Labor Day Comes Early as Lorenzo Bails Out : Business: The bane of unions at Eastern and Continental sells his interest in an airline holding company to SAS.

Frank Lorenzo, a central figure during a tumultuous period in the airline industry and the bane of organized labor, announced today he was getting out of the business.

Lorenzo’s Continental Airlines Holdings Inc. said he was selling most of his stake in the company, formerly known as Texas Air Corp., to Scandinavian Airlines System and would quit as chairman and chief executive.

His departure marks the end of an era in the U.S. airline industry, which has undergone sweeping changes since deregulation more than a decade ago.

Using cheap fares, bankruptcy laws and billions of dollars in borrowed money to restructure high-cost airlines Continental and Eastern, Lorenzo expanded his company to the nation’s biggest airline operator with about 20% of the domestic market.

But Lorenzo has been bitterly criticized by airline unions, which were driven from Continental and waged a bitter strike at Eastern.

Both airlines are under extreme financial pressure, and doubts are widespread about Eastern’s ability to survive.

Lorenzo, 50, said he will be replaced as chief executive by Hollis L. Harris, president of rival Delta Airlines. He called Harris “one of the industry’s most experienced and highly regarded executives.”

Delta confirmed today that Harris, 58, left the company, effective Wednesday, to assume a position with Continental. Delta said Ronald W. Allen, its chairman, would take on Harris’ duties.

The Wall Street Journal quoted industry sources as saying Lorenzo didn’t want to sell his stake, but he believed his continued association with the company and criticism of his operating style were hurting its performance.

Lorenzo will walk away with about $17 million from the deal, a fraction of what he was worth a few years ago when his airlines were in better shape.

SAS, which first bought a stake in Lorenzo’s business a few years ago, said it was spending $50 million on the transaction, which already has been approved by Continental Holdings’ board of directors.

Lorenzo became one of the most despised figures among union groups in the 1980s because of what they called his brutal treatment of organized labor.

The most dramatic result: a strike at Eastern Airlines in March, 1989, that prompted the carrier to seek Chapter 11 bankruptcy court protection from creditors while it reorganized.

Lorenzo lost control of Eastern in April when federal bankruptcy Judge Burton Lifland placed the airline in the hands of a trustee, Martin Shugrue.

Following that move, Lorenzo’s company changed its name from Texas Air to Continental Airlines Holdings.