Wing Shot

Eastern stays aloft--at a price

Only five hours before a midnight deadline last week, Eastern Air Lines avoided a potentially ruinous strike that would have grounded many of its flights just as the peak Easter season was getting under way. But the cost was enormous. Eastern had offered members of the International Association of Machinists and Aerospace Workers, which represents 13,500 mechanics, baggage handlers and other ground personnel at the airline, a 25% raise spread over two years, starting with a 6% hike in April. The union rejected that package. Instead it wound up with a 32% raise by 1984, including an immediate pay hike of 21% made retroactive to January. The base wage of Eastern's mechanics will rise from $13.15 per hour to $17.40, making them among the highest paid in their industry.

The lavish settlement will weaken the carrier's already fragile finances. In the past three years, Eastern, which hauls more passengers than any other U.S. airline, has lost $158 million and run up a long-term debt of $1.9 billion in an aggressive program to expand and modernize its fleet. Voicing "grave concern" at the cost of the pact, Chairman Frank Borman fretted: "Ordinarily, an event of this nature is cause for satisfaction and relief on the part of both parties. Unfortunately, such is not the case in this agreement."

Eastern's workers felt they had been sacrificing long enough. When the airline was nearly bankrupt in 1975, Borman persuaded his unions to take a one-year wage freeze. Over the past three years, they agreed to defer 3.5% of their pay because the airline was losing money. Now that mechanics have won a big pay hike, Eastern faces a new round of tough negotiations with its 6,300 flight attendants. This file is automatically generated by a robot program, so viewer discretion is required.