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.
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.
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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