Reports of Shortfall Likely on Eastern, Creditors’ Agenda

Eastern Airlines is set to meet today with its unsecured creditors, who are bound to ask about reports that the airline is facing a substantial shortfall in anticipated revenue from assets sales that are moving too slowly.

Eastern Airlines, the Texas Air Corp. unit that was struck nearly six months ago by its machinists, will discuss its Chapter 11 bankruptcy reorganization plan with creditors, a spokeswoman said.

“Basically it will be a status report on the outlook and prospects for our reorganization plan,” said spokeswoman Karen Ceremsak. She declined to comment on reports about a revenue shortfall.

The Wall Street Journal reported that Eastern plans to revamp its reorganization plan because it has not been able to sell enough assets. The newspaper also said a breakdown in talks with American Airlines over the sale of Eastern’s Latin American routes had put in doubt Eastern’s financial projections. Such a sale had been expected to bring in as much as $400 million for Eastern.

Ceremsak said Eastern was no longer in talks about the Latin American routes with AMR, but added that it had received expressions of interest from several parties.

“We haven’t made a decision about whether to sell these routes,” Ceremsak said. Eastern’s Latin American routes are considered one of the company’s best assets.

Despite problems, Eastern is adding more flights as it works its way back to normal operations since the beginning of the strike, which forced the airline to seek bankruptcy protection.

It said it will add 101 flights effective Oct. 1, increasing to 702 daily departures, close to its target of 800 daily flights.