Lorenzo bid for airline dealt a blow

December 23, 1993|By Suzanne Wooton | Suzanne Wooton,Staff Writer

Frank A. Lorenzo's bid to launch a discount airline at Baltimore-Washington International Airport suffered another blow yesterday as an administrative law judge in Washington recommended that his proposed airline be denied a license to operate.

The 90-page ruling by Judge Robert L. Barton Jr. -- his second against Mr. Lorenzo in three months -- is considered likely to quash the yearlong comeback effort by the former airline magnate. The U.S. Transportation Department will make a final decision within three months.

"It's safe to say that the ALJ opinion carries a significant amount of weight," said Bill Mosely, a spokesman for the Transportation Department.

Amid intense political and labor opposition, the federal agency ordered a highly unusual hearing last spring to evaluate whether the Houston-based ATX Airlines, which is three-fourths owned by Mr. Lorenzo, should be granted a certificate to operate. ATX had hoped to begin daily service last summer at BWI, with service to Boston and Orlando, Fla.

Judge Barton concluded that ATX had failed to show that it has the managerial skills or technical ability to run the airline, even though it has the financial resources.

"The labor relations record of Mr. Lorenzo's past airlines compels the conclusion that ATX under his ownership and direction likely will have tumultuous labor relations which may endanger air safety," the judge noted.

Mr. Lorenzo once headed Texas Air Corp. which encompassed Continental Airlines and the now-defunct Eastern Airlines. In trying to make a comeback, he had become a lightning rod to many who argued that he symbolized the greed and mismanagement that weakened airlines in the 1980s.

As head of Texas Air, Mr. Lorenzo clashed repeatedly with labor during the 1980s. During often heated testimony before Judge

Barton, the Air Line Pilots Association focused on Mr. Lorenzo's management of Eastern Airlines and the carrier's safety violations.

Yesterday, a spokesman for ATX said the ruling was "wrong but expected," given that Judge Barton had earlier dismissed the application on what the spokesman said were "patently ridiculous grounds that we exhibited improper courtroom behavior."

"We are hopeful and confident that senior DOT officials will affirm the fitness of Frank Lorenzo as they have on four prior occasions," said the spokesman, Richard Danforth, referring to previous department investigations of Lorenzo-operated airlines.

Mr. Danforth also challenged the impartiality of the Transportation Department's process that led to yesterday's recommendation. He pointed out that the brother of a key department employee involved is a former pilot for Eastern Airlines, once headed by Mr. Lorenzo.

"It prejudiced Mr. Lorenzo to a fair and impartial hearing," he said. Mr. Mosely denied any conflict of interest.

Randolph Babbitt, a former Eastern pilot who heads the Air Line Pilots Association, said: "An independent source has confirmed what airline workers have known for years. Frank Lorenzo destroys jobs, he destroys airlines and he is no friend of the consumer."

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