Former TWA President Named Chief at Continental

D. Joseph Corr, former president of Trans World Airlines, on Tuesday was named chairman and chief executive of Continental Airlines, raising speculation about the motives behind the move.

Continental is owned by the Texas Air holding company, and Corr replaces Frank Lorenzo, Texas Air’s chairman, who had also been holding the top job at the Continental subsidiary.

Corr, a close associate of financier Carl C. Icahn, had resigned from Icahn’s Trans World Airlines only last month. At that time, Corr said he intended to purchase a company in which Icahn expected to be an investor.

Analysts speculated Tuesday that there may be some connection between Corr’s continuing close relationship with Icahn and his new job at Houston-based Continental--perhaps that Icahn is interested in acquiring Continental. However, in an interview, Corr vehemently denied that such a tie exists.

Icahn has said recently that he is interested in buying another airline because TWA badly needs more new airliners as well as additional domestic routes to feed passengers into its international network.

Texas Air also owns troubled Eastern Airlines, which has been feuding with its labor unions. Leaders of the unions have charged that Lorenzo is shifting Eastern’s assets into non-union Continental. Icahn is known to have talked with Lorenzo about Eastern, but the talks have been broken off.

Louis Marckesano, airline analyst with the Philadelphia brokerage house of Janney Montgomery Scott, said: “Corr is Icahn’s right-hand man,” and “there might be something down the road with Texas Air. It might be that Icahn has put a Trojan horse into Texas Air, and he might be playing footsie with Lorenzo.”

But Corr said “there is absolutely no linkage whatsoever” between his appointment and his connection with Icahn. Since leaving TWA’s presidency, Corr has continued as a member of the TWA board of directors, but he said Tuesday that he will resign that post.

In his announcement, Lorenzo said Corr’s appointment “emphasizes Texas Air’s commitment to managing our airlines separately, and it will allow me to devote all of my time to Texas Air activities.”

Lorenzo said Corr is a “superb manager who has improved the performance of several companies. He understands the airline business, and we are confident that he will build on the progress that has been made at Continental.”

During his tenure at TWA, Corr was credited with turning the airline’s finances around. When he became president in 1986 it was near bankruptcy, but it is now making money. He did the same at ACF Industries, a manufacturer of specialized railroad cars, in which Icahn also invested. Corr served in various capacities at ACF and was its president from 1984 to 1986.

Corr said in the interview that his main focus at Continental will be on improving the airline’s service and profitability.

Martin R. Shugrue remains as president of Continental.