Eastern Airlines Chapter 11 Summary

The hostile takeover and chapter 11 failure of Eastern Airlines was just the icing on the cake for people who didn’t exactly love Mr. Lorenzo. At the time Eastern was the third largest carrier in the United States (Bernstein, A). Union busting was the avenue to create animosity between labor and management, which Mr. Lorenzo used to his advantage (Weiss, 2017). Due to the animosity, Eastern Airlines was forced into Chapter 11 and employees went on strike. Employees refused to return to work even though the unions agreed to a contract. This was the employee’s way of punishing Frank Lorenzo, even though he had already destroyed a legacy carrier called Continental. Union leaders were will to risk everything to fight against Frank Lorenzo, and this was intended to for him to cede control of Eastern (Weiss, 2017). Employees of …show more content…
This trait resulted in the rapid recline of Eastern Airlines and eventually was the ended of a legacy carrier. The mindset that Frank Lorenzo had was way before his time and as a result many others never understood what he was trying to do. Many airlines in the 1980 were affected by the management traits of Frank Lorenzo. Some of these airlines were able to get away with just a chunk taken out of them. Whereas, other airlines never managed to get away from him and were eaten alive. One reason airlines took on Frank Lorenzo to help the airline is because no one was talking about cutting costs (Salpukas, A). No one ever realized that by allowing Frank to cut costs with the airline would result in him making the airline struggle even more. The effect Frank Lorenzo had on the aviation world is still being felt today, and this is because of the way some of the most important airlines went bankrupt. Eastern airlines was known worldwide and have attempted to return, but have struggled because of the fear of someone taking them over again like Frank did. This makes airlines double guess themselves when they think about expanding