Lorenzo expected to choose BWI if he forms airline LTC

February 05, 1993|By Suzanne Wooton | Suzanne Wooton,Staff Writer

Baltimore-Washington International Airport would likely have an edge over Virginia's Dulles International Airport as a hub for a new no-frills airline reportedly being planned by former airline executive Frank A. Lorenzo, according to several analysts.

Mr. Lorenzo, the controversial airline executive who once headed the now defunct Texas Air Corp., which owned Continental and Eastern airlines, is expected to seek federal approval to start an airline that would operate out of either BWI or Dulles.

Officials at BWI and the Maryland Department of Transportation, who would be instrumental in negotiating such a deal, have refused comment.

"It's too sensitive now," said Jay Hierholzer, director of marketing at BWI. A spokeswoman for Dulles said airport authorities had not been contacted by Mr. Lorenzo.

Mr. Lorenzo, who now heads Savoy Capital Inc., a Houston-based investment firm, was unavailable for comment. But David Hackett, managing partner at Savoy, said "Savoy is currently considering an investment in several airline start-up plans."

Several airline analysts say a new carrier would be far more likely to take on financially struggling USAir Group Inc., the major carrier at BWI, instead of United Airlines, which operates a hub at Dulles. And they predicted that the underused BWI might more aggressively pursue a new carrier, with cheaper landing fees and the promise of joint marketing efforts, than the Metropolitan Washington Airports Authority, which manages both Dulles and National Airport.

"The state of Maryland would be more aggressive. BWI is an under-utilized airport. They've got plenty of gate space," said Jeffrey R. Miller, a Gaithersburg attorney who specializes in transportation issues. "I'd assume he'd [Mr. Lorenzo] pick BWI over Dulles."

USAir began cutting back service more than two years ago. Its departures at BWI have dropped from 249 to 192 a day since 1990, and the airline has replaced some jet service with smaller commuter flights.

"USAir has backed down to some degree, so there might be a vacuum at BWI," said Lee R. Howard, president of Airline Economics Inc., a Washington airline consulting firm.

Mr. Howard said a new airline would likely try to undercut fares significantly. And that could be bad news for USAir, which has lost nearly $1 billion in last four years.

Starting up a new airline would be timely in some respects. There are plenty of excess planes and workers available as airlines, faced with record losses, have trimmed service and laid off employees.

But unions, who bitterly remember Mr. Lorenzo's strong-arm tactics in managing Eastern and Continental, vowed to oppose his re-entry into the airline business.

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