Eastern Shuttle Sale Ban Upset

A federal appeals court today overturned a lower court ruling barring the sale of Eastern Airlines’ Northeast shuttle to a newly formed subsidiary of Texas Air Corp., Eastern’s parent company.

A unanimous three-judge panel of the U.S. Court of Appeals vacated the lower court ruling and returned the case to federal district court for more hearings. The impact of the case on the sale of Northeast was not immediately clear because the appeals court ruling will give Eastern’s labor unions 48 days in which to file further appeals. The unions contend that Texas Air is trying to break up the airline’s various components to weaken the power of the unions at financially troubled Eastern.