The History Of Eastern Airlines

Once considered one of the “big four” US carriers, along with American, Delta, and United, Eastern Airlines had been innovative and highly successful, having evolved into the world’s second-largest airline during its six-decade history.

Tracing its origins to Pitcairn Aviation, which had been formed on September 15, 1927, it had inaugurated airmail service the following year between Brunswick, New Jersey, and Atlanta with open-cockpit PA-5 Mailwings.

But North American Aviation, a holding company for several fledgling carriers and aircraft manufacturers, purchased the company a year after that. And changing its name to Eastern Air Transport, inaugurated passenger service with Ford 4-AT Trimotors on the multi-sector hop from Newark to Washington via Camden, Baltimore, Washington, and Richmond on August 18, 1930. Acquisition of the Curtiss Condor enabled it to extend the route to Atlanta.

After absorbing Ludington Air Lines three years later, it was able to incorporate a New York-Philadelphia-Washington triplet to its system.

Eastern Airlines growth, like that of many other carriers, was jumpstarted by the Air Mail Act of 1934, which entailed the awarding of government contracts to private companies to transport the mail. While the US Postal Service selected them based upon the bid they submitted in competition with others.

Although this prompted the formation of upstart companies to operate the airmail routes in the hopes of being chosen, it equally required the separation of the then-common aircraft manufacturer-and-carrier co-ownership.

Circumventing the restriction imposed upon it as a result of its Spoils Conference involvement with General Postmaster Walter Folger Brown. Eastern Air Transport changed its name in 1934 to the one by which it would be known throughout its history, Eastern Air Lines.

Captain Eddie Rickenbacker, World War I flying ace who won the Congressional Medal of Honor, purchased the carrier from the North American Aviation holding for $800.,000 and took over the helm, implementing an aircraft modernization program.

Building its soon-famous Great Silver Fleet, he quickly replaced the slow Curtiss Condor biplanes with all-metal Douglas DC-2s, one of which became the first to land at the new Washington National Airport in 1941. Leaving its imprint on an expanding East Coast network, Eastern plied the New York-Miami sector with wider-cabin, 21-pasenger DC-3s in 1937.

Like many US airlines, whose growth was interrupted by the necessity World War II imposed on it and the requisition of its aircraft for military purposes. Eastern Airlines commenced its own military support flights in 1942, connecting the three states of Florida, Pennsylvania, and Texas, spreading its wings to Trinidad in the Caribbean, and ultimately forming its Miami-based Military Transport Division, for which it acquired Curtiss C-46 Commandos.

The seed to its pioneer, tri-city northeast shuttle was planted two years later when the Civil Aeronautics Board (CAB) awarded it the New York-Boston route over American.

The technological advancements of the 1950s, expressed as range, payload, speed, comfort, and safety increases, occurred so rapidly that, by the time an aircraft was produced, its replacement was already on the drawing board.

The quad-engine DC-4 soon supplemented its 39 twin-engine DC-3s, and its network now encompassed Detroit, St. Louis, and San Juan, Puerto Rico.

The Lockheed L-649 Constellation, inaugurated into service in 1947, yielded to the higher-capacity L-1049 Super Constellation, which plied its signature New York-Miami route as of December 17, 1951. The Martin 4-0-4s replaced the DC-3s and by the middle of the decade, the first DC-7Bs sported Eastern’s livery.

Acquisition of Colonial Airlines gave it access to New York State, New England, Canada, Bermuda, and Mexico City.

The propjet took the form of the four-engine Lockheed L-188 Electra, which was inaugurated into service on January 12, 1959 between New York and Miami, and the pure-jet in the form of the four-engine Douglas DC-8 only a year later, soon supplemented by the smaller-capacity, but higher cruise speed Boeing 720.

Eastern Airlines was the first of the big four US carriers to operate the 727-100 tri-jet “Whisperliner”-specifically on the Philadelphia-Washington-Miami run-and the twin-jet DC-9-10.

The famous hourly New York-Boston-Washington air shuttle was launched on April 30, 1961 with the L-188 Electra, for which it advised, “No need to make a reservation. Just ‘show and go.’ All sections are with backup planes standing by to assure a seat for everybody waiting at scheduled departure time.”

One-way weekday fares were $69.00 to Boston and $42.00 to Washington, while the round-trip weekend prices were $55.00 for adults and $37.00 for children to both.

The shuttle was eventually operated by DC-9-30, 727-200, and A-300 aircraft.

Breaking its hitherto East Coast shackles at the end of the 1960s, it expanded to Seattle and Los Angeles on the West Coast, to Nassau and Freeport in the Bahamas with its acquisition of Mackey Airways, and to several Caribbean islands after purchasing Caribair.

Passing the torch to another famous aerospace personality, Captain Eddie Rickenbacker relinquished control to Colonel Frank Borman, who had orbited the earth in Gemini VII in 1966 and the moon in Apollo VIII two years later.

Eastern entered the widebody era with the Lockheed L-1011-1 TriStar in 1972, became the first US carrier to operate the European Airbus Industrie A-300 in 1978 when it ordered 23, and was the launch customer for the Boeing 757-200.

After acquiring Braniff International’s Latin American routes in 1982 and establishing a hub in San Juan, it became the world’s second-largest carrier in terms of annual passengers after Aeroflot, establishing hubs in New York, Charlotte, Atlanta, Miami, and San Juan and toting its “We have to earn our wings everyday” slogan.

But, while it may have earned its wings, it did not necessarily earn the profits to support their lift. Debt from aircraft purchases needed for its expansion and labor disputes necessitated the $615 million purchase by Texas Air Holdings, which also owned Continental, in 1986, and Eastern became a carcass of fodder. Airplanes were sold. Employees were laid off. Assets were transferred to Continental. And its image rapidly deteriorated, especially when it virtually eliminated in-flight service to reduce costs.

Declaring bankruptcy in 1989 and ceasing operations two years later, on January 19, the one-time “wings of man” became the Icarus of deregulation after a six-decade flight.

FLEXCUBE User Training – I Get Nervous Around Really Smart People

04 January 2001. I took a flight to Eastern Europe (Poland) for the first time. Little did I imagine it is going to be the first of the many trips I would make time and again to Eastern Europe.

I flew from Mumbai to Warsaw via Amsterdam by KLM airlines. I was going to Warsaw to conduct user training for one of the reputed American Multinational bank. I had a brief stop-over in Amsterdam (It became my home afterwards for a long time) and flew in to Warsaw. The flight had reached at about 20:30 hrs. and due to jet lag I felt tired and worn out.

I completed the visa formalities and waited in the queue for taxi. The taxi driver was a women and she welcomed me with a “dzien dobry”. I hardly understood what it meant. Without much effort she took my 20Kgs suit case and shoved it in the boot of the car.

The taxi started wheeling from airport to Warsaw city where my studio apartment was. All I could see outside was white mounds of snow – The entire city was freezing and snowed out. I was seeing snow for the first time in life. There was low energy left in my body to enjoy the fresh snow and before I could realize I had dozed off in the taxi. I woke up when the taxi driver pressed the break hard.

I looked at her and she gave me a smile. I guess I had to understand everything from that smile. It was more than an hour since the taxi left Warsaw airport. I asked her how much time it will take to reach the apartment, for which there was no response. I repeated the question for which the response was a pearly smile.

I was losing patience and in a more stern voice I asked her whether she follows what I am saying. she replied “English small, small”. I understood the uphill task ahead of me. I knew survival was going to be tough in Poland. I had to train bank staff on software which few knew how it worked, including the developers of the software.

My landlord was waiting for me at the apartment and I was happy to get off from the taxi finally.

This American bank had its regional center (CEEMEA) headquarters in Poland. This American bank had acquired a local Polish bank to increase its market share.

The bank had laid out a condition on the profile of the training consultant. The consultant coming for conducting training sessions should have knowledge of legacy system also. The legacy system running in the bank was COSMOS, which was a different avatar of MicroBanker. (MicroBanker was the earlier version of Oracle FLEXCUBE). The legacy system had been running in the bank for 20 odd years. I was ready to start the user training.

I had a cold reception in the bank on my first day. This was in sync with the weather conditions (minus 16 Degrees C) in Warsaw during that time of the year. Later I realized Polish people are cold irrespective of the season of the year. Reason for this it seems is the historical turmoil they had gone through. Evidence of the same is in Krakow and Auschwtiz.

I spent the first few days setting up FLEXCUBE software. Further I was trying to learn a few Polish words for survival and tasting world famous Polish vodkas. (I can confirm Chopin is the best)

Training commenced after 3 days of me reaching Warsaw. CITIL used to follow the standardized “Train the Trainer approach”. I felt this was a good approach to create the first set of knowledgeable users of the system. Core team had representation from various departments (Marketing, Operations, Audit, IT etc.) with a good amount of banking experience.

Further the team had members from various nationalities (Russia, Romania, Bulgaria, Czech etc.) Team size was about 20 approximately. I felt good about the profile of the team. The only reservation I had was participants were from two different banks and had not met before. They were getting to know each other on Day 1 of User Training.

Training started and within a few minutes everyone had a wry smile. There was also small parallel discussions in progress with full of laughter. I realized I did not have the class with me and stopped the training. I wanted to know what was funny so that I could also laugh.

One of the participants with a chuckle asked me what is “spread”? He said system was giving 2 options “One side” and “both sides”. This set me thinking a little bit and I was little bit on the defensive.

I explained to the team that it is was a jargon used in the world of treasury. It was nothing but the margin on the bid and ask amounts. After a few minutes the participant who raised the query said they were all aware of the basic stuff.

He said they had visualized a spread which will give vent to their carnal desires. Their imagination had gone wild. I was wondering whether it had anything to do with the freezing weather. I had a small laugh and moved on with the session.

As session continued one of the participants from Russia made a comment. He said the technology architecture does not convey rigor and robustness. He felt the system was designed without much thought. It was a direct assault on me and the product. I asked him what made him say so.

He said looking at the User interface I visualize the table structure in the Data base and depicted a model. I was in awe as what he said was factual. He could visualize the table structure based on User Interface and system architecture. I had to recover lost ground. I justified the table structures and design logic.

I realized this participant could visualize beyond spread. What he said was logical and making sense to me. He was making every moment of the training session miserable and difficult. Post perestroika in USSR many Rocket scientist took up jobs in banks as Data center operators.

This participant was a Research engineer who had worked on actual rocket science projects. He was playing with our “technology” and was gouging my eye out. I felt exhausted by Day 1 and I was dreading whether I can handle the 3 week training session by myself. It didn’t take much to realize it would not be possible to handle the session by myself. I had sent request for extra resource to my Boss on Day 1. I said need one more resource to handle the training situation.

You know how easy it is to get a resource when you ask for one. My boss was convincing me that I was a super star and he had full faith in me to handle the assignment. I had to be stern with him. The message was loud and clear for my boss – (I guess) cursing me he said he will act on it and come back to me in 24 hours.

Day 2 started with a discussion on another Treasury product. (NDF – Non Deliverable Forwards). Within 20 minutes of the session there was major chaos and argument between the members of the group. Issue was the American Bank had a certain norm of passing accounting entries. The FLEXCUBE system was handling the requirements as required by the American MNC bank.

The participants from the local Polish bank had pointed out certain major accounting flaws. Accounting entries passed by FLEXCUBE was contrary to guidelines specified by the Central Bank. The Polish bank participants were in disagreement with the American MNC Bank. This was a peculiar situation as I had nothing to do with it. The situation was exposing the in adequacy of an M&A transaction. Core system transformation was not thought through at the operational level.

Day 2 went on similar lines like Day 1 with the only difference being the Russians were joined in by the Czechs. The core team was taking out everything from me and the system. Day 2 end of day saw me worn and exhausted at 4:30 PM.

It was time to take feedback from the participants. Summary of the feedback was as follows:

(Participant 1- From Bulgaria): I am not comfortable in English. I don’t follow your Indian English and accent

(Participant 2 – From Romania): Your age is my experience in this bank. You should not be asking me questions and exposing my ignorance. I thought I am sent to attend the program for some rest from my routine activities

(Participant 3 – From Poland): At a superficial level it looks like as follows: I am going home at 7:30 PM these days. Post implementation of this new software it looks like I will be going home at 11:00 PM.

(Participant 4 – From Russia): This system is a junk and we are being conned in to buying this. We need to design a new system and the training sessions are a waste of time.

My head started spinning after reading and assimilating the feedback.

Day 3 – I decided to take things in control and set the rules of the game.

1. Thou will not criticize the software any further as it is a software purchased by them

2. The sales stage i.e. love letter stage is over and marriage has taken place. Now we have to figure out how to run the family rather than criticize the software time and again

3. Disagreements will discussed and a consensus arrived

4. No party will make the other feel small or little

I managed to survive through the week and as a great relief one more resource joined in with me over the weekend. I told him that we will handle the sessions every alternate day. I reasoned out so that we don’t get exhausted by this volatile and super brilliant group.

Day 6 of the training session my colleague handled the session. He was also given a “fair” treatment by the group. I was there to back him up and read the rules of the game agreed on Day 3 to the participants. I think, I referred to the rules of the game at least 4-5 times. The participants started getting friendly with me as time progressed. Stockholm syndrome had set in I guess.

It was time for feedback again on the evening of Day 6:

One of the lady participant was struggling to book a transaction in the system. I took the extra initiative and volunteered to help her. You know after all she was a damsel in distress and I was the hero waiting to save her. – When I sat down next to her and told her I would be showing her how to book a Forex deal, she sighed with relief. “I’m so glad you’re teaching me instead of him.”

Surprised, I said that my colleague was far more experienced than I was.

“Yes,” she said, “but I feel much more comfortable with you. I get nervous around smart people.”

This summarized for me how participants felt about my training though she was subtle. I was happy this was in private and only for my ears.

Training concluded after 3 weeks. It was time for me to transition the project to my colleague and return back to Bangalore, India.

I have forged a lifelong partnership with this wonderful bunch of participants. They had taught me treasury products and technology in the space of 15 days. I also had taught FLEXCUBE software to them. The only parallel I could draw was is US Navy SEAL training. I had been wondering for a long time though who trained whom. I recollect those days when I receive happy New Year emails from these participants.

I was happy and relieved when the lady officer at Poland immigration stamped my passport. She wished me Good Bye in Polish. (“do widzenia”)

If interested in untold secrets of Poland and core banking implementation write to: prakhash@bfsiconsulting.com