Eastern Air Lines Group has filed an application with the US Department of Transportation (DOT) as it works to gain approval to re-launch the iconic airline brand.
The carrier is seeking approval to start both domestic and international flights as a part 121 charter carrier in late 2014, a regulatory filing shows.
At the airline's helm will be Edward Wegel, founder of Atlantic Coast Airlines and former president of Chautauqua Airlines.
While the firm is not affiliated with the Eastern Air Lines that operated from 1928 to 1991, it intends to re-launch the Eastern Air Lines brand via a new passenger carrier with Airbus A320 aircraft, it says in a media release. The airline would be based at the former carrier’s Miami International Airport headquarters.
"We are honored to have the opportunity to launch an airline bearing the iconic Eastern Air Lines name," said Eastern Air Lines’ president and chief executive Edward Wegel. "We have recruited a world class board of directors and a highly experienced management team to guide and lead this effort."
The carrier's website, easternairlines.aero, says it will take delivery of an Airbus A319 aircraft. However, the regulatory filing states that the carrier would start operations with a single leased Airbus A320 aircraft "as early as summer" of 2014. In its cost assumptions, the airline estimates that the 170-seat A320 would be leased at a rate of $175,000 per month.
Eastern says it will "utilise the aircraft for public and private charterers in domestic and foreign markets."
The airline plans to increase the fleet to three by the end of its full first year of operations by adding two more aircraft by December 2014 and July 2015. The carrier would maintain the aircraft through third-party providers.
The carrier expects to incur $7.54 million in start-up costs in 2014 and $19 million in operating expenses for its first full year of service, says the filing. It estimates it will need $12 million to meet the DOT's financial requirements and finish certification, which would be provided through the private placement. Net profit and revenue information was redacted from the document.
The airline will use a private stock placement to raise at least $9 million or a maximum of $14 million to support the airline's certification and entry into service, the regulatory filing states. This plan would include another $1.4 for an over-allotment option. Assuming the $14 million is raised, private investors would hold just under 40% of the carrier's common stock, while another 40% would be held by founding investors consisting of 1848 Capital Partners, Aviation Capital Partners Group, Wegel and AEA Investors Asia chairman William Owens, a retired admiral and vice chairman of the joint chiefs of staff. Investment bankers would hold 20% in stock, options or warrants.