In 1963, Continental hired the first black pilot to work for any major carrier in the United States, Marlon Green, after a United States Supreme Court decision allowed a Colorado anti-discrimination law to be applied to his case. 

Acquisition by Texas Air Corp. 

In 1981 Texas Air Corporation, an airline holding company controlled by U.S. aviation entrepreneur and raider Frank Lorenzo, acquired Continental after a contentious battle with Continental's management who were adamantly determined to resist Lorenzo. Continental's labor unions also fiercely resisted, fearing what they termed as, "Lorenzo's deregulation tactics." In the end, Texas Air Corp. prevailed. Frank Lorenzo became Continental's new Chairman and CEO. Texas International Airlines (TI), another Lorenzo holding, was merged into Continental Airlines in June 1982. TI ceased to exist and the "new Continental" relocated its headquarters to Texas Air's base in Houston, Texas. The merger resulted in a large expansion of Continental's hub at Houston Intercontinental Airport and its extensive routes to Mexico. Airline unions fought Continental at every step. In the Federal courts, they unsuccessfully sued to stop the company's reorganization. They were successful in working to persuade Congress to pass a new bankruptcy law preventing bankrupt companies from terminating contracts as Continental had successfully done. The law was too late to affect Continental and the drastic cost cutting and changes that had rescued it from liquidation. 

First bankruptcy

Frank Lorenzo took Continental into Chapter 11 bankruptcy in September 1983 after extensive negotiations with labor unions proved unsuccessful. Continental imposed a series of new labor agreement on its union workers, sharply reducing the airline's labor costs. This move made Continental vastly more competitive with the new airline startups then emerging and thriving in the southwestern U.S. Much of the airline was liquidated and the company was rebranded as a low-cost carrier. Continental was also forced to abandon its hub in Los Angeles although it maintained its Denver and South Pacific routes. A more streamlined, leaner Continental emerged only a few days after the bankruptcy filing, a fact which gave Continental the distinction of being the first airline to fly through bankruptcy. 

Rapid growth through consolidation

In October 1983, Texas Air Corp. made an offer for a Denver-based regional carrier, Frontier Airlines, opening a bidding war with People Express, which was headed by Lorenzo's former TI associate Don Burr. PeopleExpress paid a substantial premium for Frontier's high-cost operation. The acquisition, funded by debt, did not seem to industry observers be rational from either the route integration or the operating philosophy points of view, but was in the opinion of most industry analysts rather an attempt by Burr to best his former boss, Frank Lorenzo. In June 1985, Continental rebounded as signaled by a major strategic move: initiating European service with flights from Newark and Houston to London. On August 24, 1986 Frontier filed for bankruptcy and ceased operations. With PeopleExpress hemorraging cash, Texas Air acquired PeopleExpress on September 15, 1986, at the same time gaining Frontier, which reinforced Continental's already formidable Denver hub. The PeopleExpress hub at Newark allowed Continental to expand its east coast services dramatically for the first time in its history; and the carrier soon became the third-largest airline in the U.S.. Continental emerged from bankruptcy in 1986 with dramatically improved asset and cash flow positions and a much more competitive route structure with routes radiating to every large U.S. city from major hubs at Denver, Newark and Houston. On February 1, 1987, People Express, New York Air, and several commuter carriers were merged into Continental Airlines to create the sixth largest airline in the world. 1987 also saw the creation of the OnePass frequent flier program (jointly with Eastern Airlines), and in 1988 Continental formed its first strategic partnership (and the first international airline alliance of its kind with SAS.  

Second bankruptcy

In 1990, Frank Lorenzo retired after 18 years at the helm of Texas International and later Texas Air and Continental Airlines, selling the majority of his Jet Capital Corporation to Scandinavian Airlines System (SAS). According to William F. Buckley, in his September 17, 1990 article on National Review, the sale to SAS was conditioned on Lorenzo leaving the company. Shortly after Lorenzo left Continental, the airline filed for its second bankruptcy inside of a decade. There were a number of circumstances behind the second bankruptcy, most importantly: Lorenzo had dedicated himself almost full time to Eastern Air Lines acquisition and labor relations issues; the 1990 Iraqi invasion of Kuwait and the resultant Gulf War had prompted a dramatic increase in the price of jet fuel; and People Express had also been highly leveraged at the time of its merger with Continental, having purchased Frontier Airlines just two years before. In addition to Lorenzo embarking on deals which saddled the airline with other carriers' debts, he also began consolidating the different airlines into one system. That resulted in a fleet comprising numerous aircraft types, evident in the array of liveries in the Continental fleet for years to come. In the late 1980s, following a dramatic reduction of service by United Airlines and an unsuccessful attempt by USAir to build-up point-to-point service, Continental slowly moved into Cleveland Hopkins International Airport and established what would become its third-largest system hub. Continental quickly gained nearly all of the gates in the airport's C concourse (once dominated by United), and later expanded that concourse in addition to constructing an entirely new Concourse D. In 1993 Air Canada, along with Air Partners and Texas Pacific Group, aided Continental in coming out of chapter 11 once again by investing $450 million in the airline. Under the leadership of former Boeing executive Gordon Bethune, who became President in October of 1994, Continental subsequently ordered new aircraft in an effort to convert to an all-Boeing fleet. The airline's Denver hub - its historic operational base and headquarters for, in effect, almost 50 years - was reduced to spoke status (with service only to Houston, Newark, and Cleveland) in a further efficiency measure in 1995. Bethune also launched a 'Go-Forward Plan', designed to fix numerous other problems with the airline. His experiences were chronicled in his 1999 book From Worst to First.