Eastern Air Lines Inc., in the latest twist to its troubles, announced Friday that it is eliminating service to 14 cities and may lay off 4,000 workers.
The airline, which was acquired by the Texas Air Corp. in 1986, has been plagued by disputes with its three major unions and by a falloff in passenger traffic after the Federal Aviation Administration began a complete inspection of its operations in April.Below is a chronology of key events in the airline's history.
- 1938: Firm is incorporated in Delaware and acquires the assets of the Eastern Air Lines Division of North American Aviation Inc.
- 1975: Frank Borman, a former astronaut, is named chairman of the company, which was suffering from the effects of the oil crisis and a flat economy. Eastern loses $95.6 million for the year.
- 1978: The Airline Deregulation act increases competition within the industry by allowing low-cost carriers to enter the transportation field. Eastern posts a $67.3 million profit.
- 1984: Eastern threatens to declare bankruptcy and reaches an agreement with employees calling for pay cuts of up to 20 percent in exchange for board representation and stock ownership.
- 1986: Texas Air Corp. acquires Eastern on Nov. 25. Frank Borman leaves as chairman and Texas Air Corp.'s controversial chief, Frank Lorenzo, takes control of the company, creating with his Continental Airlines the nation's biggest air carrer.
Eastern posts loss of $130.8 million.
- 1987: Eastern reduces system-wide capacity by 12 percent and reports loss of $181.7 million.
- March 1988: Eastern pilots union explores possibility of taking over Texas Air.
April: FAA announces massive investigation of Eastern's ability to carry commercial traffic. It later clears the carrier of any major safety violations but says the company's poor relations with its unions could create problems in the future.
May: Texas Air and Eastern announce $1.5 billion lawsuit against Eastern's unions, charging an illegal attempt to take over the airline.
August: Eastern announces elimination of service to 14 mostly Western cities and says it may lay off 4,000 employees.