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Re: Bidens major threat of retailiation to Iran |
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Posted by Stephen Bauman on Thu Apr 18 11:52:13 2024, in response to Re: Bidens major threat of retailiation to Iran, posted by Fisk Ave Jim on Thu Apr 18 10:27:10 2024. That was the Eastern Airlines shuttle service.There was an intermediate stage. Frank Lorenzo started NY Air Shuttle to compete with EAL. Frank Lorenzo got control of EAL in 1986. He already had control of Texas Air Corporation. One condition for the acquisition was to spin off the NY Air Shuttle to PAA. In 1987, Lorenzo wanted to merge the EAL shuttle into his Texas Air Corporation. This would permit him to charge the entity management fees. The unions and regulators forced him to sell the shuttle. He sold it to Trump in 1988. It was a monumental money loser when Trump took over. The shuttle was profitable, when Trump bought it. Here's a link to a contemporary article. https://archive.li/orHRF COMPANY NEWS; EASTERN SHUTTLE LIKELY TO BE SOLD TO TRUMP TODAY NY Times, October 12, 1988, Section A, Page 1 The Texas Air Corporation will announce today that it has sold the Eastern Airlines shuttle to Donald J. Trump, the New York real estate developer, for more than $300 million, people close to the talks said yesterday. One said that a news conference had been scheduled at the Plaza Hotel this morning at which Frank Lorenzo, chairman of Texas Air, and Mr. Trump would announce the deal. Philip J. Bakes, president and chief executive officer of Eastern, is also expected to be at the news conference. Mr. Bakes was at a meeting at the Texas Air offices in New York yesterday. When asked as he was leaving the meeting at Rockefeller Center if the shuttle had been sold, Mr. Bakes said he had no comment. The Eastern shuttle carries passengers between New York and Boston and Washington. When it began more than two decades ago, the shuttle was considered highly innovative because it required no reservations and guaranteed a seat. The airline had backup planes standing by and promised to put one into service on any flight, even if it meant carrying only one passenger. In the ensuing years, the shuttle has been an important part of the life of businessmen and government officials who must travel between the three cities on short notice. Among Most Profitable Units The sale of the shuttle, one of Eastern's most profitable units, makes it almost certain that Mr. Lorenzo is headed for a bitter showdown with the major unions at Eastern. They have fiercely fought to retain the shuttle as part of the airline. Wright B. George, an official of the pilots union at Eastern, said yesterday that the union would fight the sale in every way possible in the courts and on the labor front. Mr. George did not elaborate about what the union, which represents the pilots who fly the shuttle, might do. ''We're looking at various options to keep this thing from being split up,'' he said. ''The shuttle is the heart and soul of the system.'' The acquisition would give Mr. Trump a small, profitable airline operation that he could use to improve service to Atlantic City, where he owns two hotel-casinos. One of the problems with the casinos has been poor air service that makes it difficult to attract gamblers from a wider region. The deal would also give Mr. Trump aircraft arrival and departure slots and airport gates in Boston, Washington and New York. Gates and slots are difficult to obtain. They would enable him to expand the service to other points. Eastern's shuttle has been profitable for many years, although the company does not report its performance separately in public documents. Pan American World Airways, which started a competing shuttle service last year, is believed to have reached the break-even point. It has attracted substantial numbers of passengers from Eastern. A spokeswoman for Mr. Trump said last night that he was unavailable for comment. He has not disclosed in detail how he might operate the Eastern shuttle and whether he might expand service to Atlantic City. The airport at Atlantic City can handle jet traffic, but its facilities might require expansion should Mr. Trump decide to begin a heavy flight schedule ferrying gamblers and guests from various parts of the country to his casino-hotels. Mr. Lorenzo sought last winter to sell the shuttle to a subsidiary of Texas Air, Eastern's corporate parent. The unions were able to stop the sale temporarily when a Federal court judge in Washington ruled that Eastern was in violation of the Railway Labor Act, which governs bargaining in the airline industry. Eastern, however, won the case on appeal and there is now no legal reason that Eastern cannot sell the shuttle. Plan Abandoned Last Summer Despite that legal victory, Mr. Lorenzo announced last summer that he was abandoning plans to sell the shuttle to the Texas Air subsidiary, a decision the unions hailed as a victory. The chances of a union suit's being able to stop the sale are considered slim now, since the union has already lost an appeal on the same issue, some attorneys involved in the case said. Mr. Lorenzo has been preparing the shuttle for sale for some time. The shuttle has been operating largely as an independent unit within Eastern Airlines, with its own management, marketing strategy and work force. It even assumed its own corporate indentity: Air-Shuttle. Thus it is expected that Mr. Trump will be able to take over easily and not have to find his own managers to run it. Mr. Trump has said that he is thinking of upgrading the shuttle to a ''super deluxe service,'' refurbishing its fleet of 17 older Boeing 727 airplanes and ordering some new planes. Sources close to Mr. Trump said that he planned to take possession of the shuttle as early as January. The sale would have to be approved by the Department of Transportation. Airline industry analysts have said that there would be little problem in getting approval since there appear to be no antitrust problems. War Chest to Grow The sale is expected to increase the bitterness of the struggle between Eastern's unions and Mr. Lorenzo. The airline's largest union, the International Association of Machinists and Aerospace Workers, may soon head for a showdown with Mr. Lorenzo over a new contract. Eastern has been building up cash in preparation for a confrontation with the machinists union, and the sale will greatly add to its war chest, believed to be about $400 million already. Under the Railway Labor Act, no strike is possible by the machinists until the end of a 30-day cooling-off period, which has not yet been set by the mediation board. If no agreement has been reached at the end of the 30 days, Eastern is free to impose its own wages and work rules and the union is free to accept them or strike. Mr. Lorenzo has been seeking deep wage and benefit cuts as well as work rule concessions, contending they are necessary to return the airline to profitability. The machinists' and the pilots' unions have engaged in talks with Carl C. Icahn, chairman of Trans World Airlines, seeking to find someone to buy the airline from Texas Air. Mr. Icahn has indicated that he would be willing to buy Eastern without the shuttle, but the heads of the unions said they would demand that any deal keep the shuttle at Eastern. Thus the sale for Mr. Trump would make it even less likely that Mr. Icahn can strike a deal with the unions, an effort considered unlikely from the outset. |
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