When Eastern Airlines returned to the skies in January, the newly revived brand didn’t know that a global pandemic would soon halt nearly all air travel around the world. Yet while COVID-19 has grounded most flights from major airlines, Eastern has found a way to keep busy, working in partnership with the State Department to help bring stranded U.S. citizens home from Central and South America.
For those who remember, the name Eastern Air Lines (formerly spelled as such) sparks memories of the golden age of air travel. A prominent player for most of the 20th century, the Miami-based airline hit its peak in the 1950s before bankruptcy grounded its fleet in 1991. An initial attempt to relaunch, in 2015, was short-lived, but in January, Eastern returned with a flight from Guayaquil, Ecuador, to New York City, along with a whole new look for the 21st century. The airline planned to introduce its next flight, from New York City to Georgetown, Guyana, in mid-March, and another route to Cabo San Lucas, Mexico, later this year.
Then the pandemic hit, and Eastern had to re-strategize. As airports around the world began to close, thousands of American tourists became stranded abroad. The State Department reached out to Eastern to help get citizens home from Guyana after the airline successfully flew charters to return medical students based in Grenada and Panama City to the U.S. in early March. The airline then started a repatriation flight from Georgetown to Miami on March 13. This came just as the State Department launched a repatriation task force on March 19, ordering a plan for government-funded charter flights to be conducted by commercial airlines. Repatriated passengers would be expected to eventually pay the government back upon their return.
Eastern saw an opportunity. Unlike other airlines that are operating repatriation flights and determining fares based on an agreement with the federal government, Eastern sets its own fares and only works with the government to determine how many passengers to expect on each flight. Its repatriation flights cost up to $ 2,000 one-way, which CEO Steve Harfst says is because the airline flies the planes from the U.S. empty, so passengers are essentially paying for a round-trip ticket. The cost is relatively comparable to other airlines, with examples that include a $ 1,000 United flight from Lima, Peru, to Houston, and nearly $ 1,500 from Marrakech, Morocco, to any of ten U.S. cities via various airlines, according to NPR.
Since Eastern’s inaugural flight, it has returned 17,013 passengers on 102 flights from 15 countries across Central and South America, including Peru, Argentina, and Nicaragua. It has also flown 3,412 non-American travelers from the U.S. to their home countries. On average, repatriation flights have been 68 percent full, and the airline hasn’t turned a significant profit. “On some of the flights, we’ve lost money. Some of the flights, we haven’t. On average we’re probably just barely above breakeven,” Harfst says. “We make a commitment to fly the flight, so we’re somewhat taking a risk and believing that the U.S. embassy is being real with the numbers [of passengers] that they expect. But if 30 people showed up, we’d still fly the plane.”
Coming from a fledgling airline with fewer than 200 employees, this initiative is surprising. Before the pandemic, Eastern was banking on business from a specific demographic: adventurous millennials. Calling itself the “explorer brand,” it hoped that a combination of budget fares to underserved adventure locales, a liberal baggage policy (one bag of up to 70 pounds free of charge), and smart marketing would win over a generation that prides itself on spending money on experiences, not stuff. Eastern’s 2018 internal study deemed Guayaquil, Georgetown, and Cabo San Lucas up-and-coming South American adventure destinations.
But some weren’t so convinced that the approach of tapping into such a specific market would work. “It could be tough to sustain a business with such a narrow focus,” says Lori Ranson, a senior analyst at the Sydney-based Centre for Aviation. She points to Air France’s attempt in 2017 to target younger travelers with its now defunct subsidiary, Joon, through things like budget fares, colorful seats, and casual flight-attendant attire. However, Harfst says these are “airline frills” that don’t add value to a traveler’s experience, adding that Eastern wants to provide “hassle-free service” for its passengers.
In February, before the pandemic hit, Harfst told Outside that he anticipated Eastern’s flights would be 50 to 70 percent less expensive than other airlines, citing cost-cutting measures like operating wide-body aircraft that allow for more seating and luggage. (JetBlue does not have wide-body aircraft, though other airlines, like American and United, do.) The company also owns its fleet. (According to a 2018 report by the Centre for Aviation, half of the world’s commercial planes are leased.) Ranson noted that the company’s spending costs would need to be “well below its competitors” in order to meet its proposed fares. But over the course of February and early March, Eastern’s fares were comparable with its competition.
When we contacted Harfst again this month and asked if those cheaper fares would still be possible following the pandemic, Harfst says he didn’t know, though he expects all airline fares to increase after a complete return to travel. While there may be initial deals to attract fliers back, airlines will eventually have to make up for lost revenue. “The costs [of flying] don’t change,” he says. “It’s fair to assume that, regardless of what does happen, fares are going to be more expensive.”
As for the future, Harfst believes that Eastern could come out ahead of other airlines post-pandemic. As a small business, it received support from the CARES Act, but Harfst says its low-cost structure makes the company more resilient. He notes that as a startup company with fewer—and newer—employees, it doesn’t have to cover the higher compensation of tenured members (though he adds that Eastern pays its employees a competitive wage). In addition to lower labor costs and the fact that it owns its own planes, Harfst says the shrinking travel industry will result in more underserved markets, allowing for Eastern to pursue its original business model. “We think that there’ll be domestic opportunities that will be open to us, as routes and markets are either abandoned or left with less capacity,” he says, citing the airline’s recent application for a domestic nonstop flight from New York to San Diego. “There are still people all around the world who will need to or want to travel that now won’t have that opportunity—or if they do, it’s a two- or three-stop flight. Those small markets are still very attractive to a company like Eastern.”