Many readers will be aware of Donald Trump’s private plane, a Boeing 757-200 known as Trump Force One. It was a familiar sight during Mr Trump’s 2016 presidential campaign. Trump Force One is still around, although the President has become more accustomed to the comforts of Air Force One lately. But back when Mr Trump was a private citizen, he once owned an airline, known as the Trump Shuttle. That airline had a short but eventful life.
A short but interesting life for the Trump Shuttle
The Trump Shuttle operated a fleet of Boeing 727-100s and 727-200s between Boston, New York, and Washington DC. The airline first took to the air in mid-1989. Fourteen months after that first flight, Trump Shuttle defaulted on a $1.1 million debt payment. Within two years of the first flight, there were active negotiations to sell the airline. By mid-1992, the Trump Shuttle had ceased to exist. It was rebranded, bought by US Airways, and subsequently absorbed into American Airlines.
But like so many things associated with the President, the Trump Shuttle wasn’t dull. The airline brought bling to the east coast commuter grind. At the time, Mr Trump had interests in Atlantic City casinos. He wanted his airline to replicate the look and feel of his casinos.
Cue the leather seats, thick carpet, chrome buckles, maple wood veneer, hot meals, free drinks, full-length mirrors, and fake marble basins in the lavatories. It’s nice but arguably overkill for a 60-minute flight. It was rumored US$1 million got spent upgrading the planes when the airframes were only worth about $4 million each. Mr Trump had big ambitions for his airline. It wasn’t going to be some rough and ready commuter service. It was going to be “the best transportation system of any kind in the entire world.”
Shuttle deal gets done over a party at the Trump Plaza Hotel
The Trump Shuttle had its origins at a Trump Plaza Hotel party, as all good airlines do. Mr Trump had a conversation with Eastern Air Lines president Frank Lorenzo at the hotel in 1988. They must have bonded because soon after, Mr Trump bought Eastern Air Lines’ east coast shuttle services for $365 million. In today’s money, that may sound like a bargain. But it was 1988, and it was considered a high price.
But for his money, Mr Trump got 17 aging Boeing 727s, landing rights and access to airport infrastructure in the three cities, and permission to rebrand. Meanwhile, once a deal got reached, Eastern Air Lines filed for Chapter 11 bankruptcy protection. Mr Trump’s offer went before the courts, got the tick of approval, and the Trump Shuttle was good to go.
All this took about a year. The first Trump Shuttle flight was on June 8, 1989, a flight up to Boston. It was 45 minutes late taking off – a little awkward since Mr Trump had publicly bragged about his new airline’s penchant for punctuality.
Overkill for a short commuter flight
In a 2017 article, Conde Nast Traveler talked about flying on the Trump Shuttle.
“In the lounge-like gate areas, you could pick up a free newspaper or snack. In-flight, there were bagel breakfasts in the morning and complimentary cocktails with boxed meals later in the day.
“The service was classy, yes, but it was sort of like having the 21 Club cater a Greyhound bus trip.
“On a trip from D.C. to New York, I was barely into my chicken Caesar salad and chardonnay when the “prepare for landing” call came from the cockpit. The not-so-glamorous reality is that it was a 45-minute flight, and about 20 of those minutes were spent getting up and down from cruising altitude.”
In this era, Eastern Air Lines (or the Trump Shuttle) and Pan Am were the big players in the east coast commuter corridors. Before Mr Trump brought Atlantic City casino bling to the skies, these shuttle services were fairly prosaic affairs. But they did make money, even if Eastern Air Lines and Pan Am were losing money hand over fist elsewhere.
Trump’s disdain for Pan Am backfires
Who had what size market share depends on who you ask. But most pundits reckon Pan Am had around 60% and Trump Shuttle around 40%. That wasn’t bad for a new airline, notwithstanding the saturation marketing Mr Trump threw at an unwary traveling public.
“I love competing against Pan Am. I mean, if you’ve got to compete, Pan Am is the one you want to compete against,” Mr Trump said at the time.
As for Pan Am, Mr Trump wasn’t impressed by them. Shortly after Trump Shuttle’s first flight, he publicly and controversially criticized Pan Am’s safety and maintenance record. That criticism came back to bite Donald Trump. In August 1989, a Trump Shuttle landing in Boston had a nose gear failure. An investigation later attributed the fault to maintenance errors by Eastern Air Lines.
But Donald Trump wasn’t fazed by that. He called the landing “perfect,” noting no-one was injured. To give the man due credit, he was on the next Trump Shuttle flight to Boston.
“It was the most beautiful landing you’ve ever seen,” Trump said. “It went all the way down the runway. By the time it landed at the end, the front just touched very softly. Everybody got off. Nobody was injured. They were shaken up. But they were fine,” Mr Trump said.
Despite the hoopla, Mr Trump’s lack of airline experience soon made its mark. The airline was overcapitalized and hemorrhaging money. By the end of 1990, the Trump Shuttle had lost $128 million, and employees were getting laid off.
It was trying to create an image that wasn’t. It was forcing things.” an industry insider told The Boston Globe.
“He missed the boat. We wanted convenience, not opulence.”
Busted out within three years and Trump bails from the business
Within a year of the launch, the Trump Shuttle was in strife. The terminal concierge service vanished, as did the free terminal coffee. Then there was that September 1990 default. Although Mr Trump did have some skin in the game, he also had considerable leverage over creditors. Most couldn’t afford the airline to fail.
In late 1991, Donald Trump ceded control of the Trump Shuttle. He was on the hook for $245 million in loans, including $135 million he had personally guaranteed. As part of the deal, the $245 million problem disappeared, and Mr Trump’s personal liability fell to about $35 million.
Control of the Trump Shuttle went to US Airways after negotiations with Northwest Airlines fell through. US Airways did a deal to take control of Trump Shuttle for ten years with an option to buy after five years. They did in 1997, paying the bankers $285 million. In the meantime, US Airways stripped out the remaining bling and the Trump name and logos. US Airways continued to operate the east coast shuttle services, albeit under a different guise.
As for the now President, he maintains the whole Trump Shuttle experience was a sweet deal for him.
“It worked out well for me,” said the resolutely upbeat Mr Trump years down the track.
“I ran an airline for a couple of years and made a couple of bucks. The airline business is a tough business, but I did great with it.”
Meanwhile, Mr Trump still has Trump Force One to keep him busy.
