Eastern: The Corpse That Wouldn't Die
Can grounded Eastern Air Lines take off again--and can Martin Shugrue keep his lucrative berth in the pilot's seat? Looks like the weather is awfully heavy. Shugrue, Eastern's trustee in bankruptcy, unveiled plans Apr. 28 to resurrect the Miami-based carrier by using some of its 53 former planes mothballed in the Arizona desert--which belong to creditors--to start a low-cost airline.
Shugrue wouldn't return calls to discuss his idea. Many airline analysts see plenty of hitches, doubting he can raise the needed $100 million. Eastern's unions would likely argue that their costly contracts would be valid even at a "new" Eastern. And debtholders, who must O.K. his plan, are critical--especially unsecured creditors, who may see little cr none of their $1.5 billion in claims. They're still angry that Eastern under Shugrue has burned through $500 million since he started in April, 1990. (Eastern stopped flying in January, 1991.)
Skeptics deride the scheme as the "Marty Shugrue Employment Extension Plan." His salary in this temporary job has bounced around between $30,000 and $50,000 monthly. But though Shugrue isn't kidding, his first court filing about the plan was April Fool's Day.