19 Years

[Dark Knight]

A piece of History.....

with a few interesting parallels....

History unlearned??

DK


May 12 1982: Braniff International Airways

Recession, price wars and sharply rising fuel costs have gravely wounded the airline industry during the past four years. Last week those troubles claimed their first major victim. Braniff International, the ninth largest U.S. airline, declared bankruptcy. It was the first failure of a major carrier since American aviation came flying out of the barnstorming era in the 1930s.

In June, 1988:

BIA-COR Holdings, Inc. - Core Group led by Jeffrey Chodorow (who would reform Braniff one more time in 1991 and steal the rest of the companies' assets) and Arthur Cohen bought Braniff from Dalfort Corporation. Scot Spencer also joined the team, who, as you will find out, was thrown in jail for his involvement in Braniff III. They borrowed LARGE sums of money to pay Pritzker and Post for the airline. A new management team was brought in, and Bill McGee was named Chairman, president and CEO. McGee was formerly with Piedmont Aviation, Inc. (Piedmont Airlines). Dalfort, led by Pritzker in 1988, still held a substantial stake in Braniff, Inc.
In June, 1988 BIA-COR Holdings, Inc. - Core Group led by Jeffrey Chodorow (who would reform Braniff one more time in 1991 and steal the rest of the companies' assets) and Arthur Cohen bought Braniff from Dalfort Corporation. Scot Spencer also joined the team, who, as you will find out, was thrown in jail for his involvement in Braniff III. They borrowed LARGE sums of money to pay Pritzker and Post for the airline. A new management team was brought in, and Bill McGee was named Chairman, president and CEO. McGee was formerly with Piedmont Aviation, Inc. (Piedmont Airlines). Dalfort, led by Pritzker in 1988, still held a substantial stake in Braniff, Inc.

Braniff filed for Chapter 11 on September 28th.

Braniff resumed service on October 1st for a short charter career using its 727s. It flew to 11 cities and Braniff finally called it quits at the end of December 1989.
If greed played a tiny role in Braniff Airways shutdown in 1982, and a bigger role in the shutdown of Braniff II, then it played THE STARRING role in the conception of "Braniff III." Jeffery Chodorow, with Scot Spencer, (both of whom bought Braniff II from Jay Pritzker) defrauded thousands of people and conned corporations left and right while burying the Braniff name firmly and finally into the mud.

Click here to read about the slimebags who sullied Braniff's name.

Continental Airlines:

In 1981 Texas Air Corporation, an airline holding company controlled by U.S. aviation entrepreneur and raider Frank Lorenzo, acquired Continental after a contentious battle with Continental's management who were adamantly determined to resist Lorenzo. Continental's labor unions also fiercely resisted, fearing what they termed as, "Lorenzo's deregulation tactics." During this struggle, Continental Airlines President, A. L. Feldman, committed suicide, on August 9, 1981, in his office. In the end, Texas Air Corp. prevailed. Frank Lorenzo became Continental's new Chairman and CEO. Texas International Airlines (TI), another Lorenzo holding, was merged into Continental Airlines in June 1982. TI ceased to exist and the "new Continental" relocated its headquarters to Texas Air's base in Houston, Texas.

The merger resulted in a large expansion of Continental's hub at Houston Intercontinental Airport and its extensive routes to Mexico. Airline unions fought Continental at every step. In the Federal courts, they unsuccessfully sued to stop the company's reorganization. They were successful in working to persuade Congress to pass a new bankruptcy law preventing bankrupt companies from terminating contracts as Continental had successfully done. The law was too late to affect Continental and the drastic cost cutting and changes that had rescued it from liquidation.

Frank Lorenzo took Continental into Chapter 11 bankruptcy in September 1983 after unsuccessfully attempting to negotiate a lower pay rate with labor unions. Following bankruptcy, Continental was freed of its contractual obligations and imposed a series of new labor agreement on its union workers, sharply reducing the airline's labor costs at the cost of employee morale.

This move made Continental vastly more competitive with the new airline startups then emerging and thriving in the southwestern U.S.Much of the airline was liquidated and the company was rebranded as a low-cost carrier. Continental was also forced to abandon its hub in Los Angeles although it maintained its Denver and South Pacific routes. A more streamlined, leaner Continental emerged only a few days after the bankruptcy filing, a fact which gave Continental the distinction of being the first airline to fly through bankruptcy
Lorenzo goes to Eastern Airlines:

Lorenzo and his Texas Air International oversaw a dramatic and rapid decline for Eastern Airlines, which was in a difficult but redeemable position when purchased. Although the exact causes of the decline are disputed to this day, most analysts agree that the carrier was systematically raided of valuable assets including new aircraft, its east-coast shuttle service, its lucrative fuel operations, and its worldwide travel agent computer system (SystemOne), almost all of which was sold at drastically reduced prices or given to Lorenzo's other carrier, Continental.

This combined with poor management, a worsening economy, and deteriorating labor relations forced the carrier into Chapter 11 bankruptcy in 1989 following a mechanics strike.

At the time it was the largest airline bankruptcy in U.S. history, a title it held until United filed after the 9/11 terrorist attacks. The carrier was placed under the direction of trustee Martin Shugrue.