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The Return of Eastern Airlines???

Furloughed80

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The Return of Eastern Airlines: Color us Skeptical.

Posted by Matt Phillips
AP Photo/Jennings
[FONT=Arial,Helvetica,sans-serif]Eastern jets at their Miami Maintenance facility in July 1990. The carrier ceased operations in January 1991.
[/FONT]


Will Eastern Airlines, the major U.S. carrier that ceased operations in 1991 amid labor strife and bankruptcy, be revived?
There have been a few rumors on the Web about bringing Eastern Airlines back as an honest-to-god carrier. Today, travel newsletter Tripso writes that “a group of former Eastern Airlines employees and an investor group are exploring the rebirth of Eastern.” Tripso’s Charlie Leocha writes:
In a letter circulated to former Eastern Airlines employees, an investor group announced that they have “concluded a deal with the Eastern Airlines estate to acquire the name, trademarks and affiliate names (including Eastern Express and Eastern Shuttle) for the purpose of re-starting the airline as a scheduled airline.”
Ed Wegel, a veteran of the airline world and current CEO of Eastern Airlines, Inc., told former Eastern Airlines employees, “We have developed a business plan for the re-start of Eastern which leverages off of Eastern’s core strengths while using all of the lessons we have learned from all of the start up airlines and the restructuring of all of the legacy carriers over the past 18 years.”
According to this letter, the new airline management will break new ground with contracts with the new Eastern’s crew members and a stock ownership plan that will completely align everyone’s interest in the new company.
This isn’t the first time investors have considered bringing Eastern back from the grave. Back in April 2008, the South Florida Business Journal wrote that the steward of Eastern Airlines’ assets and trademarks signed a deal with a group controlled by Wegel, who at that time, said he hoped to “restart Eastern Air Lines in Miami by summer 2009.”

The combination of the bad economic conditions and tough financing would likely make starting — or reviving — a carrier an unlikely proposition at the moment. But with Wegel’s background in airline financing, maybe he knows something we don’t.
Here’s what Mesa Air Group had to say about Wegel when it named him as a new senior vice president of corporate planning in February 2004:
Ed comes to Mesa with over 18 years of experience in the airline industry. He began his aviation career in 1985 at Eastern Airlines where he worked on the finance, operations and marketing staffs. In 1987 he moved to Shearson Lehman Brothers where he specialized in aircraft finance, working with a number of US and foreign airlines. In 1991 he participated as a co-founder in the start-up of Atlantic Coast Airlines where he served on the board for six years. Ed also served as Senior Vice President-Corporate Finance of Atlantic Coast from 1991 to 1994.
In 1995 Ed led an investment group in the privatization of BWIA, the national airline of Trinidad and served as the airline’s President and Chief Operating Officer in 1995 and 1996. In 1997 Ed participated in the acquisition of Chautauqua Airlines, a regional airline in the US operating for US Airways and served as the airline’s Chief Executive Officer from 1998-1999. Since 1999 Ed has been a consultant to the airline industry working on such projects as advising the trustee in the bankruptcy of Tower Airlines and advising several major investment funds on their airline industry investments.
Wegel is a graduate of the United States Military Academy at West Point and the University of N. Colorado with an MBA in Finance.
Eastern Airlines has something of a mixed legacy. With its roots in an airline founded by World War I flying ace Eddie Rickenbacker, the carrier might be best known for the development of the first shuttle operation back in 1961. But by the time it ceased operations in 1991, it suffered from a succession of problems, including huge debt loads, labor strife, bankruptcy, management issues, the crisis associated with the the first Gulf War and surging oil prices.
 

CKJET

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Former Eastern employees? Real Eastern Employees have not worked for Eastern for 20 years? There can't be that many left that are able to work?
 

JustaNumber

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In a letter circulated to former Eastern Airlines employees, an investor group announced that they have “concluded a deal with the Eastern Airlines estate to acquire the name, trademarks and affiliate names (including Eastern Express and Eastern Shuttle) for the purpose of re-starting the airline as a scheduled airline.”
In the mid nineties I flew a bit for a tiny start-up out of BWI calling itself Eastern Air Transport. (They had one Navajo flying 135 charter and freight). Somehow the owner managed to buy the rights to the Eastern call-sign. (That was kind of strange, going by "Eastern One"). Of course that company is now out of business, so I don't know what happened to the rights.
 

slaquer5

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Former Eastern employees? Real Eastern Employees have not worked for Eastern for 20 years? There can't be that many left that are able to work?

I was at EAL and have lots of time left to fly. :)

PS No I was not one of the them that crossed the line.....
 
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spitfire1500

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Former Eastern employees? Real Eastern Employees have not worked for Eastern for 20 years? There can't be that many left that are able to work?

Theres a few at my company that were naughty a few years back and Eastern can have em all back!!!! This may create a few positions over at Air Tran too.
 

N1atEcon

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Sounds like a few trying get some PR and some $$$$$. There is no way anyone with good intentions would try to start an airline in this enviornment.
 

Rez O. Lewshun

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Waiting for Frank L. to chime in.... he should have something interesting to say....


Not sure about re-usinig the name... that would be akin to a politician running for POTUS and using the name Ronald Reagan!
 

Colonel Savage

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I imagine "Frank Lorenzo" will be commenting on this thread soon.
 

Headfake14

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Although it'd be cool to see and hear "Eastern" again, now is not the time in this enviroment.

The Pan Am revival didn't work out too well...I'd hate to see another 'end' to Eastern
 

relief tube

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because this country needs another airline right now.

Even 10 years ago we had too many airlines.
 

Secret Squirrel

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Airtran is going to merge with JetBlue and Frontier and will be unveiled as Eastern Airlines.
 

SEVEN

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Former Eastern employees? Real Eastern Employees have not worked for Eastern for 20 years? There can't be that many left that are able to work?
When Airtran goes under, the former employees can go back to work.
 

Joblu

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Although it'd be cool to see and hear "Eastern" again, now is not the time in this enviroment.

The Pan Am revival didn't work out too well...I'd hate to see another 'end' to Eastern

I believe that if investors and leadership were different PA would have had a shot.

Unfortunately this was not the case of PA2 and 3. Both had incapable leadership and funding. Using old 727's in PA3 was also cheap and undesirable to resurrect the name. Frankly IMHO, PA would have had a better image remaining dead than these tools trying to resurrect it.
 

SDCFI

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"According to this letter, the new airline management will break new ground with contracts with the new Eastern’s crew members and a stock ownership plan that will completely align everyone’s interest in the new company."

IOW they're going to offer substandard wages and benefits by "carroting" a stock program. Worked great at Skybus right?
 

SkiFishFly

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What if

What if these guys, who have more money than sense, bought the rights to Eastern and then bought an existing airline (AirTran) to get the whole thing started?
 

Colonel Savage

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What if these guys, who have more money than sense, bought the rights to Eastern and then bought an existing airline (AirTran) to get the whole thing started?

Oh stop...
 

FIREMAN

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What if these guys, who have more money than sense, bought the rights to Eastern and then bought an existing airline (AirTran) to get the whole thing started?


Things to make you say Humm.
PAR Investment Partners LP
AAI 23,000,000 >10%
ALGT 8,322,300 >10%

PRIDDY ROBERT L Director of ALGT partner in PAR. Founder ValuJet.
 

Saluki Dawg

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Wasn't it rumored a year or two ago that JL wanted to ressurect the EAL name for AAI?
 

FIREMAN

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I think PRIDDY wants his airline back. The Eastern thing has nothing to do with Priddy.
 
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