Word: braniff
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...year to the day after bankrupt Braniff International Corp. ceased flying, Chairman Howard D. Putnam, 45, last week announced that the airline hopes to be back in the skies this fall. After weeks of dickering, Hyatt Corp., the Chicago-based hotel chain, agreed to put up as much as $70 million in exchange for 80% of Braniffs stock. With luck, Braniff could return to service...
...Braniff was a casualty of the airline industry's deregulation. As soon as the Government in 1978 opened the way for carriers to fly to virtually any destination, Braniff added thousands of miles to its route network. But its planes were soon flying empty to far-flung destinations, and the airline was piling up $1 billion in debt...
...deal with Hyatt was originally suggested by two of Braniff's retired pilots. When efforts to find someone to rescue the airline dragged, they pitched the idea to Hyatt Chairman Jay Pritzker, 60, who calculated that Braniff's hefty losses before going bankrupt could be worth some $300 million in tax credits to Hyatt. The agreement was completed just in time. The clock was due to run out on Braniff's flying future this week, and the company would have been turned into a small-aircraft maintenance firm...
...Braniff will not be nearly as grand as the old one, but it may have a better chance of making money. At its peak, Braniff employed 15,000 workers and flew to 42 cities. Under the Hyatt plan, Braniff will rehire about 2,000 former employees and resume service to 20 cities. The airline will have only 30 planes, compared with 123 previously...
...question hanging over the Hyatt deal is approval from Braniff's secured creditors, who are owed $467.5 million and hold liens on the company's planes. They have been skeptical of reorganization efforts and had intended to begin repossessing the aircraft this week. If creditors reject the agreement, Braniff could face a court battle. Whatever happens, Braniff Chairman Putnam will not be around to run the born-again company. He repeated last week that he plans to quit his job by this fall...