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tommy767
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Eastern And PanAm Shutdowns

Fri Nov 21, 2003 11:47 am

Was the Eastern and PanAm shutdowns a gradual event, or was it predicted? I know for Eastern it was under frank lorenzo, and everyone was predicting major financial toubles in 1989. I went down to the library and searched on the NY times database, and there was even a TV program on dateline (or one of the news shows) where they asked if Eastern would survive. That was in 1989 because the other shows on were Rosanne, and Dial up MTV.

Anyway, back to the topic at hand. What do you remember?


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jeffrey1970
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RE: Eastern And PanAm Shutdowns

Fri Nov 21, 2003 12:01 pm

I can't remember things exactly, but I do remember Eastern suffered a strike not long before they shut down. When President Bush 1 refused to order them back to work many experts, if I can remember correctly, said they felt this would hurt them baddly.

God bless through Jesus,

Jeff

p.s. I could be wrong about what I said
 
AirT85
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RE: Eastern And PanAm Shutdowns

Fri Nov 21, 2003 12:08 pm

I was only 6 when Eastern shut down but I can remember very distinctly arriving at the Atlanta airport one weekend and seeing nothing but silver jets parked all over that airport right after Eastern shutdown. I also remember walking out to the parking garages from the lower-level past what used to be their baggage check-in and the sign was down and it was empty. I didn't really understand what was going on at that time.

Oddly enough, a similair scene would be witnessed when ValuJet was grounded, arriving in Atlanta and seeing DC-9 after DC-9 parked and wrapped up at C-concourse.

-Tony
 
srbmod
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RE: Eastern And PanAm Shutdowns

Fri Nov 21, 2003 12:16 pm

Eastern's shutdown was a surprise, as it seemed as though they turned the corner from the labor problems of the previous few years. Then fuel prices started to rise as a result of the Iraq's invasion of Kuwait, and when the air campaign of the first Gulf War started, passengers bookings fell and passenger cancellations grew for all carriers, on fear of terrorism. Eastern was in no position to take such a hit, and failing to obtain additional financing to help them cope doomed the airline. Pan Am was a similar situation, as they took a double blow as a result of a decline in domestic and international bookings. Pan Am had already been suffering financially for several years, selling off valuable assets like LHR rights and their Pacific Ops to UAL. Delta came in to help restructure and keep Pan Am afloat , but grew tired of the losses very quickly (they were suffering some of their own) and pulled the plug on Pan Am by withdrawing their financial package. Basically, both airlines were already too far gone to save, they were very heavily burdened with debt, and nobody wanted to take the risk to keep them afloat.
 
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STT757
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RE: Eastern And PanAm Shutdowns

Fri Nov 21, 2003 12:18 pm

Eastern's employees went on strike in 1989, that temporarily shut down the airline for a couple months. By August 1989 they were back up to 70-80% of the pre-strike operations level with new employees and employees who crossed the picket lines.

About 1-2 months after the employees went on strike and the airline was temporarily shut down Eastern filed for Chapter 11 bankruptcy protection, they then began reoperating during their bankruptcy. In 1990 the bankruptcy court and Eastern's creditors took control of Eastern and threw Lorenzo and Texas Air out, the court put former CO Executive Martin Shegrue in charge.

He started building the "new" Eastern, they were selling assets such as their North East Shuttle, Latin American/Miami hub, JFK Maintence facility, Philadelphia hub, aircraft etc. to generate cash for their reorganization. They hoped to reorganize and exit bankruptcy as a low cost carrier based out of ATL (where they moved their headquarters), however the mounting losses forced the creditors to refuse to loan Eastern any more money so in January 1991 Eastern shut down for good.

So there were actually two shut downs, the first in 1989 when Eastern's employees went on strike, the airline relaunched about 80% of their pre-strike operation with new employees and employees who crossed the picket lines. In 1990 when Lorenzo and Texas Air were forced out of Eastern the employees who were picketing Eastern called off their strike and asked to return to work.

However by that time it was too late.

During their bankruptcy reorganization they sold off many assets to generate cash to keep afloat in hopes of pulling out of bankruptcy.

They sold their North East shuttle to Donald Trump.

Their Latin America routes to American

Their Philadelphia hub to Midway

Their JFK maintenance base to AA

And several aircraft including 2 DC-10s to CO, which were some of the last DC-10s CO operated untill 2001.

After Eastern was shut down the last time in 1991 the bankruptcy court auctioned off their remaining assets.

Their LGA hub went to CO, who sold it to US Air around late 1992.

Their DCA hub went to NWA, who sold it to US Air around late 1992.

Some of their L1011s went to DL, who bought gates and other facilities at ATL.

I followed Eastern closely, I have many articles and video tapes about their journey from 1989 to their end in 1991.

 
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STT757
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RE: Eastern And PanAm Shutdowns

Fri Nov 21, 2003 12:27 pm

Pan Am's shut down was a big suprise, DL pledged to fund their reorganization as a MIA based airline serving Latin America.

DL got scared with the economy and such and pulled the plug on Pan AM's hopes of reorganizing at MIA, they did not provide Pan Am with the money they promised.

At that point Pan Am was a shell of it's former self, all they had left were their Latin America routes which were sold at auction to UAL by the bankruptcy court.

1985 Pan Am sells their flagship Pacific routes to UAL

1990 Pan Am sells their Heathrow flights to UAL

1991 Pan Am sells it's JFK and Frankfurt hubs to DL

1991 Pan Am shuts down their last operating hub (MIA) after DL reneged on a promised loan.
 
MSYtristar
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RE: Eastern And PanAm Shutdowns

Fri Nov 21, 2003 1:03 pm

The last Pan American World Airways flight was on 12/4/91, PA436 Barbados-Miami operated by Boeing 727-200 "Clipper Goodwill", commanded by Captain Mark P. (name abbreviated to ensure privacy). Aircraft did a dramatic low-level fly over at MIA and received a water cannon salute. It was one of the saddest days for me personally.

Once Delta decided that the new Pan Am business model was not going to be successful (even though they never really gave it much of a chance), they pulled the plug, and operations pretty much stopped overnight. Pilots were left stranded in the Pan Am Academy in MIA...some had to leave the building by way of fire escape doors, etc.

Delta took Pan Am's crown jewels and ran is what it pretty much boils down to. A very sad end to a once proud and distinguished airline.


Stephen in New Orleans

 
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zippyjet
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RE: Eastern And PanAm Shutdowns

Fri Nov 21, 2003 2:28 pm

It was sad to see Eastern's final passing. I hoped against hope, that the "wings of man," would manage to keep on flying. Eastern's death march started way before the strip mining shenanigans of Frank Lorenzo and his Texas Air corporation. Lorenzo and company were the straws that broke the camel's back. Here are my feelings and theory's as to Eastern's demise.

1. Equipment: Going back to the days of Eddy Rickenbocker's stubbornness to join the jet age back in the late 50's. Smaller lines such as National and even Northeast sported pure jet service from such markets as Boston, New York, and even Baltimore to Miami. Eastern relied on the Lockheed Electra turbo prop which suffered from early tragedy's. Eastern's first fleet of jets were the DC-8's. Though excellent birds, they came on the scene later than the Boeing 707. Eastern however did catch up in the early to mid 60's by launching the 727; but, these other carriers already were ahead when it came to long range flights to Miami.

Flash forward 10 years; the advent of the widebodies. Again, Eastern went with Lockheed and was the launch carrier of the L-1011. Another excellent bird but, there were those issues with Rolls Royce. Again, Eastern and Lockheed lost the race of time. The 747 had a 2 year jump and even the DC-10 took to the skies before the L1011. Eastern was still flying JFK era Boeing 720's and Eisenhower vintage DC-8's. Then, there was that nasty fuel crisis and general economic malaise of the early 1970's. Eastern being a vacation carrier (Florida and Caribbean routes) was especially hit hard.

2. Route system: As mentioned, Eastern was known as a Florida airline. Being the first official airline of the house Mickey built in Orlando and the heart of MIA, presented special circumstances. When times were good, Eastern prospered. However, when the economy tanked, where do most people cut back? Vacation travel of course. Deregulation later in the decade known for tackiness was another nail in Eastern's coffin.

And of course all their labor strife and then the regime of Lorenzo and one can see why the "Wings Of Man" were permanently clipped for good. However, some top flight visionarys rose from Eastern's ashes. One of those being Joe Leonard who is now successfully building Air Tran as a formidable competitor to Southwest.

Had Eastern had better timing and a little luck, they very well could have made a go of it and still be flying today. I could envision Eastern being having a large fleet of 717's, A320's, 757's and even several triple 7's. They would still be the dominant presence at MIA though, chances are they would have ceded their Latin American routes. This is all just my theory. Take it for what it is worth.
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wgw2707
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RE: Eastern And PanAm Shutdowns

Sat Nov 22, 2003 2:56 pm

In my opinion, it was really a huge feud between the labor unions and the airline's management that killed Eastern.

I am suprised however that no one has built up a new airline with the Eastern name as happened with Pan Am and Braniff....

-WGW2707
 
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EA CO AS
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RE: Eastern And PanAm Shutdowns

Sat Nov 22, 2003 6:13 pm

While many airlines have gone into bankruptcy and reorganized, an actual Chapter 7 shutdown and liquidation is rarely an orderly, well-managed affair. The main reason for this is that they only stop flying when absolutely ever last possible source of capital has been exhausted.

This means they only stop operating because they're FORCED to financially...meaning it's at the very last minute, with sometimes less than one hour's warning.

Corporate flashes "Y" messages across every teletype in the system....typically something along the lines of "The company will suspend all flight operations effective (insert time here). Station managers: aircraft and ground equipment are to be secured immediately upon arrival. Secure ticket stock and plates. No amenities are to be provided."

So basically, get everything locked up and turn out the light before you leave.
 
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Aloha717200
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RE: Eastern And PanAm Shutdowns

Sat Nov 22, 2003 6:26 pm

I can't wait to hear what Gr8slvrflt has to say on this thread. He's an ex-eastern employee with alot of info on the airline. I hope he responds.  Smile

What I caught from what he posted is that Eastern was in the process of upgrading their aircraft interiors and IFE at the time of the shutdown as well. Turning a profit was only a few weeks away. Then the gulf war hit, and Eastern announced shutdown almost immediately after.

When you think of it in that light......that had they just a few more weeks they might have made it.....it makes you even sadder.

Worse yet, they had one of the most recognized brand names, along with Pan Am, one of the industry's best paint schemes, a diverse fleet of aircraft (bad for keeping costs down but good for spotting), and a real legacy behind them that only a handful of carriers today can claim.

And yes, another sad aspect is that no one ever tried to restart them. There have been three incarnations of Pan Am. Two of National even. But none of Eastern. Someone must have obtained their operating certificate, but who?
 
srbmod
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RE: Eastern And PanAm Shutdowns

Sat Nov 22, 2003 11:12 pm

Supposedly, the creditors that own Eastern's name and logo rights want a large amount of money for them, which is what stopped Martin Shagrue's attempt at a "New Eastern" in 1992. I would love to see the name revived (I am surprised that Valujet didn't try to use it), but I think the name is not as important as it used to be, and here in Atlanta, the name would bring up some old memories better left undisturbed. As for the O.C., it was surrendered when Eastern folded.
 
FlyGuyClt
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RE: Eastern And PanAm Shutdowns

Sun Nov 23, 2003 3:34 am

What a shame about EA. It was my first interview to be a flight attendant. They treated me like gold. I got the job in August 1986. But Lorenzo was just starting to sink his teeth in and my training class was xcld. I had some friends that did fly until the end. I was commuting out of their place in NYC while flying myself for NWA. They said that recurrent training had been xlcd for the month of January 1991. I said. " ladies pack your bags. The fat lady is in the back room warming up." What a great airline with outstanding camaraderie and history.
 
tommy767
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RE: Eastern And PanAm Shutdowns

Sun Nov 30, 2003 7:23 am

"What I caught from what he posted is that Eastern was in the process of upgrading their aircraft interiors and IFE at the time of the shutdown as well"

I suppose they were switching they're headset jacks on the L-1011 and 757? Maybe even a new interior scheme? Maybe someone could shead some light
 
Ealsys1
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RE: Eastern And PanAm Shutdowns

Sun Nov 30, 2003 7:43 am

I agree with WGW2707. The conflict between labor (Mechanics, Charlie Bryan) and Management (Borman then Lorenzo) contributed to severely weakening the airline. Bryan got into pissing contests with Borman and won then got into the mother of all pissing contests with Lorenzo and brought down the airline rather than give up control. A SAD chapter in Miami business history as well as aviation history.
 
gr8slvrflt
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RE: Eastern And PanAm Shutdowns

Sun Nov 30, 2003 8:07 am

I can't wait to hear what Gr8slvrflt has to say on this thread. He's an ex-eastern employee with a lot of info on the airline. I hope he responds.

Aw shucks! I'm embarrassed now. Anyway, a few corrections:

Too much has been made of Eastern's late use of jets. Actually, Eastern received it's first DC-8s only four months behind Delta (and before Northwest). Eastern's prop-jet Electra's were whooping Delta's butt for nine months before they got jets.

The I.A.M. was locked out on March 3rd, 1989. The pilots and flight attendants, much to management's surprise, walked out in support at midnight. We had no great empathy with the machinists (they had continued to get pay raises while the rest of us were taking cuts) but we were standing up against Lorenzo and Texas Air. By that time, Eastern had already been stripped of System One, London, two DC-10s, six A-300s and the Shuttle had been sold (not yet completed, however). Eastern received no monies from any of these transfers, just junk notes. At the same time Eastern was paying Texas Air exorbitant "management fees" and "fuel surcharges," and even paying to train "replacement pilots" (scabs). Eastern continued to operate some Shuttle and South American flights after the strike began. Chapter 11 bankruptcy was declared on March 9th. Eastern's unions begged for White House intervention but Bush refused.

By the Spring of 1990, Lorenzo and Texas Air had been sent packing. Despite the sale of the Latin American routes, the Company was rebuilding. The paintscheme was modified with a return to wide stripes (without white borders) and no black on the nose. New leather seats were installed in first-class which had doubled in size on most aircraft. New blue and gray coach cabins were being planned. Customer Service received more emphasis than it had in years. Gate areas system wide were refurbished. Meals came back in force (the best I've ever seen in coach!) and Eastern climbed up to the #1 on-time position.

As mentioned, Eastern was supposedly weeks from turning a profit when Iraq invaded Kuwait and fuel prices soared while ridership plummeted. After years of being on the brink, we really didn't think we would actually shutdown for good. Rumors of such started in mid January, though, and of course the day Desert Storm began, Eastern folded.

Plans were publicized for a New Eastern in the mid-nineties but, as I recall, it was decided the Pan Am name had more cache and Pan Am II was born.
 
gr8slvrflt
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RE: Eastern And PanAm Shutdowns

Sun Nov 30, 2003 8:16 am

Oh, and a couple more things:

We got new uniforms for the first time in ten years. AirTran today is about as close to a New Eastern as you'll find. Check out the route maps:

Eastern at the end: http://www.airchive.com/Timetables%20and%20Maps/Eastern%20Compressed/EAmap9101.jpg

AirTran now: http://www.airtran.com/destinations/routemap/index.jsp
 
Guest

RE: Eastern And PanAm Shutdowns

Sun Nov 30, 2003 8:37 am

As an ex-PanAm pilot 1969-1991... I never expected the airline to shut down...
We hoped for a government intervention to save us - "the designed flag carrier" of USA...
We operated unprofitable routes overseas... because Uncle Sam said so...
Our Pacific Division got sold to United... then the DL vultures got the rest.
Even our name got sold, today, a rogue LCC operates with our emblem...
Today here in Argentina, they know I am ex-PanAm...
I owe my position thanks to the reputation of my former airline.
I stayed until the last day, I was stranded in Rio when all went bust in DEC 1991.
xxx
Happy contrails  Smile
(s) Skipper
 
LastBaron
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RE: Eastern And PanAm Shutdowns

Sun Nov 30, 2003 8:38 am

Fascinating reading, Gr8slvrflt! W orked at one of the law firms presiding over Eastern's Chapter 11 proceedings as a proofreader/word processor way back, and we were always amazed at the crap everyone took from Lorenzo...

Tommy767, these may help add to Gr8slvrflt's fascinating posts:

http://www.evair.com/ealhistory.htm
http://www.panam.com/
 
Ealsys1
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RE: Eastern And PanAm Shutdowns

Sun Nov 30, 2003 8:58 am

BTW...The entry of a healthy AA into Eastern's turf (MIA), was one of the last nails in the coffin.

Sam
 
ConcordeBoy
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RE: Eastern And PanAm Shutdowns

Sun Nov 30, 2003 9:22 am

Delta took Pan Am's crown jewels

Hardly.


DL walked off with a FRA-based focus to mostly 2ndary Eurocities, which no longer exist.

UA walked away with Heathrow rights, and flights/focuses in the S.Pacific.


...so whom would you say got the "crown jewels"?  Big grin
 
tommy767
Topic Author
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RE: Eastern And PanAm Shutdowns

Sun Nov 30, 2003 12:03 pm

Thanks Gr8slvrflt, and last baron those posts were meaningful. I was only 4 when eastern and panam died, so the only news I heard watched was a new word on seasme street or a new trip on Mr. Rogers  Big grin

Virtual Eastern? Great idea!
 
tommy767
Topic Author
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RE: Eastern And PanAm Shutdowns

Sun Nov 30, 2003 12:04 pm

Thanks Gr8slvrflt, and last baron those posts were meaningful. I was only 4 when eastern and panam died, so the only news I heard or watched was a new word on seasme street or a new trip on Mr. Rogers  Big grin

Virtual Eastern? Great idea!
 
MD11LuxuryLinr
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RE: Eastern And PanAm Shutdowns

Sun Nov 30, 2003 12:45 pm

What ever happened to Frank Lorenzo anyway?
 
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coronado
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RE: Eastern And PanAm Shutdowns

Sun Nov 30, 2003 1:17 pm

B747Skipper

Nice to see your note.

I had the privilege of being a passenger in numberous PA flights during 77-84 partcularly MIA-CCS, MIA-RIO-GIG, JFK-RIO. I think in 79 I made 13 or 14 separate 1-2 week trips to Latin America--I hate to admit it but I was an international banker in those years--

I also recall although I had some business in Rio, most of it was in Sao Paulo, These flights took place before Guarulhos so way to Sao Paulo was always via switching to a PA chartered 737 for the run into SAO CGH Congonhas and clearing customs in Sao Paulo rather than Rio.

I am sure you were up front on several of the 747's.

During the same years I got to enjoy flying the old Panagra but by then Braniff/Eastern El Interamericano Routes to Panama, Bogota, Quito, Guayaquil, Lima, Asuncion. L1011's and of course the DC8 Flying Colors of Braniff. Heck in those years Ecuatoriana --who remembers them--had bright colors.

Probably the closest you can get to these Interamericano routes nowdays is the COPA network.

Rgds


 
Prinair
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RE: Eastern And PanAm Shutdowns

Sun Nov 30, 2003 1:22 pm

I remember the new interiors....The new EA F seats were grey color with a navy blue border. They were also among the first on any carrier to have a phone at each seat. Meal service had been upgraded in all cabins. Most flights featured a hot meal using ceramic plates and silverware in coach. An extra flight attendant had been added for better service on 757 flights and the size of the F class cabins were doubled. I have kept the seating charts and pictures. The last EA timetable has a picture of the F class cabin and EA had recently issued a booklet brochure detailing the improvements being made to the fleet (coach interiors were being steam cleaned and refurbished until EA was ready to replace them but they never go to). It is a nice book full of pictures and drawings of what they planned.

Unlike it was mentioned above...despite ATL being the largest hub, headquarters was never moved there. It was a MIA airline until that last
day...1/18/91

I had recently transferred to SYSTEM ONE but had many friends and relatives still working at EA. Some of them worked after the closing, packing and storing things.

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