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Industry pioneers
Hero, villian, or just the next big thing in 1980s air finance?
Corporate raider, union basher, asset stripper, even "the most hated man in US business today". Frank Lorenzo has been called all these insults and more. But to his apologists --and there are still many --- Lorenzo brought a breath of fresh air into the US corporate airline business.
Lorenzo represented a new generation of aviation executive to emerge in the 1980s - more attuned to making businesses profitable than a love of pure flying. Hard-bitten, yes. But realistic and driven by the profit motive, which in 1980s parlance is what business was all about.
Lorenzo, born in 1940, was the son of Spanish immigrants in Queens in New York. He went to Columbia University and then took a business degree at Harvard Business School graduating in 1963. Consultancy work with entrepreneur Bob Carney from 1966 and a rapidly digested assimilation of air finance techniques helped him to take control of Texas International Airlines), an airline business on the verge of bankruptcy, in 1971.
But Lorenzo's big leap to the centre stage in the airline business followed the Deregulation Act of 1978 in the US. This effectively allowed airlines to expand their routes and set their prices as they chose. The government's aim was to create greater competition, which it thought would benefit consumers through cheaper airfares.
As head of Texas Airlines, Lorenzo understood immediately how a network of air routes could be expanded. The whole of the aviation industry was now open to a more ruthless approach to doing business where mergers and acquisition (hostile or friendly) were now par for the course.
The age of the corporate raider and leveraged buy out had arrived.
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