HistoryCommercial Aviation HistoryWhy Did Eastern Airlines Fail?

Why Did Eastern Airlines Fail?

Eastern’s Demise Was Painful to Watch, No Matter Who You Were

It was the airline that was destroyed by infighting and a soft economy. The airline was headed by World War I ace Eddie Rickenbacker. For a time, Eastern Airlines was known for high-quality service with innovative technology. The airline was the first to fly the Lockheed L-1011 and the Boeing 757. Over 60 years, the airline went from one of the ‘big four’ airlines in the US to a failure.

On 18 January 1991, Eastern Airlines permanently suspended service.

But why?

What happened to Eastern?

By early 1991, Eastern Airlines had been flailing for a few years. As we previously chronicled, labor relations at the airline were toxic – a combination of challenging management and labor unions that didn’t see eye to eye. CEO Frank Lorenzo was despised by most employees. The labor disputes led to a strike in 1989. This CBS video from 1989 covered the event. Although the airline resumed flying after the strike, the airline never recovered.

Labor and Cash Pressures Doomed Eastern

In addition to complex labor relations, Eastern also struggled with high debt. The airline flew in markets with intense competition. The airline also had a mixed fleet of gas-guzzling DC-9s, 727s, and L1011s. When you added in a softening economy brought on by high oil prices due to Iraq’s invasion of Kuwait, it was a recipe for disaster.

When the airline originally shut down, some people held on to the false hope that it would resume service with an additional investment of capital. That wasn’t to be. The airline that Eddie founded never flew again. Below is a news report from the day the airline shut down.

Eastern Returned sorta…Twice

Although the original Eastern Airlines never flew again, a second incarnation began operating under the same name in 2015. The famed hockey stick took to the skies on a Boeing 737-800. The airline mostly flew charters with scheduled service from a few US markets to Central American destinations.

The airline never reached the level of success its predecessor did. The most notable aspect of the airline was that it flew Vice President Pence during his campaign. This second version also ceased service in 2017. Its assets were acquired by Swift Air. Swift then sold the rights to the Eastern name to Dynamic Aviation.

The third iteration of Eastern Airlines took to the skies in 2018. Based at Kansas City International Airport, the carrier operates a small but eclectic widebody fleet made up of four Boeing 767-300ERs and two Boeing 777-200ERs.

In 2023, the company expanded into cargo with the acquisition of Hillwood Airways, which was rebranded as Eastern Air Express. Operating as a subsidiary of Eastern Airlines, Eastern Air Express flies a fleet of 19 Boeing 737 freighters, including four -300s, ten -400s, three -700s, and two -800s.

Today’s Eastern Airlines is firmly charter-focused. Its flying centers on government and military missions, sports team travel, cruise ship charters, and ad hoc long-haul work when large-capacity lift is needed on short notice. The airline has periodically experimented with scheduled passenger service, but it has never been the core of the operation or a model it has sustained long term.

Eastern Air Express, meanwhile, is a pure cargo operation. It handles domestic and regional freight routes, contract flying, and overnight logistics support. Like its parent company, it does not operate scheduled passenger service. The airline also conducts flights on behalf of the United States government, including participation in deportation operations for Immigration and Customs Enforcement (ICE).

Despite sharing the storied Eastern name, neither Eastern Airlines nor Eastern Air Express has any legal or operational lineage connecting them to the original Eastern Air Lines that ceased operations in 1991.

Eastern Airlines US military charter
IMAGE: Eastern Airlines

EDITOR’S NOTE: This article was originally published on 18 January 2021. It was updated with new information on 18 January 2026.

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1 COMMENT

  1. I remember that day. I worked for Eastern 79-81, but became a builder with Arvida. I was in Atlanta for the Builders’ Show when the shutdown occurred having flown up on EAL. Had to go standby back to MIA on Delta. A sad day. Unfortunately, EAL’s demise started a long time ago when Eddie Rickenbacker invested heavily in the Lockheed Electra turboprops instead of waiting for the jet age. Delta held back with their clunky propeller driven planes and skipped the turboprops. Then the constant fighting between management (Borman) and the Unions (Charley Bryan) surely didn’t help. The atmosphere was toxic. It was like two separate companies. I saw it firsthand a decade before they pulled the plug.

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