Published in September 2015 issue

24 years after its collapse, the iconic airline brand is back. Is it here to stay?

By Luis Linares

More than 24 years after its original namesake collapsed, with no announcement or fanfare, the iconic Eastern Air Lines brand has returned to the skies. On May 28, 2015, at 14:26 local time, flight 3145 departed Miami International Airport (MIA) for a 42-minute journey to José Martí International Airport (HAV) in Havana, Cuba. Flight 3146 was the return leg and landed back in Miami at 17:05.

The only things that marked this momentous occasion were a special flyby and a traditional water cannon salute.

It might seem that the choice of destination was linked to the recent thaw in relations between the United States and Cuba but, in reality, charter flights between Florida and various Cuban destinations have been around for almost 40 years. If anything, the current rapprochement between the two countries will inevitably lead to scheduled flights and probably threaten charter operations. The resurrected Eastern operated its maiden flight on behalf of MIA-based charter operator HavanaAir Company.

EA’s initial charters from MIA will consist of two daily flights to HAV and weekly service to Santa Clara (SNU) and Camagüey (CMW).

Two days after the first flight to Havana, flight 1941 departed Miami at 06:00 for Ronald Reagan Washington National Airport (DCA). Not only was this the airline’s first domestic flight, it also celebrated the veterans of World War II and of the Korean War living in South Florida, as part of a one-day ‘honor flight’ to the capital. The 60 veterans returned to Miami at 20:17 on the evening of May 30 aboard flight 1945.

Eastern conducted all these flights with its first aircraft, a 145-seat Boeing 737-800, registration N276EA, which had originally been delivered to Kenya Airways in 2006 with registration 5Y-KYB. The aircraft, named ‘Spirit of Captain Eddie Rickenbacker’ for the World War I hero and CEO of the original Eastern from 1938 to 1963, has 16 Business Class seats and 129 Economy ones.

The airline was to receive the second of 10 737s in June 2015, when it would also announce new charter destinations. Eastern is also scheduled to receive 20 Mitsubishi MRJ90 regional jets starting in 2019, with options for 20 more. The company also has options for 10 Boeing 737 MAX 8s, with deliveries scheduled for 2022.

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Eastern Air Lines (EA) traces its heritage back to September 15, 1927, to the founding of Pitcairn Aviation, an airmail carrier owned by Harold Pitcairn and based in Philadelphia. Air mail service from New York to Atlanta, via intermediate points, was inaugurated in May 1928, and extended that December to Miami.

In 1929, Pitcairn sold his airline to Clement Keys’ North American Aviation, a holding company that owned interests in several airlines and aviation enterprises. Pitcairn Aviation adopted the name Eastern Air Transport on January 15, 1930. World War I flying ace Rickenbacker served as general manager. The company inaugurated passenger service in 1930, with the twin-engine Curtiss Condor biplane as the mainstay of the fleet.

The Air Mail Act of 1934 authorized reawarding of government mail contracts to private carriers and established new rates for transporting mail. To meet the criteria for bidding on these contracts, Eastern Air Transport changed its name to Eastern Airlines. The company gained airmail authority extending northwest from Atlanta to Chicago and southwest from Atlanta to New Orleans, in addition to its original New York-Atlanta-Miami main line.

With the introduction of the Douglas DC-2 in 1934, Eastern’s public relations department began referring to the company’s airliners as ‘The Great Silver Fleet’. Eastern’s DC-2s were joined two years later by the workhorse of the airways, the DC-3. Rickenbacker and his associates bought Eastern Air Lines in 1938.

Between 1942 and 1945, Eastern supported the World War II effort by creating a Military Transport Division consisting of Curtiss C-46 Commandos. In 1944, the Civil Aeronautics Board allowed Eastern to compete for the prized New York-Boston route, which had been an American Airlines (AA) monopoly.

After World War II, Eastern began to augment its DC-3 fleet with four-engined DC-4s and new, pressurized Lockheed L-649 Constellations. It purchased various improved models of the ‘Connie’ over the years, along with more advanced versions of four-engined Douglas aircraft.

In the 1950s, Eastern became the most important carrier in the eastern United States. In 1956, it acquired Colonial Airlines, a company with an impeccable safety record, having gone 25 years without a single fatality to a passenger or crew member in scheduled service. Eastern inaugurated service to Mexico City in 1957.

Turbo-prop Lockheed L-188 Electras joined the fleet in late 1958. With the onset of the jet age, Eastern received its first Douglas DC-8-21 in 1960 and its first Boeing 720 in 1961.

On April 30, 1961, the company inaugurated the Eastern Air Lines Shuttle, its L-1049C Super Constellations leaving every two hours from La Guardia (LGA) to Washington National (DCA), and from La Guardia to Boston Logan (BOS) between 08:00 and 22:00. This unprecedented service, still operated by other airlines to this day, soon became every-hour- on-the-hour from 07:00 to 22:00.

The highly respected Rickenbacker retired, at age 73, on December 31, 1963, after having been at the helm for 25 years.

Eastern became the first operator of the legendary Boeing 727, which it had helped to develop. The first 727 flight originated in Philadelphia, stopped at Washington, and then proceeded on to Miami, on February 1, 1964.

Two years later, Eastern received its first DC-9. Eastern became a transcontinental carrier in 1967, when it introduced service to Portland and Seattle/Tacoma. On September 21, 1969, Eastern also began to fly to Los Angeles.

When it joined the widebody club, the carrier ordered the Lockheed L-1011 Tristar. Prior to the L-1011 deliveries, Eastern had begun jumbo jet service with leased Boeing 747s. The carrier’s first 747 service took place in January 1971, from New York to Miami.

Expansion continued into the Caribbean with the purchase of Puerto Rico-based Caribair in 1973. Its next widebody purchase was the Airbus A300 in 1977, making Eastern the first US airline to order the new European aircraft in a unique deal in which the airline tried the planes out for free. In the 1970s, Eastern was using a polished-silver scheme, but the A300 wore white because some of its composite components could not be polished.

In 1983, Eastern became the launch customer of the Boeing 757.

In 1975, Frank Borman, the former astronaut and retired US Air Force colonel, became CEO of Eastern Air Lines and moved the headquarters from New York to Miami. He had joined the company in 1969 as a special adviser and had played a personal role in the search and rescue effort of Flight 401, a brand new L-1011, after it had crashed in the Florida Everglades on December 29, 1972. He helped injured survivors into helicopters. The tragic accident, the first crash of a widebody, was the result of poor resource management by the cockpit crew after they had become preoccupied with a faulty landing gear light during approach.

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Borman would run the company until 1986.

Three years after Borman had assumed his CEO duties, the US enacted the Airline Deregulation Act of 1978—which would significantly alter the airline playing field and, over the years, separate the weak from the strong. Deregulation fostered a lowfare boom, which, given its high operating costs, hurt Eastern. At the same time, labor relations within the company became progressively conflictual.

Eastern still managed to grow, most notably with the acquisition of Braniff ’s South American routes in 1982. In 1985, the airline peaked, flying to 26 countries on three continents, and was using the DC- 10 for its longest routes and its short-lived service to London Gatwick. The purchases of the 757s and A300s resulted in a significant amount of debt. Borman had figured that the efficient 757 would be vital during a rise in oil prices, but these remained low during most of the 1980s. Meanwhile, competition grew stiffer.

Weighed down by $2.5 billion in long-term debt and deteriorating labor relations, Borman agreed to sell Eastern Air Lines to Texas Air, led by Frank Lorenzo, in 1986 for $676 million. Lorenzo had already purchased Continental and had gained a reputation as a corporate raider and union buster. Various safety violations resulted in a $9.5 million Federal Aviation Administration fine in February 1987. Eastern began a three-year retreat in 1988, dismissing 4,000 employees and reducing West Coast service. The company had to sell aircraft, and Texas Air transferred many core assets to Continental in terms that were very unfavorable to Eastern.

On March 4, 1989, Lorenzo locked out mechanics and ramp employees unwilling to accept deep cuts in pay and benefits. Pilots and flight attendants followed with a sympathy strike, which non-contract employees did not honor. The labor moves resulted in cancelled flights and heavy daily financial losses. That same year, Lorenzo sold the pioneering Eastern Air Lines Shuttle to Donald Trump. Inevitably, the strike, debilitated structure, rising fuel costs, lost competitiveness, and financial losses led, on March 9, 1989, to bankruptcy proceedings. Lorenzo ran the airline with non-union employees, but the courts took away his control.

Marty Shugrue took over operations in a futile effort to try to reverse the negative cash flow. The final blow came from the first Gulf War, which resulted in a spike in oil prices and a subsequent drop in air traffic. By January 1991, the airline was almost out of operating money. Its last flights took place on January 18, 1991.

Eastern ceased operations at midnight on January 19, resulting in the loss of 18,000 jobs, mostly in Miami and New York.

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After the demise of the original Eastern, a court-appointed trustee and administrator were able to preserve the Eastern Air Lines name and trademarks to allow for a future relaunch.

Enter Edward J. Wegel, an airline and aerospace executive with nearly 30 years of experience at carriers like Pan Am, Atlantic Coast Airlines, Chautauqua Airlines, Tower Airlines, and the Mesa Air Group. The original bankruptcy estate came to him in 2007 and asked him to put together a business plan to get Eastern off the ground. Wegel and his partners fashioned a plan and raised capital in the summer of 2008, but the start of the economic recession in September of that year put the ambitions on hold.

Wegel brought back the plan in 2010 and did not look back. On December 19, 2014, Wegel, as president and CEO of the new Eastern Air Lines, was aboard the ‘Spirit of Captain Eddie Rickenbacker’ during its delivery flight to Miami—once again the location of Eastern’s headquarters, as it had been for the original from 1975 to 1991. The delivery culminated with an emotional celebration attended by former employees of the original Eastern as well as by those of the new airline.

Also in attendance and speaking at the event were Manny Diaz, former Miami mayor and now board member of the new Eastern; Miami-Dade County Mayor Carlos Gimenez; Miami-Dade County Airport Director Emilio Gonzalez; Mitsubishi President and COO Teruaki Kawai; Boeing Vice President of Marketing Randy Tinseth; Vice President of American Sales of CFM International Doug Izarra; and Miami Archbishop Thomas Wenski, who blessed the new aircraft.

After the ceremony, Wegel said that he envisioned starting scheduled operations 12 months after the start of charter flights, with a focus on the Caribbean and Latin American regions. Moreover, he foresees Eastern being the number two carrier in Miami, behind American Airlines, with 30 to 40 aircraft flying to Latin America and the Caribbean.

The new corporate headquarters are located in Building 5A on NW 36th Street, at the former Eastern Operation Center at MIA. Miami had served as a hub and headquarters for the original Eastern from 1975 to 1991, when the carrier had ceased operations; the airline had been one of the city’s largest employers during that era.

From mid-April to May 4, 2015, the new Eastern conducted proving runs required by the FAA in order to get its Part 121 Air Carrier Operating Certificate. During this process, the ‘Spirit of Captain Eddie Rickenbacker’ visited airports in Colorado Springs (COS), Rickenbacker’s birthplace of Columbus (CMH), Dallas Love Field (DAL), Islip (ISP), San Antonio (SAT), San Juan (SJU), and Santo Domingo (SDQ). The US Department of Transportation (DOT) granted the required foreign charter authority to Eastern in May 2015.

Nine pilots made up the first class to graduate in February 2015. A second class, consisting of 10 pilots, was on track to graduate by June 15. In addition, the first class of flight attendants graduated in February 2015, and a second on May 13, the same day the FAA granted the Air Carrier Operating Certificate.

Wegel expects that Eastern will continue to have a charter division after introducing scheduled flights sometime next year, after another round of equity raising. He has not disclosed further details on scheduled operations, such as the business model the airline will adopt, but he did say: “We are not an LCC [low-cost carrier]. We have the benefits of a legacy airline brand with new entrant costs.”

Historically, nostalgic relaunches have not been kind to airlines. Reincarnations of Pan Am (PA), National (NA), Braniff (BN), and, most recently, PeopleExpress (PE), have resulted in failure.

Regardless, we wish the new Eastern Air Lines nothing but the best as it once again graces the skies!