Eastern Airlines will be forced to close down or file for protection under federal bankruptcy laws if its entire work force does not accept 15 percent wage cuts effective Nov. 1 and other concessions later, Chairman Frank Borman said yesterday in a videotaped message to the company's 37,500 employes.
"He told them we have three choices," said Richard McGraw, senior vice president for corporate communications. "One is to shut the airline down, one is to file a Chapter 11 bankruptcy petition and try to operate like Continental Airlines and the only really viable option is to approve a 15 percent wage cut."
On Saturday, financially troubled Continental announced that it had filed for reorganization under protection of federal bankruptcy regulations and temporarily suspended domestic flights after posting losses of $471.9 million since January, 1979.
In Houston yesterday, Continental announced that it will resume service to 25 U.S. cities today under protection of a federal bankruptcy court, halving top employes' salaries and offering $49 one-way domestic fares this week.
Continental will have 27 percent of the flights it had before filing its reorganization petition, President Frank Lorenzo said. Domestic service is being slashed by two-thirds, and only about 35 percent of the airline's 12,000 employes will be on the job. More will be added as the company rebuilds, he said.