Newspaper article THE JOURNAL RECORD

Judge Approves Plan for Continental Airlines

Newspaper article THE JOURNAL RECORD

Judge Approves Plan for Continental Airlines

Article excerpt

By Dan Blake

Associated Press

A federal judge formally approved another lease on life Friday for Continental Airlines, giving it the distinction of surviving two long bouts of bankruptcy refuge during the most tumultuous period in U.S. aviation history.

U.S. Bankruptcy Court Judge Helen Balick in Wilmington, Del., endorsed Continental's plan to restructure its way out of court, for the second time in the past decade.

Under the restructuring, Continental will sell a majority stake to Air Canada and U.S. investors.

Continental has service to Will Rogers World Airport in Oklahoma City. Continental had 24,908 enplanements in Oklahoma City during the first quarter, representing 7.7 percent of all enplanements at Will Rogers Airport.

From a strike and bankruptcy in the 1980s under former boss Frank Lorenzo, to its most recent bankruptcy filing 2 years ago and an alliance with a foreign airline, Continental's travails and successes symbolize some of U.S. aviation's biggest changes.

Three other big U.S. airlines _ Pan Am, Midway and Eastern _ have died in bankruptcy court over the same period, unable to handle a mix of heavy debts, labor problems and competition that spawned repeated fare wars.

The industry has lost billions of dollars in a prolonged slump. Even relatively healthy airlines are laying off workers, canceling orders for new planes and cutting flight schedules, reversing expansion plans they once touted a few years ago.

Continental plans to leave bankruptcy court by the end of the month with new cash and a promise of U.S.-bound passengers from Air Canada.

"While our progress has been noteworthy, we remain aware of the unprecedented current of change sweeping the industry, and we in no way underestimate the additional energy that will be required to move ahead," Continental's chief executive, Robert Ferguson III, said after Balick sanctioned the airline's plan.

The new owners have said they intend to keep Ferguson as the airline's top manager.

Like much of the industry, Continental will continue to have a large debt burden and face an environment where airlines face a tough time raising more money. …

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