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AIRLINE EXECUTIVE AND AUTHOR OF NEW BOOK ON EASTERN AIRLINES SUGGESTS THAT THREE MAJOR BANKRUPT CARRIERS SHOULD MERGE

 AIRLINE EXECUTIVE AND AUTHOR OF NEW BOOK ON EASTERN AIRLINES
 SUGGESTS THAT THREE MAJOR BANKRUPT CARRIERS SHOULD MERGE
 FORT LAUDERDALE, Fla., June 19 /PRNewswire/ -- In a speech given today at the Broward Forum, a South Florida business organization, Jack E. Robinson, president of Florida Air and author of a new book on Eastern Airlines, suggested that Continental Airlines, America West Airlines, and Trans World Airlines should all merge and simultaneously end their respective bankruptcy proceedings.
 Robinson said that a legal and financial analysis he recently performed shows that a merger of all three bankrupt carriers would result in a single viable entity and that a merger of all is very likely the last and best hope that each airline has to survive.
 Speaking at the meeting of South Florida business and political leaders, Robinson outlined his strategy on how a merger of the three bankrupt carriers would occur.
 "First, the advisors for the creditors' committees of all three carriers should sit down together and hammer out a reorganization plan that calls for a tax-free exchange of stock and pooling of all creditors' claims. Second, creditors should accept stock in the new company as payment in full for the debts owed them by each airline. Third, an equity infusion of $250 million would be required to fund the plan of reorganization."
 As part of this plan, according to Robinson, creditors would receive 70 percent of the new airline's stock and the remaining 30 percent would be owned by the investors who provide the $250 million equity infusion.
 "The newly merged airline should operate as Continental because Continental is the largest and strongest of the three, has the best market position, and is the only one that has its own computer reservation system," Robinson said.
 The advantages of such a merger would be "phenomenal," according to Robinson, because each airline offers what the other two don't have and repetitive functions can be combined resulting in huge cost savings.
 "Continental provides a large domestic route system which can leverage TWA's remaining international routes while America West's problem of being too small a competitor is also solved by the addition of Continental's revenue stream."
 Robinson estimates that the new airline would have annual revenues in excess of $10 billion which would immediately catapult it to the fourth largest airline behind American, United and Delta. It would have hubs in Houston, Denver, Cleveland, Newark, New York-JFK, and St. Louis.
 Robinson suggests that capacity can be transferred from America West's Phoenix hub to Denver and from its newly-created Columbus, Ohio hub to Cleveland.
 "The result would be a unified competitor with $10 billion in annual revenues that would have geographically balanced hubs throughout the country as well as being the largest airline serving the New York metropolitan area."
 As for the $250 million equity infusion that would be required to fund the merger, Robinson claims that amount should not be difficult to raise. "How often does an investor get the chance to own 30 percent of a $10 billion airline for only $250 million?"
 In addition to being president of Ft. Lauderdale-based Florida Air and a New York bankruptcy attorney, Robinson is the author of the newly released book entitled "FREEFALL: The Needless Destruction of Eastern Airlines and the Valiant Struggle to Save It," published by HarperCollins. Robinson worked at Eastern as vice president of corporate development prior to the carrier's shutdown in January 1991.
 In his book, Robinson describes his attempt while at Eastern to spearhead a merger of Eastern and Pan Am in late 1990. "We had structured the deal and found investors willing to put up $400 million in equity. But the deal fell through at the last minute largely because Pan Am executives dragged their feet," said Robinson.
 Robinson says that his recent proposal for a Continental-TWA-America West merger is based on his work in structuring the aborted Eastern-Pan Am merger.
 -0- 6/19/92
 /CONTACT: Jack E. Robinson of Florida Air, Inc., 305-359-3606/ CO: Florida Air ST: New York IN: AIR SU:


SS-JB -- FL008 -- 2022 06/19/92 15:33 EDT
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Publication:PR Newswire
Date:Jun 19, 1992
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