I’m just a fanboy that wants his favorite airline to come back; this time stronger. I also want to suggest what the current owner of Eastern, Swift Air should do with it.
It’s hard to accept that the the revived Eastern Airlines, which looked like it had a lot of hope in 2015 is for all intents and purposes, no more. It gave up its FAA certificate in September.
And yet, the first two Eastern planes still have the Eastern livery for the time being, so the name is still up in the sky.
So, what happened and can Eastern arise from the ashes…again?
In my previous post, I lamented the loss of Eastern 2.0. This post is about my own views on the demise of Eastern 2.0 and what could be done to bring it back. I’m not an expert in aviation, I’m just a fanboy that wants his favorite airline to come back; this time stronger. I also want to suggest what the current owner of Eastern, Swift Air should do with it.
Maybe try scheduled and charter service at the same time. This version of Eastern started as a charter airline with the the intent to become a scheduled carrier in a year. The charter business seemed to be going well, with a focus on the opening market to Cuba. When Eastern tried to get certification from the FAA to become a scheduled airline, it was deferred. In talk with folks, this was the first sign that something was going wrong. What happened? We don’t know. We do know that it seemed to start the downhill slide that would lead to founder Ed Wegel leaving (or fired?) Eastern in October.
One wonders what would have happened had they done charter and scheduled service at the same time. Startups like Sun Country and jetBlue went immediately to scheduled service; so did Frontier, another restart of an old airline. I wonder what would have happened if Eastern 2.0 began scheduled flights from Miami to destinations in the Caribbean other American cities?
I could see an Eastern 3.0 that would operate scheduled flights from Miami to San Juan, Puerto Rico which has always been a major destination for Eastern. There would also be scheduled flights between New York and Miami and New York to San Juan. Additional flights could be Miami to Santa Domingo or New York-Santa Domingo, Miami/New York to Punta Cana. Those are the most obvious places to begin and you would grow from there. I wonder what would have happened had Eastern 2.0 used this approach. One of the problems with the charter business that was focused on Cuba was that policy with the island would change under Donald Trump. When he became President, airlines started scaling back fearing that flights would be cut back under Trump which is exactly what happened. The change in policy took a revenue stream away and that caused issues.
Swift could consider starting scheduled flight with the Eastern name with the two jets it has. Start a small division that offered scheduled flights. Since Swift has been in the business longer, it might be able to get FAA certification for Eastern that it could not get on its own. For that to happen, though, people need to speak up.
Find investors that care about aviation and not simply making a quick buck. In 2009 businessman and investor Ted Vallas was hoping to get his airline which had been a dream since 1980 off the ground. California Pacific Airlines was to fly to destinations in the Western United States and Mexico by 2010 or 2011. The proposed airline was to be based in Northern San Diego County in what would be a second airport for the San Diego area. Vallas wanted to pattern his airline after the old Pacific Southwest Airlines, the San Diego based low cost airline which served the Western United States from 1948 until its merger with USAir in 1988.
What made this all the more interesting is that Vallas was 89 years old at the time.
Vallas is considered the chairman of the airline, but not its CEO. He is using his own money as well as other investors to get the airline off the ground.
It’s a good thing Vallas had a lot of money because the airline didn’t get off the ground in 2010 as planned. What happened? The FAA. California Pacific had its application rejected and the 2013 government shutdown made it harder to get through the FAA.
After years of wrangling, California Pacific purchased an existing airline, which allowed them to get the FAA certificate they need. The hope now is to have scheduled service to begin in April 2018. Vallas is now 97.
Why am I sharing this? Because it shows an investor that had a dream and the resources and was insistent in making that dream come true. Profits weren’t the immediate goal, getting the dream off the ground was.
The primary dreamer at Eastern was Ed Wegel, but he was not the chief investor. Other people were investors and from what I’ve learned they did not have Vallas’ excitement; they seemed more interested in making a fast buck more than anything else. When Wegel left, the dream left with him. The investors didn’t seem to know what to do with Eastern and when things started going south, as they already were, they were more interested in getting rid of it than making sure the airline survived.
What Eastern needed was its own Ted Vallas who had a dream and was willing to do what it takes to succeed. Businesses sometimes take a long time to grow and it becomes a labor of love. Airlines have to be labors of love because the profit margins are slim- about 2.9 percent in 2017. But some of the investors wanted immediate results and when Wegel couldn’t produce them because of things beyond his control, Wegel was out of the picture and the investors, who had no vision to begin with, gave up. It also didn’t help when Eastern was sold to Swift, they also had no vision of what to do with what many consider a valuable name. In some ways, Eastern failed because it didn’t have enough of the right people caring for it.
Going for the charter business first seemed like a good idea and it was a way to get up and running quickly. But if you do that you have to do one simple thing, which leads to my next thought:
Don’t crash the plane with the potential Vice President on board. In late October of 2016, just days before the general election, a chartered Eastern jet carried on board Mike Pence, the former Republican governor of Indiana and then vice presidential candidate. The Eastern 737 was making a landing at New York’s La Guardia Airport when it skidded off the runway. There were no injuries, but this wasn’t good news for the airline. Pictures of the Eastern jet with the Trump/Pence logo and the telltale Eastern shades of blue were plastered on the news. If you’re a charter airline, you depend on companies to give you business. Crashing a plane that carries major political figure isn’t the way to drum up needed business. In June of 2017, the National Transportation Safety Board’s initial findings showed the plane basically overshot the runway. When it finally touched down there was hardly any runway left. Again, not good press to have. If you’re a travel company, do you want to charter with a company that have pilots that overshoot runways? Nope.
Eastern should had as its goal to be a low cost airline. Low cost airlines are all the rage these days and Eastern probably should have gone that route. But not in the way of Spirit Airlines with its bargain basement approach or even Southwest. Instead, it should seek to be more like jetBlue, with a more upscale or “shabby chic” approach. People want affordable airfare, but they don’t want to be treated like cattle. So offer some of that Eastern charm at a lower cost. Be Target in the air.
I should add that I don’t think the most of the blame rests on Ed Wegel. No one is perfect, but for the most part he did all the right things. Airline experts doubted he could do the impossible, but he did. At its highpoint the airline had 6 planes and over 200 employees. What happened was that other people in the leadership ran the airline poorly after Wegel left and took it from a promising startup to closing in a year. I think that such mismanagement demands accountability.
What happens now?
I’ve been hearing talk about remembering the good times and hoping for someone to try again. But I think more should be done than reminiscing. Reminiscing doesn’t change the fact that what happened with Eastern was wrong. That should not stand. I think its time for action.
Since Swift supposedly owns Eastern, people could contact Swift . I’ve written emails to leaders in Swift management and if there are enough people doing that, they might consider making a go of Eastern, maybe this time as a scheduled carrier. It could be run as a virutal carrrier. Yes, people say its hard to start a new airline, but I’ve never been one to listen to naysayers. Minnesota-based Sun Country has started, failed and restarted a number of times and it is still flying. I think that instead of looking at the odds, you have to look at what market it can fill and just try.
Another option is a bit more radical: crowdfunding Eastern 3.0.
People have used crowdfunding sites to start businesses and that includes airlines. The record has been mixed: Zing Airlines a proposed Canadian startup, failed in its fundraising in 2015. However, POP airlines a proposed carrier offering flights from London to two destinations in India, was 85 percent of the way to its funding goal in 2016. I think that there are enough fans and former employees of Eastern that could be tapped to raise money for a startup and even seek an aviation-minded investor.
Eastern 2.0 is done. The reason I think there should be a 3.0 is because bad management did it in. It died because no one cared for it. I can understand if it gave it a go and didn’t make it, but this case it never really had the chance or given the chance to grow. I hope that there is someone is willing to take a risk and do something crazy to allow a storied name to have another chance in the sky.
Eastern 3.0 can happen: if there are people who are crazy enough to try again.
Postscript: My first post on Eastern was written in sadness, but this one is written more in anger. If Eastern wasn’t doing well, then it should have honestly shut down. I think people would have understood that. But it feels like the owners of Eastern didn’t really care if the airline lived or died. They gave up. There also seems to be some dishonesty in the sale. The leaked email said things like the “next exciting chapter in the Eastern story.” But that seemed to be crock of you-know-what. The next exciting chapter was basically to shut down.
The actions of the owners had repercussions. People lost jobs because of this.
But I also wrote this to hope that people would get mad enough to do something. Write an email/letter to Swift asking they keep the Eastern brand alive in some form. Create a crowdfunding campaign to start Eastern again. But don’t just mope. Eastern was left to die and that is not right. I think it is up to the fans, former employees and investors to make this right.