Another Eastern Airlines? Really?

Eastern Airlines died on January 19, 1991. And then it was brought back in 2016-17 and went bankrupt, and now it’s on its way back again.

This time Eastern Airlines LLC has new owners and they have ambitions to operate long haul point to point operations from JFK.

Using 767’s and older 772’s – the first will be an ex-Kenya Airways 772, and they should have five of the type by May 2020, they’ll fly to destinations like Guayaquil, in Ecuador, Juneau Alaska, and secondary routes in China like Jinan.

If these routes were viable someone would already be doing them. What makes Eastern think this is the way to go?

On top of the old 772’s up to 50 767-300’s are planned. Let’s keep that word, ‘planned’ exactly where it needs to be.

About 4 years ago I dissected a plan by a Miami based consortium to operate old 744’s on US domestic routes. They got a fair way along persuading big investors this was a good idea.

It took a three page report to dismantle the math behind this utterly ridiculous concept. Even if they charged $150 per person each way in a fully loaded all economy seating on a 744, (and they planned $80 each way) it’s hourly cost was some 11% higher than than the revenue. It would never make a cent. And it never happened.

While we might admire the gall of anyone who proposes an airline like this and fudges the figures to make it look viable, it’s doomed. I can’t see how they don’t know it.

Partly I blame the leasing companies – they don’t care what happens because they can get the asset back and maybe make a few dollars while it lasts. It’s better than having old aircraft sat in storage.

A huge number of people will be sucked into this enterprise. It’s their willpower and work that will convince them to carry on, even when they know it’s going down. Participants are blinded by their own commitment.

Add to the mix the overly optimistic founders, charismatic leaders, persuaders, who can convince anyone of anything – including themselves.

This is just one more of those doomed airlines that should never be allowed off the drawing board.

Call me cynical, but you know if you read and anything else in aviation – that airlines rarely make money unless they have high demand on near-monopoly routes. It’s estimated half of all global airline routes are supported by just 10% of the most profitable.

Airlines don’t kill off a route unless it looses money. Break even is fine, but few are genuinely profitable. Eastern is launching into the early side of a US recession – all the red lights are flashing and Trump is panicking.

All I get from analysts about the Eastern proposal is a shrug of the shoulders – one said – “it’ll make headlines when it fails, for a day, I suppose”.