Advertisement

Trump Buys Shuttle Line From Eastern : Union Calls It Death Knell of Troubled Airline

Associated Press

Donald Trump announced today that he has bought the profitable Eastern Airlines shuttle from Texas Air Corp. for $365 million cash and will rename it after himself. Eastern’s militant union leaders called the sale the death of the airline and vowed to fight it.

“I want to run it as a diamond, an absolute diamond,” the flamboyant real estate-gambling mogul Trump told reporters at a joint news conference with Texas Air Chairman Frank Lorenzo at the Plaza Hotel, another recent Trump acquisition.

“You’re going to be flying with something that’s quality and good,” Trump said of the money-making commuter service between the heavily traveled cities of Boston, New York and Washington.

He said the shuttle will now be called “The Trump Shuttle” and its blue and silver Boeing 727s will be redecorated and emblazoned with red, black and gold stripes. The deal is expected to be completed by mid-December.

Advertisement

Lorenzo told reporters that the sale was “not our preferred course,” but he said Eastern’s militant unions had created a situation that deprived management of the right to negotiate.

The Texas Air chief also confirmed speculation that he had talked with takeover strategist Carl Icahn, head of TWA, about selling him other operations of Eastern, which Lorenzo’s company bought two years ago, creating the nation’s biggest airline company. Texas Air also owns Continental Airlines, a non-union carrier based in Houston.

Trump and Lorenzo said the shuttle will maintain fares competitive with the northeast shuttle service operated by Pan American World Airways and won’t lay off any employees. The $365-million cash acquisition, substantially above previous estimates of the shuttle’s sale price, includes landing rights at airports in the three shuttle cities and 17 airplanes.

The sale marks another tumultuous chapter in the saga of Eastern, the Miami-based carrier that has been scarred by management-labor feuding and $1 billion in losses over the last decade.

Advertisement

The shuttle is considered Eastern’s crown jewel. Eastern officials testified recently that the shuttle is the airline’s only remaining profitable operation.

When word of the deal leaked earlier today, Eastern’s machinists vowed to seek a federal court order against it.

In Washington, attorney Joseph Guerrieri, representing the machinists union, said he was preparing a request to U.S. District Court in Washington to grant an injunction against the sale and will file it later this week.

“The sale of the shuttle is the death knell of Eastern Airlines as we know it. We just can’t allow the employees to be walked over in this manner. We intend to keep Eastern Airlines a viable entity by seeking to enjoin this sale,” Guerrieri said.


Advertisement