Earning Wings the Hard Way ,

By Janice Castro.

The anxiety showed in the faces of the flight attendants last week as they checked the bulletin board in the Eastern Air Lines office at Miami International Airport. Posted was a list of the names of people losing their jobs. As part of a major cost-cutting program, the financially strapped airline had just announced that it would furlough 1,010 of its 7,200 flight attendants. Said Wilfred Tirado, seeing his name: "I have a $763 monthly mortgage and a two-month-old son. Now what am I going to do?" In other airports, 23,000 additional Eastern workers, including reservations clerks and ticket takers, learned that their salaries were being rolled back by 20%.

At almost any unionized company, cuts like these would have raised the specter of an immediate strike, but not at Eastern. Weeks ago the flight attendants' union pledged that it would not strike before March. Reason: Eastern is staggering under a $2.5 billion debt load, and its creditors have threatened to call in some of those loans on Feb. 28 if the airline has not substantially reduced its labor costs by then. If the loans are not renewed, Eastern could be forced into bankruptcy proceedings. The company's employees, who hold two seats on the board of directors, know all too well just how perilous the state of Eastern's finances are.

While none of the airline's 60 creditors want to see the company go under, each is demanding results, and fast. In 1985 Eastern eked out a tiny $6.3 million profit on revenues of $4.8 billion, but during the final three months of the year the carrier lost $67 million. Says Louis Marckesano, an airline- industry expert at the Philadelphia-based investment firm of Janney Montgomery Scott: "The banks are not playing games. They want more reassurance from Eastern, and they want a game plan that shows how the company will make money."

That may have to be a game plan worthy of a Super Bowl champion. For more than a decade, Eastern has failed to come to grips with the changing realities of the airline industry. Even prior to 1978, when U.S. carriers were still regulated and fares were set by a benevolent Civil Aeronautics Board, Eastern often slipped into the red, and it barely avoided bankruptcy in 1975. Says Wayne Yeoman, Eastern's senior vice president for finance: "It took a lot of skill and cunning to lose money in a regulated environment."

It does not take a great deal of skill, however, to do so in today's - deregulated skies, where profit margins keep growing slimmer and the competition keeps getting tougher. To survive, several airlines have been seeking merger partners. Only last year, after an earlier brush with default, Eastern discussed the possibility of a merger with TWA.

Last week NWA Inc., the parent company of Northwest Orient Airlines, agreed to buy Republic Airlines for $884 million. The combination of the two carriers, both based in Minneapolis, is a good fit. Primarily a long-haul operator, Northwest would benefit from adding Republic's shorter Midwestern and Southeastern routes. If approved by the companies' shareholders and the Department of Justice, the deal would create the fifth-largest U.S. airline in terms of passengers, behind United, Eastern, Delta and American.

Many factors are responsible for Eastern's financial woes. They include overaggressive expansion, excessive borrowing for new aircraft, and a reputation for mediocre customer service. One crucial mistake was made during the '70s, when the company delayed modernizing its aging fleet of fuel- guzzling planes. By the time Eastern stepped up purchases of new fuel- efficient aircraft in 1972, it was facing steep replacement costs of up to $35 million for each 293-seat L-1011, and was short on cash. Says company Chairman Frank Borman, a former Apollo astronaut: "We had a substantial job of rebuilding to do. Our debt would not have gone up had we been profitable."

More recently, labor costs grew too quickly. While Pan Am and United have withstood expensive strikes in order to win cost concessions from their workers, Eastern has kept flying by allowing salaries to spiral upward. Since 1979, in fact, pay for the carrier's employees has risen by 50% or more. One result: Eastern's pilots make an average of $112,535, while their counterparts at People Express are paid $60,000 to $90,000.

Determined as they are to keep what they can in salaries and benefits, the airline's employees understand that the threat of bankruptcy is very real. They hope to start up new negotiations with Eastern's management and reach a compromise on pay.

As Eastern's workers fretted over last week's layoffs, they wore lapel buttons, distributed by the unions, that read: WE STAND TOGETHER. But that defiant-sounding message is printed on a peel-off sticker. If the new talks yield a settlement satisfactory to the workers, they plan to remove the stickers. The buttons would then show Eastern's familiar blue logo and a new message: WORKING TOGETHER. Rather than strike, the airline's employees want to keep on earning their wings every day.

With reporting by Marcia Gauger/Miami and Thomas McCarroll/New York