Texas International Airlines, a federally-regulated airline serving nine western and southern states, said yesterday it has acquired 9.2 percent of the stock of National Airlines, a coast-to-coast airline with several international routes.
The disclosure came in documents submitted to the Securities and Exchange Commission showing the purchase of 790,700 shares of National's common stock in open market transactions.
Although TXI is considering the possibility of seeking control of National, it has no current plans to acquire additional shares or to seek control," TXI spokesman Jim O'Donnell said yesterday. "It does, however, intend to review its interest in National on a continuing basis."
According to officials of the Civil Aeronautics Board, however, acquisition of any more National stock by TXI would require prior CAB approval, and that might not be that easy to get.
"We would look very carefully at it to see whether such a merger would have a tendency to substantially lessen competition," one CAB official said. He noted that the two airlines have routes and operations that overlap, a situation which would call such a merger into question on traditional antitrust grounds.
In addition, according to board officials, TXI may have needed prior CAB approval for the stock it has already acquired. One provision of the Federal Aviation Act requires prior board approval for transactions such as those which would result in the control of National by TXI. Another provision suggests that an owner of 10 percent or more of the stock is "presumed to be in control."
"There is a question whether the purchase of 9 percent is control," one board official said. "Prior approval of any control relationship is required."
As of yesterday, the CAB hadn't taken any action.
TXI, a federally-subsidized airline, has become somewhat aggressive in the last few years under the presidency of Francisco Lorenzo.
Lorenzo acquired control when he was chairman of Jet Capital Corp., which bought a 59 percent interest in TXI in August 1972.
TXI's profits shot up after it instituted the discounted "peanuts" fare on its system 18 months ago. Last year, TXI earned $7.99 million on total revenues of $147.6 million, while National earned $6.4 million on revenues of $541.5 million.