In 1975, Eastern was headquartered at 10 Rockefeller Plaza in New York City. After Frank Borman became president of Eastern Air Lines in 1975, he moved Eastern's headquarters from Rockefeller Center to Miami-Dade County, Florida.
Eastern's massive Atlanta hub was in direct competition with Delta Air Lines, where the two carriers competed heavily to neither's benefit. Delta's less-unionized work force and slowly expanding international route network helped lead it through the turbulent period following deregulation in 1978.
In 1980, a Caribbean hub was started at Luis Muñoz Marín International Airport (known at the time as "Isla Verde International Airport") near San Juan, Puerto Rico. In 1982, Eastern acquired Braniff's South American route network. By 1985, Eastern was the largest IATA airline in terms of passengers and operated in 26 countries on three continents.
During this era, Eastern's fleet was split between their "silver-colored hockey stick" livery (the lack of paint reduced weight by 100 pounds) and their "white-colored hockey stick" livery (on its Airbus-manufactured planes, the metallurgy of which required paint to cover the aircraft's composite skin panels).
In 1983 Eastern became the launch customer of Boeing's 757, which was ordered in 1978. Borman felt that its low cost of operation would make it an invaluable asset to the airline in the years to come. However, higher oil prices failed to materialize and the debt created by this purchase coupled with the Airbus A300 purchases in 1977 contributed to the February 1986 sale to Frank Lorenzo's Texas Air. At that time, Eastern was paying over $700,000 in interest each day before they sold a ticket, fueled, or boarded a single aircraft.
Starting about 1985, Eastern offered "Moonlight Specials", with passenger seats on overnight flights scheduled for cargo from thirty freight companies. The flights, which operated between midnight and 7 am, stopped at 18 cities in the United States. Eric Schmitt of The New York Times said that the services were "a hybrid of late-night, red-eye flights and the barebones People Express approach to service." The holds of the aircraft were reserved for cargo such as express mail, machine tool parts, and textiles. Because of this, the airline allowed each passenger to take up to two carry-on bags. The airline charged $10 for each checked bag, which was shipped standby. The airline charged between 50 cents and $3 for beverages and snacks. Bunny Duck, an Eastern flight attendant quoted in The New York Times, said that the passengers on the special flights were "a cross section of families, college kids, illegal aliens and weirdos from L.A.".
Eastern began losing money as it faced competition from no-frills airlines, such as People Express, which offered lower fares. In an attempt to differentiate itself from its bargain competitors, Eastern began a marketing campaign stressing its quality of service and its rank of highly experienced pilots.
Sale to Texas Air
Unable to keep up, Borman agreed to the sale of the airline in 1986 to Texas Air, led by Frank Lorenzo. Lorenzo (who was named as one of Time's 10 "worst bosses of the century") was known as a ruthless corporate raider and union buster. He had already purchased Continental Airlines and lost a bidding war for TWA to Carl Icahn.
In February 1987, the Federal Aviation Administration imposed a $9.5 million fine against Eastern Air Lines for safety violations, which was the largest fine assessed against an airline until American Airlines was fined $24.2 million in 2010.
In 1988, Phil Bakes, the president of Eastern Air Lines, announced plans to lay off 4,000 employees and eliminate and reduce service to airports in the Western United States; he said that the airline was going "back to our roots" in the East. At the time, Eastern was the largest corporate employer in the Miami area and remained so after the cuts. John Nordheimer wrote in a The New York Times article that the prominence of Eastern in the Miami area decreased as the city became a finance and trade center and as the area had a population increase-based economic growth, instead of a purely tourism-based growth.
During Lorenzo's tenure, Eastern was crippled by severe labor unrest. Asked to accept deep cuts in pay and benefits, on March 4, 1989, Frank Lorenzo locked out Eastern's mechanics and ramp service employees, represented by the International Association of Machinists and Aerospace Workers (IAM). Concerned that if Lorenzo was successful in breaking the IAM he would do the same to the pilots' and flight attendants' unions, the pilots represented by Air Line Pilots Association (ALPA) and flight attendants represented by the Transport Workers Union (TWU) called a sympathy strike. Those actions effectively shut down the airline's domestic operations. Non-contract employees, including airport gate and ticket counter agents and reservation sales agents, did not honor the strike. Due to the lockout and sympathy strike, cancelled flights resulted in the loss of millions of dollars in revenue.
In 1989, Lorenzo sold Eastern Air Lines Shuttle to real estate magnate Donald Trump (who named it the Trump Shuttle) while selling other parts of Eastern to his Texas Air holding company and its subsidiary, Continental Airlines, at terms disadvantageous to Eastern. In 1989 George Berry, the Georgia Industry and Trade Commissioner, asked Eastern to consider moving its headquarters from the Miami area to the Atlanta area.
As a result of the strike, weakened airline structure, high fuel prices, inability to compete after deregulation and other financial problems, Eastern filed for bankruptcy protection on March 9, 1989. This allowed Lorenzo to continue operating the airline with non-union employees. When control of the airline was taken away from Lorenzo by the courts and given to Marty Shugrue, it continued operations in an attempt to correct its cash flow, but to no avail.
The airline stopped flying at midnight Saturday, January 19, 1991. On the previous evening company agents, unaware of the decision, continued to take reservations and told callers that the airline was not closing. Following the announcement, 5,000 of the 18,000 employees immediately lost their jobs. Of the remaining employees, reservation agents were told to report to work at their regular times, while other employees were told not to report to work unless asked to do so. The Eastern shutdown eliminated many airline industry jobs in the Miami and New York City areas.
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