THE GALL AWARD of the year must go to Texas International Airlines. Not so long ago it was just another small company that, unless you happened to be flying around Texas, was best known for having a pretentious name that bore little connection to reality.
But times have changed. Last year, TI and its chairman, Frank Lorenzo, tried to buy National Airlines. While the plan didn't work -- at least, TI didn't get to swallow National -- it was highly profitable. TI's stockholders made $48 million before taxes when Mr. Lorenzo sold the stock he had acquired in National to Pan American for almost twice what he had paid for it.
Its appetite whetted by that deal, TI has its eyes on bigger game now. The company announced last Thursday that it wants to take over TWA. If TI is a miniature in the airline business, TWA is a giant. It has 12 times as many employees as TI, 9 times as many airplanes and 20 times as much revenue. The stock market, before TI's announcement, valued TWA at$400 million and TI at $50 million. Yet it is TI that wants to do the buying.
A few years ago, there would have been laughter at the mere mention of such an idea. Everyone knows that little companies don't take over big ones, especially those that are leaders in an industry. But the aviation analysts are taking the bid by Mr. Lorenzo and TI seriously. Whether it works or not, one of them said, it is part of a "broad consolidation" of the airlines.
That consolidation, which began in earnest after Congress approved gradual deregulation of the industry, has already produced several mergers. TI's effort to take over National sparked one of them since it set off a bidding war that Pan Am has apparently won. This grab by TI may produce another, either by setting off another bidding war or by making TI a major factor in international aviation. Either way, TI's audacious ventures demonstrate that sometimes it doesn't take long for old-fashioned capitalizm to reanimate an industry suddenly freed from tight government control.