Eastern Air Lines is officially dead. Again. The DOT revoked the airline’s operating certificate this week, formally ending a revival that probably lasted longer than most expected but which still proved to be unsuccessful. Eastern’s re-launch plan called for a growing fleet of commercial aircraft running scheduled service on domestic and foreign routes. What happened was a niche charter operation with four aircraft that never really took off. Earlier this year the remaining assets were purchased by Swift Air, another charter operator. The operating certificate was not transferred as part of the deal making this week’s action mostly a formality.
The revival called for a 12-18 month ramp up period of charter operations before commercial service launched. The charter services ran smoothly enough (one LaGuardia incident not withstanding). The company had contracts for several sports teams and operated scheduled charter service to Cuba. It also operated ad hoc charter flights to other Caribbean and Latin American destinations. Alas, the commercial side never realized the necessary traction needed. The termination of the license came without objection from Eastern based on the cessation of branded operations with the Swift Air transaction.
Cuba gave Eastern life, then killed it
Perhaps the most significant impediment to Eastern’s growth and success was the opening of Cuban flights to commercial service in 2016. When only scheduled charter service was on offer the fares were high and so were profits. Less than daily service was typical in most markets, making it even easier to squeeze profits out of those trips. The day the new bilateral commercial service agreement was inked, however, the countdown clock began for Eastern.
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The carrier applied for some of the commercial slots in Cuba but that application was rejected by the DoT.
Eastern has not completed the necessary licensing steps to conduct scheduled air transportation, and that Eastern is currently limited to providing charter flights only…. In the circumstances presented, the Department believes the best approach is to defer action on Eastern’s request for non-Havana frequencies and exemption authority at this time.
Had the airline proved its ability to operate scheduled service on other routes there’s a pretty good chance the Cuba service would have come through as well. The non-Havana route requests were uncontested so there was no reason to deny them. Then again, with the low fares and even lower load factors it is not clear that operating those routes would have proven useful for the airline in the long run.
Those keen to see airline startups in the US market need not fear this failure. Serial airline startup executive Ed Wegel, instrumental in the Eastern relaunch, has a new project in the offing. He’s part of the team attempting to revive the World Airways brand as a long-haul LCC using Boeing 787s to fly between the US and destination in Latin America or Asia. It is unclear why the team chose a legacy name that most know today only as a cargo operator. Perhaps the relaunch failures of Eastern, PeoplExpress and multiple Pan Am iterations have them convinced that a strong name is key to success.
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Eastern’s collapse also impacts aircraft manufacturers. The company had an outstanding order for 10 Boeing 737 MAX and 20 Mitsubishi MRJ90 aircraft. Not that anyone seriously believed those deliveries would happen, but eventually both airframers will need to account for those orders disappearing. That loss will be far easier for Boeing than Mitsubishi to absorb.
Header image from Boeing 737MAX customer profile rendering
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I wonder if Ed Wegel will be more successful with his attempt to revive World Airways.
I have my doubts. LatAm has an already growing LCC market that can easily reach north to the USA with existing fleets. Deep South America could use the 787s World is planning, though. And so can Asia, where there is greater potential. But also 12-15 hour stage lengths rather than 6-10. That does affect pax expectations and costs.
Also, I wonder about using a name that hasn’t seen passenger service in 30+ years. Who is that supposed to be targeting? The consumer isn’t going to flock to an airline because of that name. But i guess it is useful to hoodwink some deep pockets??
But Angelhaha Airline lives.
We used Eastern on the 2016 campaign trail. Here’s a shot I took of Eastern in Havana.
Fortunately, DOT cannot revoke the operating certificates of imaginary airlines. http://easternairlinesvirtual.com/www/index.php
Sounds to me like Ed Wegel made a profit out of the Eastern name and had no use for it anymore. Why else would one give up and walk away or be forced out the door. Research the list of airlines that he’s worked for the huge majority don’t exist anymore, call it what you will but there’s a fishy pattern here. Now he’s trying to bring back World Airways? Why not try to fight and keep eastern airlines afloat? Instead he thinks bringing back another old airline will do something. Give me a break, if he actually cared about eastern he would have done way more. Instead he’s torn people’s hearts again making them relive what they already did back in 1991.
Yeah…the pattern of using a “famous” old airline name to secure funding from old guys who remember flying in the 70s and then profiting personally along the way isn’t all that hard to follow. And it isn’t only him. But it is the way things seem to happen these days in the industry.
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