AIRLINES : Possible Buyers Begin Lining Up for Some of Eastern’s Better Routes
With the future of Eastern Airlines very much in doubt, American Airlines on Thursday became the first competing airline to publicly declare its interest in buying pieces of Eastern.
As a battery of lawyers for Eastern, its unions and other parties to the drama maneuvered for court-ordered meetings today, American’s top executive said he might want to buy the strikebound airline’s highly profitable Latin American routes.
The statement by American Chairman and Chief Executive Robert Crandall was clear evidence that the airline industry increasingly believes that Eastern, which filed for Chapter 11 bankruptcy protection a month ago, will ultimately be cut up and sold off piecemeal.
In addition to Eastern’s routes serving 14 cities in South and Central America from Miami--which it purchased in 1982 from Braniff Airways before Braniff went bankrupt--Crandall said American might also be interested in some of Eastern’s Canadian routes.
Crandall has previously declined to say whether American was interested in Eastern assets. But American is a logical candidate because it has already announced a big expansion of its Miami operations.
“We did accelerate some of the program because the Eastern strike created a void which had to be filled,” said spokesman Alton Becker Jr. “There is an extraordinary opportunity out there.”
‘No Intention’
“Crandall may be getting the feeling that the time is getting appropriate that the (bankruptcy) judge may be closer to considering a viable liquidation,” said Raymond Neidl, airline analyst at McCarthy Crisanti & Maffei in New York.
Frank Lorenzo, chairman of Texas Air Corp., Eastern’s parent and chairman of Eastern, has said though it would bring in more money, he had no intention of selling the airline in pieces.
The search for other survival options continued in New York, where federal bankruptcy judge Burton R. Lifland has ordered lawyers for Eastern’s three unions, Eastern, Texas Air and Eastern’s creditors to meet today with court-appointed bankruptcy examiner David I. Shapiro.
Last weekend in Washington, Shapiro cajoled the unions and former Baseball Commissioner Peter V. Ueberroth into a five-year labor agreement as part of Ueberroth’s $464-million bid to acquire Eastern. But the deal collapsed late Tuesday.
In remarks at a New York speech Thursday, Ueberroth reiterated that “We’re out of there for sure.” But union members--and apparently Judge Lifland--held out hope Thursday that the conflict dooming the purchase could be resolved.
Good Terms With Unions
“I’m not sure Peter’s out of the game,” said Rick Chapman, a member of the Eastern pilots master executive council. “It would not surprise me if he came back into the picture, but I think he won’t initiate anything.”
It was clear that Ueberroth and the unions parted on good terms, however. After a news conference at which the failure of the venture was announced, Ueberroth met privately with several of the union leaders in a session described as exceptionally friendly.
Several attorneys, noting Judge Lifland’s oft-stated determination to save Eastern and get its planes back into the air, said they expected to be meeting all weekend. It was far from clear, however, whether Shapiro will be able to forge any new agreements.
Sources said Eastern’s unions were preparing to set up a meeting with TWA Chairman Carl Icahn, who has long expressed an interest in the company. On Thursday, he reiterated his interest, but a spokesman said he would be willing to pay “very, very little” for Eastern.
Icahn or other bidders could make a bid for Eastern in bankruptcy court Monday, the next scheduled hearing. Icahn could contend that he is in the best position to protect the interests of shareholders and creditors of Eastern by purchasing it and then merging into TWA, a larger carrier.
