Sale of Eastern Airlines Shuttle to Trump OKd

A federal judge on Monday approved the sale of Eastern Airlines’ Northeastern shuttle service to real estate magnate Donald J. Trump, a $365-million deal that labor leaders had challenged as a union-busting effort.

Texas Air Corp., the Houston-based holding company that is Eastern’s parent firm, has been trying to sell off the profitable shuttle, arguing that struggling Eastern needs the cash to survive.

But the carrier’s unions have argued that the shuttle sale is simply a guise for Texas Air’s true motive: to dismantle Eastern, whose 30,000 workers are represented by three militant unions, and eventually reconstruct it as a non-union airline.

“There is no doubt that an ongoing struggle has and will continue to exist between Eastern and its” unions, U.S. District Judge Barrington D. Parker wrote in his opinion. “However, the court feels that equally plausible is the idea that management is seeking to rebuild the company and place it on a sound financial footing.”

The transaction must still be approved by the Transportation Department, which must affirm that Trump can operate the shuttle safely and manage it properly.

The flamboyant Trump announced his agreement to purchase the shuttle for cash on Oct. 12, saying he would turn the shuttle, which makes hourly flights among Boston, New York and Washington, into “an absolute diamond.”

He said he would rename the service “the Trump Shuttle,” and redecorate its 17 Boeing 727 jetliners, including painting them with gold, red and black stripes.

Trump already owns casinos in Atlantic City, N.J., a helicopter service that flies between the gambling center and New York, the Plaza Hotel in New York and other prestigious properties.

Sees No Obstacles

Speaking from his New York office, Trump said he planned to begin service on the new shuttle in February.

“This is now a business deal that does not have obstacles in its path,” he said.

Philip J. Bakes, Eastern’s president and chief executive, said the carrier was “gratified at the court’s decision today.”