Texas Air to Launch New Carrier for Western U.S.

Texas Air Corp. said Wednesday that it plans to launch a full-service airline based in Los Angeles. The new carrier, to be called Continental West Airlines Inc., will debut in June and offer high-frequency, low-fare passenger and cargo service in the Western United States.

Texas Air said its new subsidiary will have its own management team but will be operated under a joint marketing arrangement with Texas Air’s existing subsidiary, Houston-based Continental Airlines, which will also provide certain airport facilities, services and personnel to the new carrier. Continental West will have six new Boeing 737-300s, according to the announcement.

William Moran, vice president of public relations for Continental Airlines, said it was too early to say how many new workers would be hired by the new airline. He also would not reveal what routes the new carrier would fly.

However, industry sources said that initially the new airline would fly between Los Angeles and Las Vegas, Reno and San Francisco. Continental now flies between Los Angeles and Denver and Houston, the airline’s principal hubs where passengers may connect with flights to 70 other destinations. It also makes one daily flight between Los Angeles and San Francisco and one to Honolulu.

Earlier this week, a bankruptcy judge allowed Contintental, which is an 85% owned subsidiary of Texas Air, to proceed with the acquisition of four new B-737s but held up the acquisition of 14 more planes until the carrier showed several more profitable quarters.

Continental, which had declared bankruptcy in 1983, is now solidly in the black. In 1984, it had net earnings of more than $50 million. Texas Air, which will own 100% of the new airline, also owns 70% of New York Airways.

Moran said Sheldon Best, former chief operating officer of Air Cal hired last fall to plan the new carrier, will be general manager of Continental West.