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Texas Air to Take Over Beleaguered Eastern : Eastern to Be Taken Over by Texas Air

February 24, 1986|Associated Press

MIAMI — Eastern Airlines, faced with strike deadlines and loan defaults, today announced that it will be taken over by Houston-based Texas Air Corp., which already operates Continental Airlines and New York Air.

Eastern Chairman Frank Borman would reveal no details about the purchase offer but blamed an uncooperative union for forcing the sale.

"There is tremendous potential in this agreement to make Eastern a much stronger and more competitive airline," Borman said in a statement. "There is no question that the sale was in the best interests of our employees and shareholders." He said the only alternative would have been to file for bankruptcy.

It was not immediately clear whether Borman would play a role in the airline's affairs under Texas Air, although one pilot said, "We understand Borman is resigning."

Machinists' Action Cited

Unions representing pilots and flight attendants agreed to labor concessions demanded by major creditors of the carrier, which owes about $2.5 billion, Borman said. But the International Assn. of Machinists "would not agree to consider any cost relief for the airline whatsoever," he said.

Reaction to today's announcement was mixed among Eastern employees, many of them pointing to Texas Air Chairman Frank Lorenzo's wage-cutting reputation.

"He is, in a word, anti-union," said David Butler, spokesman for the Transport Workers Union, which represents Eastern's 6,200 flight attendants.

Pilots' pact, Page 9.

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