Eastern's shutdown ends 61-year Baltimore link

January 22, 1991|By Blair S. Walker

On Aug. 18, 1930, an ungainly-looking Ford Tri Motor airplane with 11 passengers droned through the humid skies of Dundalk for a landing on a muddy Logan Field .

Thus began a 61-year association between Eastern Airlines and Baltimore, a link that appears to be over, barring a financial miracle to resurrect the hemorrhaging carrier.

Faced with a crushing $3 billion debt and in Chapter 11 bankruptcy, Eastern announced Friday that it had run out of operating capital. That precipitated a move to terminate flight operations and immediately lay off virtually all of Eastern's 18,000 employees.

Court-appointed bankruptcy trustee Martin R. Shugrue Jr. said Saturday that potential buyers had expressed interest in purchasing Eastern's assets, including its jet aircraft.

Yesterday, Delta Air Lines announced that it would pay $43 million for Eastern's routes, gates and facilities in Atlanta and Toronto. The proposed transactions are subject to federal approval.

The cash infusion from the sale is too little, too late to save Eastern, which was started in 1926 and purchased in 1935 by World War I fighter ace Eddie Rickenbacker, one of many management changes the company would experience.

Mr. Shugrue said Saturday that he would not "hold out false hope" that the airline once billed as the Wings of Man would ever take to the air again.

At Baltimore-Washington International Airport, the impact of Eastern's demise was cushioned by the fact that the carrier had few flights there.

"They were running five flights a day directly to Atlanta and one to Ottawa, Canada," said Maryland Aviation Administration spokeswoman Carol T. Riley. "It's sad, because they've been one of our original carriers. They've been with the airport since 1950, and we're really sorry to see them go."

Of the 675 arrivals and departures BWI handles on a typical weekday, Eastern was responsible for 12, or less than 2 percent, by the time it ceased operating, Ms. Riley said.

Forty-seven Eastern employees worked at BWI, company spokesman Jim Ashford said yesterday in Miami. The layoff toll was far bigger at Washington's National Airport, where 646 Eastern employees lost their jobs, Mr. Ashford said. A company proposal to offer laid-off workers two weeks of severance pay must gain court approval, he added.

Only a decade ago, Eastern was BWI's No. 1 carrier. That year, the Miami-based airline funneled 350,000 passengers through the airport and used Baltimore as a gateway for such destinations as Bermuda; San Juan, Puerto Rico; Tampa, Fla.; Nassau, Bahamas; and New York. BWI's second-largest carrier,

USAir, accounted for 336,000 BWI travelers in 1980.

But rancorous labor problems, high fuel costs and a weakened economy combined to drag Eastern back to earth last week.

BWI is now a hub for USAir, which has significant financial problems of its own, including 1990 losses projected at about $440 million. But USAir's problems are nowhere near the magnitude of Eastern's, and it is still BWI's premier carrier, followed by American Airlines, Delta Air Lines and United Airlines, Ms. Riley said.

USAir spokeswoman Susan Young said yesterday that it was too early to predict how Eastern's disappearance might affect her airline.

"At this point, we're just taking a look at the situation and that's about all I can tell you," Ms. Young said.

Ms. Riley said USAir has been negotiating with Eastern to obtain rights to the Ottawa-Baltimore route.

The Aviation Administration will be talking with Eastern to determine the fate of Eastern's four BWI gates, as well as a lease for 23,000 square feet of terminal space that expires in 1993.

"We don't have an official position on the lease arrangements right now," Ms. Riley said.

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