(FORTUNE Magazine) – One day after the Air Line Pilots Association reached a tentative agreement to end its month-long strike against United Airlines, the union got another jolt when word got out that Texas Air had agreed to buy Trans World Airlines for $794 million. Texas Air, which is run by aggressive Frank Lorenzo and owns Continental Airlines and New York Air, topped a bid by Resorts International with an offer of cash and debt securities valued at $23 a share. The deal helps TWA escape the clutches of New York financier Carl Icahn, who owns almost 33% of the stock and who had offered $18 a share for the rest. Lorenzo brings to TWA the prospect of high profitability and labor turmoil. He took over Continental in 1982. A year later he declared the company bankrupt and proceeded to slash costs by voiding the union contract, reducing wages, and cutting the number of cities served. Less than a year later Continental was back in the black. With low fares and full service, Continental has become a force to reckon with among major airlines. Last November, United Chairman Richard Ferris told a group of security analysts he was ''more worried about Continental than People Express.'' Fresh from the wrestling match with Ferris, the pilots' union knows it has an even tougher opponent in Lorenzo. ''We know wherever he goes, he's going to take on the union,'' Henry Duffy, president of the Air Line Pilots Association, said. ''We're going to put on our armor and prepare to do battle.'' In the tentative agreement, United got a two-tier wage structure that will allow it to pay new pilots on a lower wage scale than they have now. United's concession to the union: the two-tier structure would be renegotiable after five years. Back-to-work issues, such as the status of 566 flight engineers trained as pilots during the strike, would be arbitrated by Federal District Judge Nicholas Bua in Chicago.