Braniff Moves to Install New Chief Executive
Dec. 23, 1989
ORLANDO, Fla. (AP) _ Braniff Inc. asked a federal bankruptcy judge Friday to install an interim chief executive officer, only a day after the struggling carrier's top two executives resigned.
David Murchison, 41, who himself stepped down last month as Braniff's vice president, general counsel and secretary, was recommended for the top job by both creditors and management, said Braniff spokeswoman Ann Cook.
U.S. Bankruptcy Judge C. Timothy Corcoran in Orlando will review the recommendation and make the final decision. He has not set a date to consider the motion.
''Braniff has a very strong mid-level management that is capable of running the company until the judge makes his decision,'' Ms. Cook said.
Murchison was a vice president with Piedmont Aviation for three years before joining Braniff in 1988. The plan is for him initally to serve as an interim chief executive and he may take over the job permanently, Ms. Cook said.
The management changes come at a time when the carrier is struggling through bankruptcy proceedings, and both creditors and employees are calling for new management.
Orlando-based Braniff, which filed for Chapter 11 protection Sept. 28, has only 275 of its 4,800 pre-filing workers and has trimmed its schedule to just charter flights.
''We don't want liquidation,'' said Tom Burnette, chairman of the Teamsters union's Braniff committee. ''We want to preserve some jobs, if there's a possibility at all.''
William McGee, Braniff's chief executive officer, and W. Howard Mackinnon, chief financial officer, submitted their resignations Thursday of their own accord, Ms. Cook said.
''They simply feel the company has reached the point where their services are no longer needed, and they left to pursue other interests,'' Ms. Cook said.
The resignations came the same day Braniff announced a drop in earnings. For the third quarter ended Oct. 31, Braniff showed a net loss of $134.9 million, compared with a loss of $7.8 million for the same period in 1988.
Braniff also announced it's giving up its rights to five leased Airbus jets rather than go to court over the aircraft.
Ireland's GPA Group Ltd. had sued Braniff for the five jets because the airline owed $3 million in lease payments. Braniff said the Airbuses are being returned as a ''gesture of good faith.''
Scott Hamilton, editor of the Commercial Aviation Report in Dallas, said Braniff had little hope of keeping the planes once GPA sued.
''Yes, Braniff could have fought tooth and nail, but to what end?'' he said. ''They would have lost the airplanes, and meanwhile they would have lost the legal fees.''
The return of five Airbuses does not affect Braniff's agreement to lease and purchase another 45 jets, according to a statement issued jointly by Braniff and GPA. The undelivered Airbuses are the airline's chief asset.
Braniff, whch has been sustaining itself recently by selling off assets, is trying to find a customer for the lease agreements and purchase options.
Braniff lost $175.7 million in the first nine months of its fiscal year on revenue of $391.8 million. The $134.9 million quarterly loss is equivalent to $9.15 a share and includes a $64 million writeoff for intangible value the company lost when it filed for bankruptcy protection, plus $22.4 million related to the bankruptcy filing.