Strike at Eastern Puts Texas Air in Red

NEW YORK — Texas Air Corp. on Monday reported a large second-quarter loss due mainly to the strike at Eastern Airlines, which has severely cut the carrier’s operations.

Houston-based Texas Air also owns Continental Airlines, which reported a small profit in the quarter, reversing a loss from the year-ago period.

But the improved performance at Continental, and a one-time $250-million gain from the sale of Eastern’s Northeast Shuttle, were not enough to offset the large operating losses at Miami-based Eastern.

Texas Air said it had a net loss of $109.3 million, or $2.88 a share, in the quarter ended June 30, compared to a loss of $255.9 million, or $6.67 a share, a year ago.

Revenue fell 34% to $1.40 billion.

A sharp drop in sales hit Eastern after its machinists went on strike on March 4. When pilots and flight attendants honored picket lines, Eastern was forced to cancel most flights and five days later it sought protection from creditors under federal bankruptcy law.

Eastern reported a net loss of $129.3 million, compared to a loss of $89.8 million in the 1988 period. But results in the current period include a $250-million gain from the sale of the shuttle to developer Donald J. Trump.

Analysts said Continental’s performance was encouraging. The airline suffered large losses in 1987 and 1988 because of problems from integrating People Express and other airlines that Texas Air bought in 1986.

Continental had a net profit of $32.1 million for the quarter, contrasted with a loss of $150.9 million a year ago. Last year’s results included a one-time charge of $131 million for accounting adjustments related to ticket sales. Revenue grew 18% to $1.3 billion.