February 19, 2021 BY EMAIL Ms. Lauralyn J. Remo Chief, Air Carrier Fitness Division Office of Aviation Analysis U.S. Department of Transportation 1200 New Jersey Ave. S.E. Washington, D.C. 20590 Re: Eastern Airlines Fleet Expansion Request Dear Ms. Remo: Based on approvals of the Fitness Division, Eastern Airlines currently operates 10 aircraft, 1 six of which can be used for scheduled service. Eastern now respectfully requests approval to increase its total fleet to 18 aircraft and to use eight aircraft for scheduled operations. Over the last year Eastern has continued to demonstrate the high capability of its employees and their commitment to excellence. While initiation of the planned expansion of Eastern’s scheduled service has been slowed by the pandemic, the airline continues to move forward with full support of the FAA. Specifically, Eastern has purchased two B777-200ER aircraft and intends to enter these two aircraft into commercial service during the second quarter of 2021 once certification is approved by the FAA. In addition, Eastern will be leasing two B777-200 freighters to operate Aircraft, Crew, Maintenance, and Insurance (ACMI) charters. Eastern expects the certification process for the B 777s to be completed on or before April 1, 2021. Importantly, Eastern has met all the requirements of the Air Mobility Command (AMC) and been approved by the Commercial Airlift Review Board (CARB). Based on this approval, Eastern has been awarded a contract for passengers from the U.S. Department of Defense to support of the Civil Reserve Air Fleet (CRAF)(HTC711-20-D-CC02). International Charter Airlift Services The expected increase in the demand for Eastern’s services under the DOD contract, the ability to charter the B777 freighters on an ACMI contract and the addition of new scheduled service routes described below will require the 18 aircraft Eastern is requesting. Given the pandemic, it is especially important that Eastern be right-sized to operate at peak efficiency, which is not possible with the current fleet restrictions. Currently, both flight crews and maintenance 1 Although Eastern has an excellent safety and operational record, the Department has not authorized an increase in its total fleet size since 2015.
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February 19, 2021
BY EMAIL
Ms. Lauralyn J. Remo
Chief, Air Carrier Fitness Division
Office of Aviation Analysis
U.S. Department of Transportation
1200 New Jersey Ave. S.E.
Washington, D.C. 20590
Re: Eastern Airlines Fleet Expansion Request
Dear Ms. Remo:
Based on approvals of the Fitness Division, Eastern Airlines currently operates 10
aircraft,1 six of which can be used for scheduled service. Eastern now respectfully requests
approval to increase its total fleet to 18 aircraft and to use eight aircraft for scheduled operations.
Over the last year Eastern has continued to demonstrate the high capability of its employees and
their commitment to excellence. While initiation of the planned expansion of Eastern’s
scheduled service has been slowed by the pandemic, the airline continues to move forward with
full support of the FAA.
Specifically, Eastern has purchased two B777-200ER aircraft and intends to enter these
two aircraft into commercial service during the second quarter of 2021 once certification is
approved by the FAA. In addition, Eastern will be leasing two B777-200 freighters to operate
Aircraft, Crew, Maintenance, and Insurance (ACMI) charters. Eastern expects the certification
process for the B 777s to be completed on or before April 1, 2021. Importantly, Eastern has met
all the requirements of the Air Mobility Command (AMC) and been approved by the Commercial
Airlift Review Board (CARB). Based on this approval, Eastern has been awarded a contract for
passengers from the U.S. Department of Defense to support of the Civil Reserve Air Fleet
(CRAF)(HTC711-20-D-CC02). International Charter Airlift Services
The expected increase in the demand for Eastern’s services under the DOD contract, the
ability to charter the B777 freighters on an ACMI contract and the addition of new scheduled
service routes described below will require the 18 aircraft Eastern is requesting. Given the
pandemic, it is especially important that Eastern be right-sized to operate at peak efficiency, which
is not possible with the current fleet restrictions. Currently, both flight crews and maintenance
1 Although Eastern has an excellent safety and operational record, the Department has not authorized an increase in
its total fleet size since 2015.
Eastern Airlines, LLC
Page 2 of 4
personnel are underutilized. For example, Eastern can operate all the new scheduled service
referenced below without adding any flight crew, maintenance personnel or infrastructure.
Throughout 2020, via extensive coordination with the Department of State, OST,
government and aviation authorities of Canada and Latin American countries, and diplomatic
offices on U.S. and foreign soil, Eastern provided close to 200 repatriation flights to many
countries, including, e.g. Argentina, Canada, Chile, El Salvador, Ecuador, Guyana, Haiti,
Honduras and Peru. Eastern successfully repatriated over 40,000 individuals including young
exchange students, passengers with special needs at no cost to the U.S. or foreign
governments. Former Secretary Pompeo on many occasions highlighted the success of the
repatriation effort by U.S. carriers and, importantly, a Former Assistant Secretary of State and
many other government officials specifically thanked Eastern for its outstanding work in
repatriating citizens.
Now, Eastern must respond to both the continuing difficult economic conditions and
rapidly evolving health and safety requirements imposed by the Centers for Disease Control (CDC)
and peer agencies abroad. Eastern only operates international flights, so the CDC’s requirement
for testing of international passengers arriving in the U.S. raised a substantial challenge and
additional requirements would require Eastern to adapt further. Eastern is the only U.S. low-fare
carrier that operates wide-bodied aircraft, which, as seen during the repatriation effort last year,
enables Eastern to provide important public interest benefits through international service to
destinations beyond the range of other US low fare airlines. The requested additional aircraft will
allow Eastern to successfully serve the public during this ongoing pandemic.
In support of this request, Eastern provides the following information:
Current Financial Position:
A current balance sheet and a current income statement both ending December 30, 2020, is
attached as Exhibit A. As of December 31, 2020, Eastern Airlines had Current Assets of
$27.0 million and Current Liabilities of $18.5 million resulting in a working capital balance
of $8.5m. All financial information in this submission was prepared by Dragan Djordjevic,
Eastern’s Chief Financial Officer.2
Summary of Eastern’s current operations and operating plans for the next 12 months:
The baseline scheduled service routes include:
1. New York, NY (JFK) – Georgetown, Guyana (GEO);
2. New York, NY (JFK) – Anchorage, AK (ANC);
3. Miami, FL (MIA) – Georgetown, Guyana (GEO);
2 Mr. Djordjevic joined Eastern as CFO in October 2020. He is a U.S. citizen, and his resume is attached as Exhibit
D.
Eastern Airlines, LLC
Page 3 of 4
4. Miami, FL– Toronto, CA (YYZ) via GEO);
5. New York, NY (JFK) – Guayaquil, Ecuador (GYE);
6. Miami, FL (MIA) – Guayaquil, Ecuador (GYE);
7. Miami, FL (MIA) – Asuncion, Paraguay (ASU).
The seven incremental schedule routes (pending foreign government approvals as required)
System TotalsDeparturesBlock hoursAvailable seat miles (000s)Passengers carriedRevenue passenger miles (000s)
Key Performance IndicatorsRevenueFleet sizeNumber of scheduled service routes (eop)Revenue per block hour ($)RASM (cents)PRASM (cents)Average fare (scheduled service)Ancillary revenue per passenger
Operating statisticsTotal system statisticsPassengersRevenue passenger miles (RPMs) (thousands)Available seat miles (ASMs)(thousands)Load factorOperating expense per ASM (CASM)(cents)Fuel expense per ASM (cents)Operating CASM, excluding fuel (cents)ASMs per gallon of fuelDeparturesBlock hoursAverage seats per departureTotal miles flownAverage stage length (miles)Average stage length (block hours)Average number of operating aircraft during periodAverage block hours per aircraft per dayFull-time equivalent employees at end of periodFuel gallons consummed (thousands)Average fuel cost per gallon ($)Scheduled service statistics:PassengersRevenue passenger miles (RPMs) (thousands)Available seat miles (ASMs)(thousands)Load factorDeparturesBlock hoursTotal passenger revenue per ASM (TRASM)(cents)Average fare - scheduled serviceAverage fare - air-related productsAverage fare - totalAverage stage length (miles)Fuel gallons consummed (thousands)Fuel expense ($) (thousands)Average fuel cost per gallon ($)
1st
Quarter2nd
Quarter3rd
Quarter4th
Quarter12-month
Total1st
Quarter2nd
Quarter3rd
Quarter4th
Quarter12-month
Total1st
Quarter2nd
Quarter3rd
Quarter4th
Quarter12-month
Total
Combined : Baseline + IncrementalIncremental : Proposed 7 additional scheduled routes + increased DOD CRAF charters + Cargo operationsBaseline : Current charter and 7 scheduled routes
Eastern Airlines LLC
Proforma Income Statement
Market statisticsJFKGEOPassengersPassenger revenue, base fare, net ($)DeparturesBlock hoursNumber of one-way seatsAvailable seat miles (ASMs)(thousands)Revenue passenger miles (RPMs) (thousands)Load factorAverage stage length (miles)Total passenger revenue per ASM (TRASM)(cents)Average fare - scheduled serviceJFKGYEPassengersRevenueDeparturesBlock hoursNumber of one-way seatsAvailable seat miles (ASMs)(thousands)Revenue passenger miles (RPMs) (thousands)Load factorAverage stage length (miles)Total passenger revenue per ASM (TRASM)(cents)Average fare - scheduled serviceMIAGYEPassengersRevenueDeparturesBlock hoursNumber of one-way seatsAvailable seat miles (ASMs)(thousands)Revenue passenger miles (RPMs) (thousands)Load factorAverage stage length (miles)Total passenger revenue per ASM (TRASM)(cents)Average fare - scheduled service
1st
Quarter2nd
Quarter3rd
Quarter4th
Quarter12-month
Total1st
Quarter2nd
Quarter3rd
Quarter4th
Quarter12-month
Total1st
Quarter2nd
Quarter3rd
Quarter4th
Quarter12-month
Total
Combined : Baseline + IncrementalIncremental : Proposed 7 additional scheduled routes + increased DOD CRAF charters + Cargo operationsBaseline : Current charter and 7 scheduled routes
Eastern Airlines, LLC Fleet Expansion Request
EXHIBIT C
Eastern Airlines LLCProposed PeriodBalance sheet
Proposed period Proposed period
Current liabilitiesTrade payables 2,102,477Accrued payroll 525,619Accrued taxes and fees 2,330,671Air traffic liability 8,434,293Current portion of IRS reorganization liability 1,798,042Other short-term liabilities 34,938Other current liabilities 0Total current liabilities 15,226,041
Fixed assets (net of depreciation) Long term liabilitiesOffice equipment Long-term portion of IRS reorganization liability 306,716Software Long-term portion of note payable - aircraft 54,091,755Vehicles and ground equipment Long-term portion of note payable - other 0Furniture, fixtures and equipment Total liabilities 69,624,512Airports, stations and leasehold improvementsAircraft Members' equityCapitalized maintenance checks Members' equity 129,085,987Aircraft improvements Cumuilative members' drawings 789,456Tooling and other equipment Retained earnings / (deficit) (63,850,162)Aircraft engines Total members' equity 63,883,603Landing gear Total liabilities and members' equity 133,508,115Other aircraft componentsCapitalized aircraft certification costsAircraft rotablesLeasehold improvementsPassenger reservation systemOther Capitalized CostGoodwill, intangible assetsTotal assets
YEYE
Eastern Airlines, LLC Fleet Expansion Request
EXHIBIT D
Dragan Z. Djordjevic 16 Eagleview Ln, Schwenksville, PA19473