P.M. BRIEFING : Eastern Airlines No Longer for Sale

Texas Air Corp. said today its board has decided that the company should no longer pursue the sale of its strike-plagued Eastern Airlines unit because such a sale would not be in the best interests of Texas Air or Eastern’s creditors.

The company said its board supports Eastern’s management’s desire to reorganize Eastern, which is operating under Chapter 11 bankruptcy protection.

Under the reorganization, Texas Air said a substantial portion of Eastern’s assets would be sold, raising large sums of cash and enabling the carrier to immediately pay off a significant portion of its debt.

A planned sale of Eastern last week to former Baseball Commissioner Peter Ueberroth for $464 million fell through due to a dispute between Texas Air Chairman Frank Lorenzo and Eastern’s unions about the interim management of the grounded airline while a sale was completed.