Delta Air Lines Inc. has emerged as the early beneficiary of Eastern Airlines' collapse, buying more space at its already strong Atlanta hub.
Eastern, a unit of Continental Airlines Holdings Inc., stopped flying Friday night after nearly two years in Chapter 11 bankruptcy protection. On Monday, Delta said it will buy 18 Eastern gates and related support facilities at Atlanta's Hartfield International Airport for $41 million."Delta's got (Atlanta) to itself for a long time," said PaineWebber airline analyst Edward Starkman.
But Delta will not be alone in sharing the spoils, Starkman said, even if Eastern does not have all that much to offer.
Dallas-based AMR Corp.'s American Airlines and New York-based Pan Am Corp. should benefit most in Miami, where Eastern was based, analysts said, because they have already moved to beef up their presence there.
USAir Group Inc., in the meantime, should pick up Eastern's slack in Charlotte, N.C.
The spoils, however, will not be all that great: at the end, Eastern had only 4 percent of the U.S. industry's capacity and had a lot of old aircraft.
The choice Eastern aircraft are its Airbus Industrie A300s and Boeing 757s, Starkman said, with its McDonnell Douglas DC-9s and Boeing 727s likely to fetch little more than "bargain prices."
David Pizzimenti, an analyst at Nomura Research Institute, said that 40 percent to 50 percent of Eastern's jets "won't make it back into the system," because they are too old.
Duff & Phelps analyst Robert Decker said carriers with strong balance sheets such as UAL Corp., parent of United Airlines, are likely to make bids for select pieces of Eastern, including slots at New York's La Guardia airport.