The Rise And Fall Of Frank Lorenzo – A Man Who Took Over A Sputtering Airlines And Flew It Into The Ground

Frank Lorenzo from day one of his life he was this beaming star of hope and opportunity, graduating from Harvard Business School and Columbia College. Lorenzo started his working career for the financial department of Trans World Airlines and Eastern Air Lines, but he doesn’t stop there. In 1969, Lorenzo co-founded a company called Jet Capital, which was highly attracted in the company Texas Air. At the end of 1972, Lorenzo was the head of Texas International Airlines after taking advantage of the Airline Deregulation Act of 1978, allowing all carriers to grow at an increased rate and into several new markets. Lorenzo milked this act for everything that it had overtaking airlines, and breaking apart companies was a hobby for him now. After the first overtaking of Texas International Airlines, he went on to overtake Continental Airlines, Eastern Airlines, and New York Air. Lorenzo became to be known to some workers as the Grinch due to how he laid off most of his entire workforce, and the brought in non-union workforces to regenerated the airline entirely from the ground up. Through Lorenzo doing this he could cut wages in half ;however, this caused for 14 hours days and six-day weeks. Through this bumpy phase for Texas International Airlines Lorenzo turned it all around for the better, by introducing a new fleet, getting rid of unbeneficial routes and along with half-price airfares. The thought of the century was that Frank Lorenzo was a celebrity of his time when it came to the US airline industry.

With being the shining star that he made Texas International Airlines have a large golden star, causing other airlines to struggle to even keep their doors open, and some even having to merge together just to stay afloat. Lorenzo was power hungry and the worst thing about it, he was successful enough to get whatever he wanted. Formerly before Lorenzo took over Continental Airlines the workers, and the Chairman actually opposed of this idea so much because of his past dealing with the employees that they formed a group that would allow them to take control of the airline. Alvin L. Feldman, the Chairman prevented his idea as much as he could, and was openly public with his thought on Lorenzo, however; in the hostile end, Lorenzo won. After obtaining Continental there were so many strikes from employees and mechanics’ that after 19 months with no settlement being made, Continental declared bankruptcy. Even after the bankruptcy, the strikes continued, even the pilots began to step up for themselves. However, with all of this action, Lorenzo believed that continental would be non functioning if the wages were not changed. This lead to Continental laying off more than half of their employees, in the later 1980s the company came out of bankruptcy.

As stated before after Continental soon came the fall of Eastern Airlines into the hands of Lorenzo. In 1986 Frank Lorenzo because the CEO of Eastern Airlines, during this time this company had an amazing footage being called the third largest airline. What a lot of individuals do not realize is that Eastern Airlines was already in a decline before Lorenzo got there. Eastern Airlines had a continuing war between management and the employees, and the expenses were increasing every second. Lorenzo’s employees at Eastern Airlines hated him enough to even put their own jobs on the line to potentially get him fired. I do believe that Lorenzo loved that he had power over almost everyone that he was around; he was abusive to the employees that they were finding sanctuary in drug use and even theft. It got so bad that in one year alone 262 individuals lost their jobs due to these situations.

The stress level already existing in the lives of pilots are high and then adding the work schedule and abuse it became to be a true danger to travelers boarding Eastern Airline flights. Since Lorenzo was so power hungry he continued to take over other airlines while still trying to manage others. Later down the road, he decided that he was going combine Continental Airlines and Eastern Airlines into People Express and Frontier Airlines. This went as well as anyone could expect, with Lorenzo now having control of 1/5 of the world air traffic. Among routes being overbooked, maintenance being behind, and all employees being worn-down it was completed and total madness. With the amount of abuse Lorenzo was giving all employees went on Strike, everyone from the pilots to the machinist was fed up with Lorenzo. With no one working Eastern Airlines went bankrupt, with a pile high in debt that official was too much shutting the doors of Eastern Airlines in 1991, along with Frontier Airlines in 1986. Through the shadows and debt Lorenzo came out still shining bright getting away with millions of dollars in assets of the companies he once ran. After most of his companies went bankrupt Frank Lorenzo retired in 1990 after 18 years of service in the aviation industry. Several people tend to say Lorenzo destroyed every airline he came in contact with but without him, I do not think they would have thrived as much as they did. Lorenzo’s philosophy was to offer the lowest prices and cut the charges for all airlines he ran, he had the guts to do what others would not, creating an image for himself and his airlines.

For years of Frank Lorenzo’s life, he was one of the largest airline businessmen in the world and then he lost it all. Throughout this paper you can see the rise and fall over Frank Lorenzo and how he would bring failing airlines into the largest ones in the world only to fall again, however; his labor I do believe that the lack of leadership and listening to the workers lead to the termination of most of the airlines. I do think Lorenzo still is a touchy subject to some individuals in the aviation industry, nevertheless; I believe the man had guts and should receive a little of respect for his brilliance strategies and thought process. Lorenzo was the fact that people came to blame when looking at Continental, Eastern, and Texas Air but he wasn’t the only man running these companies yes, he deserves some of the blame but not the entirety. Lorenzo was a tough guy who was a brilliant and fast thinker and left the aviation industry with something they had never seen before.

15 April 2020
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