Eastern Cuts Fares in Half as Planes Fly Almost Empty
Eastern Airlines slashed fares in half Wednesday on its almost-empty Northeast shuttle service in a desperate effort to lure back customers who have gone to other carriers since a machinists strike at the airline began five days ago.
The airline, which has been virtually shut down by pilots who are honoring the machinists’ picket lines, is operating only the hourly shuttle between Washington, New York and Boston, and three weekly flights to South America. Some of the shuttle flights have left with only six people aboard.
Meanwhile, some pilots at other airlines continued to fly strictly by the rules, a tactic that would delay flights and, thus, possibly increase pressure on the Bush Administration to intervene in the Eastern strike.
But the Federal Aviation Administration reported that the number of flight delays Tuesday--995--was actually below this year’s daily average of 1,148. On Wednesday, delays were running at about the same rate as the day before, FAA spokesman Fred Farrar said.
Separately, USAir Corp. announced in Philadelphia that it has tentatively agreed to acquire eight Eastern gates at Philadelphia International Airport and two Canadian air routes for $85 million. The agreement is subject to approval by President Bush and the Department of Transportation.
The agreement could pump additional cash into Eastern, and may also be a sign of the willingness of Eastern’s parent, Texas Air Corp., to begin selling assets in the face of the strike.
Eastern has threatened to file for bankruptcy if its pilots don’t return to work soon but took no action on that front Wednesday and refused to comment on its plans.
The drastic fare reduction on the shuttle, from $99 one way to $49 on weekdays and from $69 to $12 on weekends, came at a time when most of the action in the walkout shifted to courtrooms and press briefings.
A federal appeals court judge in New York declined to overturn a lower court ruling barring the machinists from engaging in secondary boycott activity against three railroads until a federal district court judge has completed a hearing on the issue. That hearing, before U.S. District Court Judge Robert Patterson, is already in progress and may be completed as soon as Friday. John Peterpaul, vice president of the machinists union, predicted that the union’s right to engage in secondary boycotts under the Railway Labor Act would be upheld.
Eastern also was expected to file an appeal soon of a Tuesday ruling in Miami that upheld the right of Eastern’s pilots to respect machinists’ picket lines.
Eastern announced Wednesday that it will meet today with the Air Line Pilots Assn. regarding Eastern’s contract with the pilots’ union, which expired in June. Pilot spokesman J.B. Stokes said he hoped that there would be “a good give and take at the meeting. We hope something can be developed.”
In another development, financier Carl C. Icahn, the chairman of Trans World Airlines, said that he had been contacted by a representative of the striking machinists union to encourage him to take over Eastern. But though Icahn said he would be willing to talk to the machinists, he said he wouldn’t do so without Eastern’s permission.
Icahn and Charles Bryan, president of the machinists local representing Eastern’s workers, first spoke several months ago about the possibility of Icahn’s buying Eastern. Icahn was once also seen as a foe of organized labor much in the same way that Frank Lorenzo, the head of Eastern’s parent Texas Air Corp., is considered today.
The 8,500 mechanics and baggage handlers represented by the International Assn. of Machinists and Aerospace Workers went on strike Saturday after 17 months of talks failed to reach agreement on a new contract. The company, which has been profitable only one year out of the last 10, says a 15% reduction in wages is vital to keeping the company solvent.
The machinists and pilots contend that Lorenzo has impoverished Eastern by transferring assets to its sister airline, Continental, which operates with non-union workers.
An Eastern spokesman Wednesday angrily denied assertions that Lorenzo had purchased Eastern in 1986 to strip it of its assets.
“Texas Air came in to keep Eastern afloat,” said Robin Matell, the Eastern spokesman. “Eastern could have been allowed to fall long ago if that was the grand scheme.”
Matell said that Eastern had sold six A-300 Airbus planes and a McDonnell Douglas DC-10 to Continental Airlines. Continental is also owned by Texas Air. But it had gotten five DC-9s from Continental “for a net of two aircraft.”
Other assets had been sold to “third parties” to keep Eastern afloat, he said. He also denied charges that Eastern’s computerized reservation system was sold to Texas Air at what some have charged were bargain basement prices. That transaction, he said, was in the works before 1986.
George Brennan, Eastern’s vice president for marketing, told a news conference at the airline’s heavily guarded headquarters in Miami that the slashed fares on the shuttle were the same as when the shuttle began operations in 1961.
Staff writer Paul Houston in Washington contributed to this story.
