Trustee Says Buyers Are Interested in Eastern : Airlines: Martin Shugrue fires the carrier’s chief labor negotiator, extending an olive branch to unions.


The trustee appointed last week by a bankruptcy court judge to take charge of troubled Eastern Airlines said Monday that there have been “expressions of interest from a number of parties” about buying the airline.

Martin R. Shugrue Jr. vowed that Eastern will not be cut up and disposed of in pieces but did not rule out a sale of the airline as a whole. “This trustee is not a liquidator,” he added forcefully. “I came here to stem the financial losses and make Eastern economically viable.”

But he conceded that the airline’s financial situation will have to be radically improved before any serious offers can be expected. He declined to identify any of those who have “shown interest in this enterprise.”

Shugrue, in his first public appearance since his appointment by U.S. Bankruptcy Court Judge Burton R. Lifland in New York last Wednesday night, also struck a conciliatory note toward Eastern’s labor unions. He said a dialogue must be established immediately with the machinists, who have been on strike for more than a year and whose walkout triggered the airline’s bankruptcy filing. He said preliminary talks have already taken place.


He said there has been “a lot of blood spilled” in Eastern’s dealings with labor and urged that any talks with the unions be conducted “on a less hysterical plane.”

“My immediate agenda calls for toning down the noise and rhetoric which have undermined the confidence of our passengers and shippers,” he said. “We need a period of normalcy during which Eastern can stay off the front pages and evening newscasts. I’d certainly like to harmonize labor relations.”

Clearly extending an olive branch to the unions, Shugrue said one of his first official acts had been to fire Thomas Matthews, Eastern’s senior vice president for human resources and the airline’s chief labor negotiator.

But Shugrue also vowed that Eastern would not become a patsy to the unions. “Talking with the unions by no means implies a simple caving-in to their demands,” he said.

He said there is no “artificially imposed deadline from the judge or the creditors’ committee” on a timetable for a turnaround, the filing of a new reorganization plan or the airline’s emergence from bankruptcy. In answer to a question, he said the size of his compensation as trustee had not yet been determined.

The trustee was once vice chairman of Pan Am Corp. and is a former president of Continental Airlines, which, along with Eastern, is owned by Texas Air Corp. of Houston. He appeared confident during the 45-minute news conference at Eastern’s Miami headquarters that he will be able to bring the airline back to life.

“I believe Eastern can achieve a financial turnaround,” he said. “I believe Eastern has basic strengths which can be revitalized. I believe Eastern can be a profitable airline.”

The 49-year-old former naval aviator said his “immediate priorities are to increase revenues and re-establish consumer confidence.” He added that the airline will soon initiate an aggressive marketing campaign designed to lure business travelers. At the same time, he said, the airline would not abandon its discount fares for leisure travel.