Eastern Airlines has tentatively decided to go forward with the acquisition of 23 A300B twin-engine widebody planes produced by Airbus Industrie, a consortium of firms of five European nations.
The proposed acquisition, to be presented to Eastern's board of directors and major lenders over the next three weeks, would mark the first major purchase of the European plane by a U.S. airline. (A though made by European firms, Eastern officials point out that 33 percent of the plane's components come from U.S. suppliers.)
In a presentation to the Civil Aeronautics Board yesterday on Eastern's financial woes of the past and its progress of the last few years, Frank Borman, Eastern's chairman and president, said the four A300Bs Eastern has been flying since November under an unusual six-month lease agreement have been "operationally superb."
Under the proposed plan, Borman said Eastern would retain the four planes currently being used on a long-term lease basis and would purchase 19 others: three in 1978 and four each in the years 1979 to 1962.
He declined to name the purchase price - calling the present cost of the A300 a "deeply guarded secret" - but he noted that the deal "comes complete with European money which is a very nice feature."
Borman also said he believed theSolution to the weight problem the A300s had encountered at [WORD ILLEGIBLE] port in New York is at [WORD ILLEGIBLE] Port Authority there said the [WORD ILLEGIBLE] runways could be severely damaged if fully-loaded A300s were to use them.
On another topic, Berman said Eastern was seeking CAB approval to discontinue its Super No-Frills discount fare of $55 between New York and some Florida cities because it is uneconomic.
While traffic on the route in January was up by nearly 20 percent over January a year ago, revenues fell and Eastern lost $1.7 million in the affected markets. "In the prime season!" Borman noted. There were up to 40 percent no-shows on some flights, he said.
To replace the fare, Eastern is proposed a "souped-up" super Saver fare to Florida for a wider group of potential travelers. The new fare will apply from all Eastern's northern cities, including Washington, to all the Florida cities served by the carrier.
Assuming CAB approval, passengers could save 40 percent of the regular fare on day coach and 50 percent on night coach Monday through Thursday. Friday through Sunday, the savings would be 30 percent on day coach and 40 percent night coach. In addition, Eastern is proposing a 20 percent discount for first-class travel.
Instead of ordinary 30-day advance purchase requirement for the Super Saver, Eastern is proposing to cut it to seven days and would require travelers to stay at their destination until the first Sunday after the day the rip started.
During his presentation, Borman noted that "Eastern has been perceived as an inefficient carrier," and admitted that had been true. "But Eastern is a different airline today than it was a few years ago," he said.
Although Eastern still has a serious financial problem stemming from a poor performance over the last 20 years, Borman said the company made real progress between 1973 and 1975. As a result, he noted, 1976 and 1977 were the best two years in the company's performance.