Real estate tycoon Donald Trump announced Friday he has completed a new deal to buy Eastern Airlines' prized Northeast shuttle for $365 million.
The price is the same Trump agreed to pay last October in a tentative accord with Texas Air Corp., parent of strike-torn Eastern, but the final deal increases the number of Boeing 727s Trump will buy to 21 from 17.A used 727 currently fetches around $4.5 million to $6 million, indicating Trump was getting $18 million to $24 million more in assets for the same price.
"I am delighted to complete this transaction and very much look forward to building an airline that provides superior service for all consumers," Trump said in the statement. "Our goals will be synonymous with quality and reliability."
Last week, Trump sought to cut the original $365 million price tag by a third because he said the continuing strike by Eastern's machinists, supported by its pilots and flight attendants, had eroded the shuttle's value.
Texas Air countered by telling Trump it would look for other buyers of the service.
The new agreement still must be approved by the federal bankruptcy court, where Eastern is reorganizing under protection from creditors. The Trump Organization said it hoped to close the deal within 60 days.
Eastern President Phil Bakes praised the agreement in a statement, saying it proves "that the value of Eastern's assets remains high and continues to be attractive to various parties."
"With the proceeds derived from this sale, we will be better able to continue the building of Eastern into the strong, competitive airline we are committed to creating," he said.
The long-delayed shuttle deal and indications that a group led by outgoing Baseball Commissioner Peter V. Ueberroth might still be in the running to acquire the rest of Eastern could indicate the sale of the strike-bound carrier - a goal sought by its unions - is a foregone conclusion, some union officials said Friday.
Before the strike, the shuttle serving New York, Boston and Washington was Eastern's only profitable operation.
Eastern's unions, which have crippled the airline by honoring a strike by its machinists since March 4, have made the wholesale purchase of Eastern a priority in their battle against Texas Air Chairman Frank Lorenzo.
The unions long have claimed that Lorenzo - whom they revile as a union buster - has been trying to strip Eastern of its assets and funnel them to sister company Continental Airlines, a non-union carrier.
Before and since Eastern sought protection from creditors in federal bankruptcy court on March 9, the unions vigorously have opposed any separate auctions of Eastern assets such as planes, airport gates and landing rights.
The recent talks could indicate a sale is a likely conclusion and that it would be a single deal for the entire airline, the unions say.