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Lorenzo’s Attempt to Re-Enter Airline Business Draws Opponents

March 30, 1993

WASHINGTON (AP) _ Former airline executive Frank Lorenzo wants to get back in the business, and opponents are lining up to urge the government to reject the move.

The proposed new carrier, Friendship Airlines, is backed by a group of investors headed by Lorenzo.

The airline, with an initial fleet of two aircraft, wants to fly from the Washington, D.C., area to Boston and Orlando, Fla., it said in an application Monday to the Transportation Department.

A group of House members, anticipating the application, wrote the Clinton administration last month urging a ban on Lorenzo, whose hard-nosed management of Continental and Eastern airlines angered unions and their supporters.

The Air Line Pilots Association added its voice to the opposition Monday.

″This industry is in enough trouble as is,″ said ALPA President Randolph Babbitt. ″For the life of me, I don’t know why anybody would want to do business with″ Lorenzo.

″If any pilot had cracked up as many planes as he cracked up airlines, he’d be banned,″ Babbitt said.

Stephen Kolski, former president of Continental Express Airlines, is president of Friendship Airlines. But the main shareholder is Lorenzo, with 60 percent of the investment. Gregory Aretakis, a vice president of the new company, would not say how much the investors are putting up.

The Transportation Department, which would have to approve the new airline, had no immediate comment.

Among Lorenzo’s opponents are 21 House members who have written Transportation Secretary Federico Pena to urge him to block any new airline headed by Lorenzo. He ″is not fit to own and operate another airline ... given his previous management record,″ the House members said.

Rep. Peter DeFazio, D-Ore., a leader of the congressional opponents, said Lorenzo is a symbol of ″greed, leveraged buyouts and mismanagement″ that weakened the airline industry. Fazio also said that under Lorenzo, the now- defunct Eastern Airlines had many safety violations.

Friendship proposed to begin operations by June, offering ″a simplified fare structure with fares set below those of airlines currently flying.″

Kolski said the new carrier would not be a discount or ″no-frills″ airline.

He said Friendship would operate daily flights between the Washington, D.C., area from Baltimore-Washington International or Dulles International airports and Boston and Orlando, Fla. The initial fleet would include two leased DC-9-30 or Boeing 737-200 aircraft with one-class coach service.

Friendship is seeking to enter the airline business at a time when the industry is struggling. Carriers in the United States have lost some $10 billion over the last three years, and some have said the cause is too many flights and too few passengers.

But Friendship said there is ″substantial latent demand among middle- income Americans for reliable, friendly and easy-to-use air transportation.″

The new airline also said it does not intend to expand too rapidly, concentrating on a relatively small market instead.

The Federal Aviation Administration is empowered to decide whether an airline is safe to operate. The Transportation Department decides whether an airline is financially sound, has adequate management expertise and whether its officials are likely to comply with government regulations.

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