(Updated Oct. 15, 2016 – 2:26pm EDT)
MIAMI — Seasoned airline executive Ed Wegel has left his position as President and CEO of Eastern Air Lines, less than 18 months after the carrier’s first flight in May 2015. He has been replaced by the airline’s Chief Financial Officer, James Tolzien. Though the airline has not issued a statement, the news of Wegel’s departure has been confirmed by multiple internal sources.
2016 has been a tumultuous year for senior leadership shakeups in the U.S. airline industry. Spirit, Delta, United, American, and now Eastern have witnessed significant changes in the C-Suite.
“I don’t understand the leadership change. It’s not clear that the CFO has the sort of airline operating experience that Wegel brought,” remarked noted airline analyst Robert W. Mann. Similar concerns had been levied against United’s CEO Oscar Munoz who lacked airline experience but bought in experienced operational executives like Scott Kirby to buoy his ranks.
The reasons behind Wegel’s departure from the privately held airline have not been disclosed, though a number of people have said he was forced out. Questions behind the airline’s business plan viability could be a factor. While Eastern has been successful in the sports and charter markets, especially to Cuba, where it serves six cities, it is now under pressure as U.S. airline scheduled flights have begun with over-capacity setting in as well.
There are also rumblings of issues resulting from the now delayed Mitsubishi MRJ ordered the affects of the scope clause on its eventual operational success. Some are saying this order could be in jeopardy.
“Eastern is facing its next challenges: defending its US-Cuba charter niche, suddenly awash with scheduled capacity (it applied for but was not awarded for scheduled service in the first rounds of awards), finalizing its scheduled domestic/flag service application (FAA operational/safety and DOT financial fitness), and dealing with delays to its smaller jet (MRJ) fleet plan,” says Mann.
Wegel is a popular leader among many of the airline’s current employees and those of the original Eastern, having been the driving force behind the airline’s relaunch since the dark days of the 2008-09 recession when planning began. He succeeded in finally bringing The Great Silver Fleet back to Miami in December 2014. Wegel is particularly known and appreciated for his support of Eastern’s Veteran’s Honor Flights. He served five years active military service as an Army officer in the U.S. and Europe.
Since the story broke, there has been numerous showings of support of Wegel in social media with one post mentioning “Ed has been the driving force behind this airline. I’m saddened to hear this.” Other comments have begun to crop up expressing concern about the carrier ranging from “News like this is never good” to “Hear we go again.”
Prior to joining Eastern as CEO, Ed Wegel had many years experience in the airline and in investment banking industries. Wegel was Director of Finance for the original Eastern and a Director of Operations for Pan American from 1985 to 1987. Subsequent senior leadership positions included Mesa Air, Chautauqua, Mesa Air Group, Tower Air, Atlantic Coast, Tower Air, and Chairman / CEO of Travelogix.Incoming CEO James Tolzien has extensive senior executive credentials at TraveLeaders, Alamo, and Budget Rental Car, as well as in private equity.
Under Wegel’s leadership, Eastern achieved what many thought impossible: Certification in eight months, five aircraft in eight months, their own simulator, building their own 25 M hangar, and an extensive sports charter operation including flying the San Francisco Giants and Florida Panthers. One of the airline’s 737’s is also chartered as the campaign plane for Trump / Pence Presidential ticket.
These efforts seem to be paying off especially for its sports charter customers. “Eastern is demonstrating the exceptional reliability (completion and on-time) required by professional and university sports team charters. There may be more of that year-round activity out there to be monetized,” notes Mann.
To date, the airline operates charters to the Caribbean and Latin America, including Cuba, The Dominican Republic, Venezuela, Costa Rica, Panama, Guyana and Haiti.
Sources within the company, however expect “a major move into San Juan next month and Los Angeles-Nassau charters moving to scheduled service with interline agreements with Air China and Korean.”
Clearly, The U.S. Department of Transportation (DOT) opting to defer the carrier’s petition to serve scheduled routes from Miami to Camaguey and Holguin was a setback. Eastern’s current operating authority limits it to providing charter flights only.
Eastern Air Lines Group, Inc. is not affiliated with the former Eastern Air Lines, which operated from 1928 to 1991 as one of the largest U.S. domestic air carriers. The new group was formed to re–launch Eastern as a passenger airline, using five Boeing 737-700/800 from its base at Miami International Airport (MIA). The carrier has orders for ten 737 MAX aircraft and 20 Mitsubishi MRJ-90 aircraft.
This week, the airline is expected to receive its first new Boeing 737-800, N283EA on lease from ALC.
Eastern’s headquarters is located in Building 5A at MIA. The building used to house the system and maintenance control centers of the original airline.
Whether this turmoil is just a patch of rough air or a precursor to more serious turbulence for the airline of the WhisperJets, only time will tell.