Frank Lorenzo Working to Land Another Airline : Aviation: The former Texas Air Corp. chief is forming Friendship Airlines, but unionists want him barred.

Frank Lorenzo’s knees won’t let him run any more marathons. But the 1980s entrepreneur of deregulated aviation, vilified by labor as a union buster, is determined to show he can run a profitable airline in the 1990s.

Lorenzo, 53, is trying to get back into the business after a nearly three-year absence. He’s putting together Friendship Airlines, one of several puny carriers that have popped up lately with cut-rate tickets.

In the current climate of cutbacks and shrinkage by the biggest airlines, finding cheap jets and skilled labor looks like the easy part. Outrunning union taunts about his history may prove Lorenzo’s toughest race.

Labor leaders are challenging his application for a flying permit from the federal government. The effort is reminiscent of their attempts to discredit and oust Lorenzo when he ran Eastern and Continental airlines under the umbrella of Texas Air Corp., once the nation’s biggest airline operator.

Unionists say Lorenzo should be barred from the industry because of maintenance shortcuts by Eastern mechanics while he was in charge and because of claims that he strengthened Continental by siphoning assets from Eastern.

Even if Friendship Airlines gets off the ground, the Air Line Pilots Assn. plans to picket.

Lorenzo says the unions have concocted a misleading image of him as a destroyer.

“This is the basic plan they’ve had,” Lorenzo said in an interview. “I’m not afraid of them, and the American public is very smart and will see through this.”

The unions say Lorenzo shares blame for the heavy debts in the airline industry that made several carriers so weak today.

“Nobody won who was associated with Frank, except Frank,” said Don Skiado, communications director of the pilots union. “He’s going to come back, create more losers and leave.”

Nobody disputes Lorenzo will run an airline with low costs. With so many idle jets and unemployed airline workers out there, Lorenzo says this is a good time to try.

“Watching what was happening to air transport, it kept gnawing at us as an obvious opportunity,” Lorenzo said.

DC-9 jets like those Lorenzo plans on using can be leased for about $30,000 a month, down more than 70% from two years ago, the aviation consulting group Avmark Inc. says.

Pilots can be hired for about $65,000, versus the $100,000 that big carriers pay veteran fliers.

Friendship, 77% owned by Lorenzo and his family, plans to rent two jets and offer cheap fares to attract people who otherwise wouldn’t fly.

Lorenzo said Boston, Washington and Orlando will likely be Friendship’s initial flying points. But he’s also interested in Atlanta, Philadelphia and Hartford.

Despite his burst of entrepreneurial spirit in what remains a largely anemic industry, Lorenzo can’t seem to shake other people’s memories of how he ran Eastern and Continental.

Twenty-one House members wrote to Transportation Secretary Federico Pena urging him to block Lorenzo’s comeback. The lawmakers cited his management record in claiming that he is not fit to operate another airline.

“I don’t think a lot of people take him seriously,” said Bob Iverson, an 18-year pilot at Eastern who now runs Kiwi International Air Lines, another tiny carrier that’s sprouted recently.

“He has no credibility with anybody.”

Martin Shugrue, an industry veteran appointed by the Federal Bankruptcy Court to run Eastern after creditors forced Lorenzo out, says his strength has always been assembling investors.

“He certainly had his problems managing,” Shugrue said.

Lorenzo doesn’t plan on managing, but won’t be passive either.

“Too many people are quick to say Eastern didn’t work out because he’s a poor manager,” Lorenzo said. “I can run circles around people who think they’re great managers with a good tail wind.”

Lorenzo lays much of the blame for Eastern’s troubles on his predecessor, former astronaut Frank Borman. Eastern had lost enormous amounts of money and created a history of bad labor relations with workers before Lorenzo bought the airline in 1986.

But Lorenzo was off to a bad start with the company’s unions anyway because of his own history. They knew him as the notorious owner of Continental Airlines, which he had thrown into bankruptcy court years earlier, scrapped union contracts and drastically reduced labor costs.

In hindsight, Lorenzo said he tried to do too much too fast at Eastern. He said he erred in trying to take on all the unionized workers instead of first making a deal with the machinists, who were by far the most militant.

Friendship Airlines will be different in a number of ways besides its puny size. For example, Lorenzo plans to give employees a stake in the company through a profit-sharing plan as a way to encourage quality service.

“We’re starting off with people whose expectations are right where Friendship is. We’re not asking for concessions, not asking to cut back this and cut back that. There’s no history. No baggage,” he said.

But the unions opposing Lorenzo say there is too much bad blood, too much baggage.

Under his rein, Eastern falsified some maintenance records to maintain on-time performance. It later pleaded guilty to criminal charges, though Lorenzo was never implicated.

Lorenzo said he never condoned such cheating. The unions say it was part of the cost-cutting culture he imposed.