, Quebec. The airline, founded in 1937, provides scheduled an ...

-led consortium, resulting in Continental Airlines Holdings being dissolved.

Holdings

Continental Airlines Douglas DC-9-14 Silagi-1

Airbus A300B4-203, Eastern Air Lines AN0207526

Alongside its official holdings, the company also operated through a number of

shell companies A shell corporation is a company or corporation that exists only on paper and has no office and no employees, but may have a bank account or may hold passive investments or be the registered owner of assets, such as intellectual property, or ...

in order to protect Texas Air's core assets from bankruptcy proceedings, such as Texas Air Fuel Services, which controlled all fuel transactions for the company's airline subsidiaries.

References

External links

* {{Authority control Eastern Air Lines Airline holding companies of the United States Holding companies established in 1980 1980 establishments in Texas American companies established in 1980 Airlines established in 1980

History

Holdings

See also

References

External links