Francisco (Frank) Lorenzo was born in New York in 1940. Lorenzo worked his way through Columbia University and graduated with a BA in economics. He went on to earn an MBA from Harvard Business School in 1963. In 1972 Lorenzo took the reins of the faltering Texas International Airways which had been losing money since 1966. By 1974, under Lorenzo’s management, the company was able to break even due to significant cost-cutting initiatives. The next five years TIA’s character as a company made some drastic changes as Lorenzo updated the fleet, cut costs, dropped many losing routes and added flights on stronger routes. By 1977 the company was earning $8 million, and in 1978 TIA’s reported net income reached $13.2 million.
In 1980 Lorenzo restructured TIA and formed a holding company called Texas Air Corp, which was under the control of Jet Capital, which had controlled TIA in the past. Later in 1980 Texas Air created a new airline, New York Air. In 1981 TIA offered to buy Continental Airlines, and by the end of 1982 Texas Air remained the parent company but the combined companies worked under the name Continental.
Lorenzo liquidated his holdings in the airline industry after 18 years. The main architect of airline deregulation, Alfred E. Kahn said this about Lorenzo in 1990: “I don’t think there is any question that he saved Continental, but his tactics obviously didn’t work when he took over Eastern.”