1978 Airline Deregulation and the Future of Eastern Airlines – June 17, 2011

1978 Airline Deregulation and the Future of Eastern Airlines

Shortly after the jet age, Eastern Airlines faced the effects of airline deregulation. The1978 Airline Deregulation Act shifted control of air travel away from the government and into the consumer market. This time period was significant for all airlines, and with the help of the Civil Aeronautics Board (CAB), allowed passengers to enjoy the benefits of competitive rates because of the market forces present in the airline industry. The FAA still had power over airline safety, but now airlines were free to “play” in the open market and could set their fees to compete with other airlines – instead of following those set forth by the Civil Aeronautics Board.

This forced Eastern Airlines into a competitive low-fare environment and the airline would soon struggle with financial issues. Even though the airline was headquartered in New York City, its large hub in Atlanta soon became the target of direct competition from Delta Air Lines.

In June 1975, Eastern Airlines Flight 66 crashed near John F. Kennedy International Airport in New York City, killing 115 people. That afternoon, the area had experienced severe thunderstorms and the downbursts of wind had made air travel particularly dangerous. Even though two other flights had reported problems trying to land at JFK that day, the air traffic controllers had ignored the warnings and decided to keep the runway open. Eastern Airlines Flight 66 was approximately a mile away from the runway when it was pushed downward by high wind speeds. It was flying in from New Orleans. Seven passengers and two flight attendants survived the crash, but all of them had serious injuries.

Time for a history lesson—–

The Eastern Airlines flight, described above, was flown from New Orleans to NYC and crashed because of what was probably a microburst. This accident occurred in 1975 and in 1982 Pan AM flight 759 crashed departing New Orleans. The two accidents occurred for the same reasons—microburst. The National Transportation Safety Board determined that the probable cause of Pan Am’s accident was the aircraft’s encounter with a microburst-induced wind shear during the liftoff, which imposed a downdraft and a decreasing headwind, the effects of which the pilot would have had difficulty recognizing and reacting to in time for the aircraft’s descent to be stopped before its impact with trees. Contributing to the accident was the limited capability of then-current wind shear detection technology; this, along with the similar crash of Delta Air Lines Flight 191 three years later led to the development of the airborne wind shear detection and alert system and the mandate by the U.S. Federal Aviation Administration have on-board windshear detection systems installed by 1993.

Now you know the rest of the story on windshear detection systems so, back to our story………………

By the 1980s, Eastern Airlines became the official airline of Walt Disney World and had adopted the slogan, “If You Had Wings” for all passengers enjoying a trip to Disney’s Magic Kingdom. During the 1980s, the airline was also being run by Frank Borman, the new president and a former astronaut. By this time, the airline had inaugurated a hub at San Juan (at Isla Verde International Airport) and in 1982, had acquired the Braniff International’s South American route network.

Eastern lost a lot of money when it started competing with the low-cost airlines, especially People Express which was able to cut its fares drastically by offering “no-frills” service. Ultimately, the airline was unable to keep up. In February 1987, the FAA imposed a $9.5 million fine against Eastern Airlines for various types of safety violations.

In an effort to recover and generate more revenue, the airline offered “Moonlight Specials” where passenger seats would become available for overnight passengers between midnight and 7 a.m. with stops at 18 cities. This was a “bare bones” type of service and designed to attract budget-conscious travelers.

Still, the airline continued to struggle financially and ended up laying off approximately 4,000 employees by 1988. It dealt with some hard blows including layoffs, the effects of canceled flights from strikes, and an inability to compete effectively after deregulation. The airline filed for bankruptcy protection in March 1989. In January 1991, the airline had made the official decision to shut down operations and an asset liquidation sale took place later that year.

Next week we continue the series on Eastern Airlines and I will let the ads of the time tell the story. Until then take care and fly safe.

Robert Novell
June 17, 2011