When Francisco A. (Frank) Lorenzo was in college, his interests in transportation seemed to be mostly over water: He earned his varsity letter rowing on the Columbia crew.
But in fact, he said later, his romance with the airline industry had already begun. He was only 15, growing up in Queens, N.Y., when he made his first flight, on a Trans World Airlines plane to London. "When I got back, I rushed right out and bought some stock in the airline," he recalled.
Now Lorenzo, at the age of 45, is about to become one of the most powerful airline executives in the country, acquiring control of TWA to go with Continental and New York Air, which he already controls. The $793.5 million acquisition of TWA, announced yesterday, will culminate a rapid and often controversial rise to the top of the U.S. airline industry.
His career has earned him the bitter enmity of the Air Line Pilots Association and other unions, because he took Continental into Chapter 11 bankruptcy proceedings, slashed its payroll and abrogated its labor contracts because he considered the airline's costs too high to be competitive. He has been in the forefront of the development of low-cost, nonunion airlines that have proliferated in the age of deregulation.
Dun's Business Month has called him "autocratic." Forbes says he is "tough." But Lorenzo has defended his unpopular actions as necessary to run a profitable business in a struggling industry.
"To do my job properly," he told The Washington Post when Continental's pilots struck in 1983, "I can't run a popularity campaign. I have to look at what the company will be five years from now, not one month from now. The pilots see me as a symbol of deregulation; they are confusing the messenger with the message."
Lorenzo has a private pilot's license, but he came into the airline business through the financing end. After Columbia, where he majored in economics, he went to Harvard Business School, paying for his education by driving a Coca-Cola truck. His first job after earning his MBA degree was as a financial analyst -- with TWA.
He later became manager of financial analysis at Eastern Air Lines. Then, in 1966, he and a Harvard classmate, Robert J. Carney, set up their own financial consulting company, specializing in airlines. They later founded Jet Capital Corp., which bought a controlling interest in Texas International Airlines Inc., a nearly bankrupt regional carrier in Texas. At the age of 32, Lorenzo became the carrier's youngest president.
Texas International became the vehicle for the rapid expansion of Lorenzo's holdings in the industry. Building on the turnaround of Texas International, Lorenzo established New York Air in 1980, betting that a low-cost, non-union carrier offering low fares could crack a crowded market dominated by Eastern and its shuttle.
Then in 1981, Texas International bought the much larger -- but money-losing -- Continental, which was fully unionized and had the high labor costs characteristic of the established trunk carriers. Within two years Lorenzo, had moved decisively, if controversially, to slash salaries, increase working hours and reduce operating costs -- touching off legal battles that continue even as Continental has returned to profitability.