All-freight airline begins 'new Eastern' proposed


CHICAGO -- An all-freight airline began operating at Chicago's O'Hare International Airport yesterday in the newest attempt to develop a niche in a business dominated by giant competitors.

Flagship Express Services Inc. will use its three cargo planes to supply airport-to-airport transportation for wholesalers and freight forwarders who do not need the door-to-door service available from such industry giants as Federal Express.

Separately, Airline Acquisition Corp., financed partly by seed money from former Eastern Airlines pilots, said that it hoped to begin operating a new passenger airline with a hub and headquarters in Atlanta, reviving Eastern's name and routes.

Both ventures could face tough going as they compete with well-financed and efficiently run rivals, an airline analyst said.

"Federal Express is in a position to offer the same service" as Flagship, said Thomas Trantum, an analyst for J. C. Bradford & Co., a regional investment banking firm based in Nashville, Tenn.

The Eastern pilots, on the other hand, would face the formidable competition of Delta Air Lines Inc., the dominant carrier at the Atlanta hub and "one of the best-run, most cost-efficient airlines" in the industry, Mr. Trantum said.

Flagship's venture is an extension of the former Rosenbalm Aviation, based in Ypsilanti, Mich.

That company will continue to operate and maintain aircraft for other companies as it has done since 1956. The company was bought by Westronix Inc. in 1989, and its name was changed to Flagship Express Inc. in 1989. The company had revenues of $60 million in 1990.

Flagship has leased three DC-8-71 cargo jets to provide nightly scheduled reserved service for containers and pallets in the United States. The airline will serve the New York, Los Angeles, ++ San Francisco Bay and Chicago metropolitan markets from its Chicago hub.

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