Despite foes, Lorenzo applies to start Friendship Airlines

March 30, 1993|By Suzanne Wooton | Suzanne Wooton,Staff Writer

Despite intense political opposition, one-time airline magnate Frank Lorenzo moved ahead yesterday with plans to operate a new discount carrier, now officially dubbed Friendship Airlines, possibly out of Baltimore-Washington International Airport by June.

The decision to name the airline Friendship -- BWI's name until it was sold to the state in 1972 -- was "purely coincidental," according to company officials who said they were also considering Dulles International Airport in Northern Virginia.

"It's a very happy coincidence if it turns out to be BWI," said Gregory Aretakis, who will direct Friendship's marketing efforts.

But yesterday's application with the U.S. Department of Transportation was seen as anything but welcome by political leaders and labor unions, who recently forced Maryland transportation officials to abandon their efforts to lure the new airline with financial incentives.

The 44,000-member Air Line Pilots Association quickly responded to yesterday's application by vowing to "vehemently oppose" the application, saying Mr. Lorenzo "is unfit to be involved in any way in the airline business."

The company would be headed by Stephen J. Kolski, former president of Continental Express Airlines. Mr. Lorenzo, chairman Savoy Capital Inc., a Houston-based investment company and former chairman of Continental Airlines, is a major investor in Friendship Airlines and would serve on its board of directors.

The move by Mr. Lorenzo to re-enter the industry has sparked bitter opposition from organized labor, which threatened to boycott BWI. It also precipitated the introduction of a strongly worded legislative resolution in Annapolis, calling Mr. Lorenzo "the bad boy of the airline industry."

During the 1980s, Mr. Lorenzo emerged as a leading player in the airline consolidation battles spawned by deregulation, leveraged buy-outs and cost-cutting strategies. As head of Texas Air Corp., he was renowned for strong-arm tactics with the unions at Eastern and Continental airlines.

In trying to make a comeback, he has become a lightning rod to many who insist he symbolizes the greed and mismanagement that weakened airlines in the 1980s.

But yesterday Mr. Kolski described Mr. Lorenzo was "a significant investor who brings knowledge and experience" to the new venture. "We don't think he's a negative," he said.

Mr. Kolski said yesterday that the airline, unlike past no-frills carriers, would offer full service, including meals and other in-flight services, along with advance reservations.

"The company does not plan to be a 'discount' or 'no-frills' carrier, but instead will offer both business and pleasure travelers safe, comfortable and reliable air transportation that is easy to buy and easy to use," he said.

He said the anticipated ease for passengers resulted in the use of the name Friendship. The new carrier would lease two DC9-30s or 737-200 aircraft to offer two flights a day from a Washington metropolitan area airport to Boston and Orlando and back.

Mr. Kolski said its fares would run 20 percent to 25 percent below average fares offered by other carriers.

While the airline would not have a hub, typical of major carriers, it would likely locate its corporate headquarters in the same location as the airport. Company officials said the start-up operation would likely have a work force of about 200 employees.

Federal transportation authorities must decide whether the airline is financially sound, has adequate management expertise and whether its officials were likely to comply with government ,, regulations.

The state, which operates BWI, cannot legally deny any federally approved carrier the right to land there.

Federal regulators are not expected to act for at least a month.

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