12. company ID badge: Letter from John Adams to Charles E. Bryan, Eastern Air Lines, Jan. 13, 1987; memo from A. M. Shade-Griffith to security officers, Jan. 13, 1987.
13. “public soap operas”: Adams to Bryan, Jan. 13, 1987.
14. “white paper”: Reggi Ann Dubin Associates, The IAM: Another Look, Mar. 1, 1988.
15. “false pretenses”: Memo to Clark Onstad, Texas Air Corp., from Reggi Ann Dubin, Mar. 1, 1988.
16. “never tells one person”: Murray 9/4/93 interview.
17. “If we can’t cut”: Quoted in Bernstein, Grounded, page 59.
18. simply stopped coming: Magurno 3/11/94 interview; Bakes 7/16/94 interview.
19. Lorenzo blew up: Magurno 3/11/94 interview.
20. arguably more in the interests of Texas Air: The examples of cash and assets taken from Eastern are detailed in “Examiner’s Analysis of Pre-Petition Transactions and Relationships,” In the Matter of Ionosphere Clubs, Inc., U.S. Bankruptcy Court, Southern District of New York, Mar. 1, 1990, and in Petzinger and Thomas, WSJ, Apr. 7, 1988.
21. million … gallons: Based on invoices totaling $19.4 million from April 1987 to December 1988. Report of the Examiner.
22. commodity markets: “Debtors’ Submission to the Examiner,” In the Matter of Ionosphere Clubs, Inc., Feb. 16, 1990.
23. People Express notes: The Eastern directors were assured by Texas Air that independent Wall Street investment bankers had found the terms of the sale fair to Eastern; all of the firms in question, however, had a previous relationship with Texas Air. “Examiner’s Analysis,” Mar. 1, 1990.
24. repaying Texas Air: Magurno 3/11/94 interview. In defending the transaction in Eastern’s bankruptcy proceedings, Texas Air noted that the People Express takeover had “removed the competitive threat People Express … presented to Eastern.” “Debtors’ Submission to the Examiner,” Feb. 16, 1990.
25. “flipped it”: Plaskett 4/21/93 interview.
26. only $100 million: A consulting firm provided an after-the-fact opinion to the Eastern board and to a group of Eastern’s creditors affirming the $100 million price as fair, but the opinion was based on a plethora of erroneous assumptions. These are documented at length in “Examiner’s Analysis,” Feb. 16, 1990.
27. rail strikes: Nielsen, From Sky Girl to Flight Attendant, page 26.
28. cover of Business Week: Bakes 9/7/93 interview.
29. “We don’t acknowledge”: “Texas Air Corp.’s Eastern Unit Seeks Steep Pay Cuts from Machinists’ Union,” by Paulette Thomas, WSJ, Oct. 6, 1987.
30. written record: “American Air, Chief End Antitrust Suit, Agree Not to Discuss Fares With Rivals,” WSJ, July 15, 1985.
31. “very carefully”: D. Reed, American Eagle, page 208.
32. Crandall … was mortified: Though Crandall has never publicly discussed the case, he has made his views known to others, including Plaskett and Becker.
33. “in my obituary”: Becker 9/3/93 interview; D. Reed, American Eagle, page 210.
34. cosmetic dentistry: Kaldahl 4/27/93 interview; “Battle of Titans: Crandall’s American Is Unlikely Recipient of $8 Billion Trump Bid,” by Bridget O’Brian and Judith Valente, WSJ, Oct. 6, 1989.
35. “rage less”: “American Rediscovers Itself,” BW, Aug. 23, 1982.
36. “I’ve never felt”: Crandall 6/13/94 interview.
37. burning inside: Plaskett 4/21/93 interview.
38. discreetly negotiating: Ibid.
39. 10 hottest executives: “New Airline Empire Will Test Lorenzo as a Manager,” by Paulette Thomas, WSJ, Dec. 26, 1986.
40. “like a Stradivarius”: “Rescue Party,” by Howard Banks, Forbes, Dec. 1, 1986.
41. slide show: “Continental Air Dismisses Plaskett; Lorenzo to Step In,” by Paulette Thomas, WSJ, July 22, 1987.
42. by the book: “Plaskett Replaced as Continental Chief; Lorenzo Takes Over,” Aviation Week, July 27, 1987.
43. round of golf: Bakes 9/7/93 interview.
44. “biggest … giveaway ever”: Quoted in “New York Officials Ground Continental Air Giveaway,” WSJ, Jan. 29, 1987.
45. “wanted a scene”: Quoted in ibid.
46. “Frank was adamant”: Plaskett 4/22/93 interview.
47. the “big bang”: Peterson and Glab, Rapid Descent, page 206.
48. 32 different galley: The service breakdown at Continental is detailed in “Texas Air’s Rapid Growth Spurs Surge in Complaints About Service,” by Paulette Thomas, WSJ, Feb. 26, 1987, and “Lorenzo Again Faces Problems at Helm of Continental Airlines,” by Carole A. Shifrin, Aviation Week, Aug. 3, 1987.
49. “never intentionally overcommit”: “Flight Ops Pipeline,” Continental Airlines, July 1987. Emphasis added.
50. Johnson & Johnson: “Lorenzo: In the Cockpit,” interview with Frank Lorenzo, Time, Nov. 23, 1987.
51. “lived through a lot”: Letter to Continental Pilots from Frank Lorenzo, Sept. 11, 1987.
52. tried to overcome: Plaskett 4/22/93 interview.
53. dumped Tom Plaskett: Thomas, WSJ, July 22, 1987.
54. they knew would hurt: Baker 4/23/93 interview.
55. “window of opportunity”: Remarks by Crandall, 1987 Fall Planning Conference, Harvey Hotel, Dallas, Oct. 14, 1987.
56. 15,000 reprints: “Shop Talk: Bookish Airline Is Magazine Fan, Too,” by Francis C. Brown III, WSJ, Mar. 3, 1987.
57. “abusing employees”: Quoted in “Crandall Hits Budget Lines for Cost Cuts at Employees’ Expense,” by Barbara Sturken, Travel Weekly, Aug. 12, 1987.
58. “treat … people dreadfully”: Quoted in “Continental: Full Planes May Not Mean Full Coffers,” by Jo Ellen Davis, James E. Ellis, and Chuck Hawkins, BW, Mar. 16, 1987.
59. “have no chance”: “Chairman of American Airlines Seeks Regulations on Employee Benefits,” by Scott Hamilton, Airline Executive, June 1987.
60. “it wasn’t success”: Quoted in Sturken, Travel Weekly, Aug. 12, 1987.
61. “can’t fix prices”: Quoted in ibid.
62. had a problem: G. Arpey 9/2/93 interview; Kaldahl 4/27/93 interview.
63. Crandall feared, the door: Crandall 9/1/93 interview.
64. overpaid for AirCal: Presentation by Frank Lorenzo, Quarterly Pilots’ Meeting, Continental Airlines, Houston Intercontinental Airport, Dec. 2, 1986.
65. “Lorenzo’s raiders”: Remarks by R. L. Crandall to Sabre Travel Information Network, Apr. 23, 1988.
66. sum of $250 million: Murray 9/4/93 interview.
67. “hate to lose”: R. L. Crandall, Address to Sales and Marketing Meeting, Aug. 2, 1988.
68. replacement altimeters: “Labor-Management Relations in the 1990s: Yesterday’s Tactics With Today’s Psychology and Tomorrow’s Technology,” Texas Air Corp., unpublished monograph, July 13, 1990.
69. $2 million subsidy: “The Eastern Pilot Group TAC Attack,” presented by Jack Bavis to ALPA Executive Committee, Washington, D.C., Jan. 20, 1987.
70. inundated with postcards: “ ‘Max Safety’ Shows Little Headroom for Pilot Tolerance,” by Paulette Thomas, WSJ, Oct. 28, 1987.
71. “make Frank … the issue”: Memorandum to Mary Jane Barry and Charlie Bryan from Joe Uehlein and Randy Barber, Feb. 8, 1988.
72. Jesse Jackson got: Barber 6/21/94 interview; Kenneth M. Jennings, “Union-Management Tumult at Eastern Air Lines: From Borman to Lorenzo,” Transportation Journal, Summer 1989.
73. “full investigation”: House Concurrent Resolution 262, 100th Congress, Mar. 10, 1988.
74. extremely favorable terms: A new unit of Texas Air proposed to buy the shuttle for $125 million in cash and a note of $100 million. By contrast, when Eastern ultimately did sell the shuttle to Donald Trump, the price was $365 million.
75. into a stupor: “Airline Backfire: Texas Air Triggered Investigation of Itself with Shuttle Gambit,” by Paulette Thomas, Bob Davis, and John E. Yang, WSJ, Apr. 15, 1988.
76. “noise level”: Frank Lorenzo, Remarks to International Aviation Club, Washington, D.C.
, May 4, 1988.
77. “discord and complexity”: Memorandum to the Transportation Secretary from the FAA Administrator, June 1, 1988.
78. “Nobody’d believe it”: Bryan 5/13/93 interview.
79. referring to as “D-Day”: Guy Uddenberg, Memo to All Employees, Eastern Air Lines, Toronto, Feb. 1, 1988.
80. “Eastern goes under”: Olsen 9/2/93 interview.
81. American’s internal studies: G. Arpey 9/2/93 interview.
82. Crandall seemed intent: Olsen 9/2/93 interview.
83. schedules were removed: Ibid.
84. “positioning ourselves”: Olsen 6/10/94 interview.
85. as mendacious a denial: An American spokesman told the WSJ, “This is not part of a strategy aimed at moving in on Eastern or anyone else.” “American Air Will Use Miami as a Crew Base,” by Paulette Thomas, WSJ, Aug. 11, 1988.
86. sense of disconnect: Bakes 9/7/93 interview.
87. “two scorpions”: Quoted in “Feud Between Bryan, Lorenzo Explains Much, but Not All,” by Bridget O’Brian, WSJ, Mar. 6, 1989.
88. Continental was cratering: Bakes 6/16/94 interview.
89. about $10 million: The estimate is based on a list of Lorenzo’s stock sales from Sept. 17, 1986, to Sept. 16, 1987, at prices ranging from $25.88 to $49.25. Official Summary of Security Transactions and Holdings, U.S. Securities and Exchange Commission.
90. had cost $70 million: Estimate based on pre-strike budget data, contained in undated Eastern Air Lines records.
91. “There’s no way”: J. Arpey 6/16/94 interview.
92. “When push comes”: Ibid.
93. “The best answer”: Quoted in “Judge Won’t Order Eastern Pilots to End Strike Backing Machinists,” WSJ, Mar. 8, 1989.
94. business textbook: Griffin, Business, page 222.
95. pen in his hand: “Eastern Woos Pilots to Break Planned Strike,” by Bridget O’Brian, WSJ, March 2, 1989.
96. Manhole covers: Peterson and Glab, Rapid Descent, page 247.
97. onto a rooftop: Bakes 6/16/94 interview.
98. Cable News Network: Ibid.
99. couldn’t “imagine”: Quoted in “A Boss They Love to Hate,” by John Schwartz, Erik Calonius, David I. Gonzalez, and Frank Gibney, Jr., Newsweek, Mar. 20, 1989.
100. “build the company”: Quoted in “Peripheral Collective Bargaining at Eastern Airlines,” by Kenneth Jennings, Transportation Journal, Spring 1990.
101. meeting in New York: Bakes 9/7/93 interview.
102. 100 cents: Robinson, Freefall, page 59.
103. infuriating Crandall: Reed, American Eagle, page 250.
104. 70 boxes: Baker 4/23/93 interview.
105. “complete shambles”: Crandall 4/23/93 interview.
106. most profitable piece: Olsen 9/2/93 interview.
107. “Frank factor”: Plaskett 8/31/93 interview.
108. “last nickel”: Bakes 6/11/93 interview.
109. “Any means”: Burr 9/16/93 interview.
110. “If I were you”: O’Donnell 6/9/94 interview.
111. five … repayment schemes: “Creditor Group Seeks Trustee for Eastern Air,” by Bridget O’Brian, WSJ, Apr. 11, 1990.
112. “no longer tolerate”: Quoted in Ibid.
113. plundered Eastern: “Report of the Examiner,” In the Matter of Ionosphere Clubs, Inc., U.S. Bankruptcy Court, Southern District of New York, Mar. 1, 1990.
114. “smacking of fraud”: Quoted in “Answer of the Air Line Pilots Association,” Application of Friendship Airlines, Inc., U.S. Department of Transportation, Docket 48723, Apr. 26, 1993.
115. “outstanding job”: Quoted in “Ruling Lorenzo Team ‘Incompetent,’ Judge Orders Trustee to Run Eastern,” by James T. McKenna, Aviation Week, Apr. 23, 1990.
116. “issue in reality”: “Examiner’s Analysis,” Mar. 1, 1990.
117. burned up $1.2 billion: Cited in “Answer of the Air Line Pilots Association,” Apr. 26, 1993.
118. pay phone: Bakes 6/16/94 interview.
119. establishing a foothold: SAS had previously purchased an interest in Texas Air and established a joint marketing arrangement with Continental.
120. once reckoned: Murray 9/4/93 interview.
121. Texas Air joined Continental: By the time it had filed for bankruptcy, Texas Air has been renamed Continental Airlines Holdings, Inc.
122. “We can say to them”: Crandall videotaped presentation to new captains, Facing Crucial Issues, Mar. 15, 1994. When passenger demand is strong and flights are selling out, American has the power to restrict the assignment of seats. Favored travel agencies can be rewarded with special treatment at such times.
Chapter 16: “To Fly, to Serve”
1. remained decidedly imperial: “Nostalgia Is Not What It Was!” by Capt. Laurie Taylor, Air Line Pilot, Nov. 1992.
2. separate computer … system: A. Reed, Airline, page 134.
3. gentleman’s airline: A. Reed, Airline; Campbell-Smith, The British Airways Story.
4. “management by consent”: Wheatcroft 2/24/94 interview.
5. a drab, depressing place: Marshall 3/1/94 interview.
6. sailed 21 voyages: Campbell-Smith, The British Airways Story, page 82.
7. as he would later suggest: Interview with Marshall in BA News, Jan. 21, 1983.
8. then in Toronto: Marshall’s titles and assignments through the years are drawn in part from the British Who’s Who, published by A&C Black, London.
9. a pan-European market: Marshall’s view of Hertz’s evolving European market was described by Frank Olson, who ultimately became the chairman of Hertz, as well as by Marshall himself. Olson 6/28/94 interview; Marshall 3/1/94 interview.
10. “fiefdoms”: Marshall 3/1/94 interview. Marshall also discussed his Hertz years in “Managing Across Borders,” by Joan M. Feldman, Air Transport World, June 1, 1992.
11. get lost: Marshall 3/1/94 interview.
12. barely a dozen: Marshall 3/1/94 interview.
13. dirty knuckles: James 6/20/94 interview.
14. free cars: This and other questionable practices are detailed in an amendment to a Form S-8 registration statement filed by Avis, Inc., with the SEC in Nov. 1976.
15. “a paste jewel”: James 6/20/94 interview.
16. secret file: James 7/1/94 interview.
17. “ambition was tickled”: Morrow 3/7/94 interview.
18. “improper” … payments: Details of the audit committee report to the SEC are included in the amendment to Avis’s SEC Form S-8.
19. attention of the SEC: The existence of an investigation by the SEC was confirmed by the SEC in a response dated Sept. 6, 1994, to a Freedom of Information Act request submitted for this book. In addition, the fact of the investigation was reported in “Avis Inc. Discloses $470,958 Payment Studied by the SEC,” WSJ, May 3, 1977. Marshall, in the 3/1/94 interview, said, “I don’t recall an SEC investigation.” He subsequently declined to discuss the matter whatsoever. Morrow discussed the payment in the 3/7/94 interview. Additional details are reported in the amendment to Avis’s SEC Form S-8. The Italian tax payment was first publicly revealed in “Audit Aftermath: Avis’s Payoff Inquiry Has a Lingering Effect as Questions Remain,” by Priscilla S. Meyer, WSJ, Mar. 15, 1977.
20. reached any government officials: Amendment to Avis’s SEC Form S-8.
21. “confidence in Mr. Marshall”: “Avis’s Trustee Endorsed President, Chief Officer,” WSJ, Mar. 28, 1977.
22. “deep odor”: Morrow 3/7/94 interview.
23. prosaic brands: Marshall 3/22/94 interview.
24. complaining to others: Olson 7/11/94 interview.
25. Gravely unhappy: Ibid.
26. “like to be the chairman”: Marshall 3/1/94 interview.
27. time traveling: BA News, Jan. 21, 1983.
28. When his old boss at Avis … heard: Morrow 3/7/94 interview.
29. vaguely noble: Campbell-Smith, The British Airways Story, page 25.
30. hunted in Leicestershire: “Co-Pilots on a
Private Flight,” by Arthur Reed, Industry Week, Jan. 23, 1984.
31. attacked … with abandon: A. Reed, Airline, pages 40-41.
32. like an archaeologist: The description of Marshall’s state of mind as he joined British Air is based on interviews with Marshall; on the text of the Royal Aeronautical Society R. J. Mitchell Lecture given by Marshall on Mar. 4, 1992; on an account written by Marshall and published in NYT on Sept. 19, 1988; and on extensive comments by Marshall in Corke, British Airways: The Path to Profitability.
33. internal politics: Marshall, Times, Sept. 19, 1988.
34. “morale outweighs matériel”: Ibid.
35. “Putting People First”: The courses were described in interviews with Marshall and other British Air employees; various editions of BA News; and Corke, British Airways, pages 113-16.
36. groaning and shrugging: Marshall 3/1/94 interview.
37. “there will be a businessman”: Comments of Dr. Nick Georgiades, British Air’s director of human resources, in Corke, British Airways, page 114.
38. “Caledonian girls”: Coltman 3/17/94 interview.
39. emphasis … on youth: Campbell-Smith, The British Airways Story, page 148.
40. requirements … were reduced: A. Reed, Airline, page 80.
41. “grooming room”: BA News, June 22, 1984.
42. “look right”: Ibid.
43. “warmth of the welcome”: Quoted in Sampson, Empires of the Sky, page 281.
44. same design firm: James 6/20/94 interview.
45. horrible and garish: “British Pride Hurt in BA’s Color Change,” Airline Executive, Jan. 1985.
46. Marshall instructed: Marshall 3/22/94 interview.
47. would be three classes: Detailed in Batt 3/2/94 interview.
48. British Airways suffered: The account of terrorism’s cost to British Air and the company’s marketing response is based on Harvard Business School Case No. 9-589-089, as well as on interviews with company officials and contemporaneous press coverage.
49. American behavior: Marshall 8/31/94 interview.
50. 15 percent more revenue: Batt 3/2/94 interview.
51. American picked up: American had also briefly served Europe in the C. R. Smith era. The evolution of American’s international strategy was detailed in interviews with Crandall, Carty, Olsen, and G. Arpey, and is described in “Competitive Anger” by Suzanne Loeffelholz, Financial World, Jan. 10, 1989.
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