page_title: Frank Lorenzo
section_title: Formation of Texas Air and New York Air
hierarchical_section_title: Frank Lorenzo / Early airline career / Formation of Texas Air and New York Air
caption_attribution_description: English: A Douglas DC-9-32 (N557NY) of New York Air at Detroit Metropolitan Wayne County Airport
context_page_description: Francisco Anthony "Frank" Lorenzo is an American businessman. He is well known for his leadership of Continental Airlines and Texas International Airlines, between 1972 and 1990, through airline deregulation. Lorenzo also led the creation and management of the holding company for the group, Texas Air Corporation, through which New York Air was formed in 1980 and Eastern Air Lines was acquired in 1986, as well as Frontier Airlines and People Express Airlines.
  As an airline manager, he gained a reputation of union busting, stemming from his leadership during the 1983 bankruptcy of Continental that enabled the company to void its union contracts, and become a low-cost, successful airline, and during the strike and bankruptcy of Eastern that eventually led to its permanent shutdown in 1991. Lorenzo's airline history is contentious, as he is both "despised by unions and admired by airline strategists." In 1990, after Lorenzo liquidated his holdings after 18 years in the airline industry, Alfred E.
context_section_description: Lorenzo restructured TIA in 1980, forming a holding company called Texas Air Corp, which was controlled by Jet Capital, as TIA had been. Texas Air owned TIA and had cash holdings of about $60 million, which Lorenzo said would be used primarily for investments in the airline industry. Later in 1980, Texas Air formed a new airline, New York Air, with $25 million in capital. Lorenzo was the chairman of the new company, which was to fly shuttle flights between New York La Guardia, the airline's hub, Boston-Logan, and Washington-National Airports. Plans included expansion to several cities in the Northeast.
  New York Air planned to win customers by charging lower fares and providing better service and roomier seats than the dominant carrier between New York and Washington, Eastern Airlines, which responded by offering lower fares. Pan Am, which had announced competing service after New York Air's formation, also lowered its fares.
  The formation of New York Air was opposed by the unionized employees of Texas International Airlines, who were upset that non-union employees were being hired and that pay rates were substantially lower than union rates at TIA; in the case of pilots, the rate was about half of the union rate. The unions felt the company was set up specifically to "sidestep longstanding labor contracts with organized employees" and that the jobs should have been offered to TIA employees. The pilots' union planned a $1 million protest campaign and a boycott of companies that did business with Texas Air, the parent company, but the campaign was called off because of the 1981 air traffic controllers' strike.
caption: DC-9-32 of New York Air
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