Business Notes AIRLINES

For the second time in seven years, a financial downdraft swept Continental Airlines into bankruptcy court last week. Faced with rising fuel costs and $2.2 billion of debt incurred under Frank Lorenzo, the airline's expansion- minded former boss, Continental filed for protection while it prepares a repayment plan. "We were just running out of cash," said chairman Hollis Harris, who vowed to maintain the airline's full schedule of flights.

The filing came as the nation's fifth largest carrier was beginning to win back customers with a better on-time performance and other improvements. Most passengers stuck with the airline. The real crunch may come next month when the peak season ends. "Once holiday price slashing is over, fares will have to increase," Harris said. "But to raise them at the rate necessary to offset the total increase in fuel prices would cripple business travel and all but obliterate pleasure travel." Harris must navigate such turbulence if he expects to fly Continental out of Chapter 11.