Deal with Continental is called off

November 04, 1990|By Dallas Morning News

DALLAS -- Electronic Data Systems Corp. of Dallas canceled a $250 million deal Friday to buy a half-interest in Continental Airlines Holding Inc.'s System One airline computer system, primarily because of concerns about the aviation industry's financial problems.

Spokesmen for EDS, Houston-based Continental Airlines Holding

and System One said the companies intend to keep their current interim arrangement, under which EDS assists Continental's computer operations.

They also are discussing their future relationship, which could include "facilities management and a possible joint marketing arrangement between EDS and System One," the companies said in a statement.

However, EDS isn't considering an equity stake in System One, EDS spokesman Roger Still said.

The announcement came as speculation grew that Continental Airlines Inc., owned by the holding company, will sell assets, including routes and airplanes, to help raise cash and cut operating expenses. Delta Air Lines Inc. acknowledged that it held talks to buy Continental's trans-Pacific route system.

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