People Express Price Cut Sought

From Reuters

Texas Air Corp., which has become the nation’s largest air carrier through acquisitions, said today it was negotiating to reduce the $125-million price it would pay for troubled People Express because of “the worsened financial condition of People Express.” Texas Air has also asked People Express creditors to accept lower interest rates on the debt they hold.

An airline analyst said the move was a tightening of the screws by Texas Air’s Chairman Frank Lorenzo on People Express and its creditors. He said there was probably little choice but to accept any changes wanted by Lorenzo.