Donald Trump’s Failed Airline Venture Cost $365m

There are many things that Donald Trump will go down in the history books for. Some may be great, but many probably don’t reflect so positively on his character. One of the latter types of things for which he is not so well remembered is the time he launched his own airline.

The Trump Shuttle
Ego-massaging branding on the Trump Shuttle, with a big T on the tail and Trump down the side

The day the Trump Shuttle launched, it promised a better passenger experience. Despite flights only being, on average, around an hour in duration, travelers could enjoy multiple services of champagne and a time of day appropriate meal of the finest quality.

What actually emerged was an airline which didn’t care about what passengers wanted. It was an airline concerned with image over practicality, and of massaging the ego of its CEO. This is the story of the Trump Shuttle.

trump pointing
He wants YOU to fly his airline

The Trump Shuttle

The concept was for something akin to his glitzy casino and the brand image of his hotel; lots of gold, marble and shiny things. But, in his wisdom, Trump forgot that the thing also had to fly too. Turns out marble sinks are too heavy to be put in aircraft… who knew?

Although he backed down on that particular furniture, other amenities he was not going to give up. The thick burgundy carpet he specified made it almost impossible for flight attendants to move their carts. Rather than install a practical floor covering, Trump apparently told them to ‘push harder’.

Trump shuttle
The Trump Shuttle used Boeing 727 tri-jets

Despite market research telling him that what his target audience wanted was an on-time flight and consistent schedule, Trump spent a great deal of time adding his unique touch to the interior of the plane. Gold plated everything, leather seats, chrome buckles… and all for flights that typically took less than an hour.

Former president of Trump Shuttle, Bruce R Nobles, said to the Boston Globe,

“My argument at the time, which fell on deaf ears, was no one was going to fly on our planes because they looked better. He disagreed because his modus operandi was to make things look flashier than anyone else,”

All in all, Trumps upgrades cost around $1m per aircraft, being fitted to aging airframes worth no more than $4m a piece. The whole project is estimated to have cost $65m more than it needed to, but, as we know, Trumps not one to back down from something he sees as a great idea.

Making Trump Shuttle happen

In order to finance this outlandish aviation project, Trump arranged for a loan of $380m from a consortium of 22 small banks to finance the transaction. With this, he bought a relatively profitable division of Eastern Airlines, who were at the time in financial strife themselves. Taking on operations in the North-eastern US, the airline was set to launch with a hub at LaGuardia.

Service began on 23rd June 1989, with scheduled flights between LaGuardia in New York and Logan Airport in Boston. They also launched routes to Washington National Airport (now Ronald Regan Airport) and Orlando.

At the launch of Trump Shuttle, once the string quartet had laid down it’s bows, Trump took to the mic stand to introduce his airline. But, instead of reeling off the benefits of travelling with Trump, he took the opportunity to rally against Pan Am, his nearest rival in the shuttle business.

Pan Am
Pan Am were Trump’s nearest rivals in the shuttle business

He slammed their safety record, saying the company was strapped for cash and could not afford to maintain their aircraft. “I’m not criticizing Pan Am,” Trump said that day. “I’m just speaking facts.”

When the executives had finished picking their jaws up off the floor, they brought Trump back down to earth with a bump. Henry Harteveldt, the company’s marketing director at the time, recalled,

“We said, ‘Donald, don’t ever do that again. It was wrong. We had no proof to back that up. And there’s an unwritten rule in the airline business that you don’t attack someone else’s safety record.”

When Trump Shuttle crashed and almost burned

Trump’s unfounded remarks almost instantly came back to bite him, as his own airline experienced its own near tragedy just three months after launch. A Boeing 727’s nose gear failed, causing it to crash land at Logan Airport.

After several attempts to shake the landing gear loose and enough circling of the airport to burn off most of its fuel, the pilot of the plane began his approach. Landing on the rear wheels, he slowed the plane down as much as possible before finally lowering the nose onto the tarmac.

The aircraft came to a screeching halt, a white paint trail following in its wake, sliding and grinding to a final stop. Thankfully all passengers disembarked safely. As usual, Trump managed to put a positive spin on what could have been an enormous disaster.

“It was the most beautiful landing you’ve ever seen. 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.” – Donald Trump, on his Boeing 727 crash landing in Boston, 1989

It was to be the beginning of the end of Trump Shuttle. Fuel price spiked as a result of the first Gulf War, and Trump’s inability to understand his customer’s needs led to the eventual demise of the airline. Saddled with such an immense amount of debt, it simply couldn’t thrive in such a tricky economic climate.

Trump shuttle
The Trump shuttle never did make a profit

Operation officially ceased in April of 1992, when the banks decided enough was enough and contracted US Air to run the operation. Now it’s known as the American Airlines shuttle, and serves New York, Boston, Washington and Chicago. And there’s not a burgundy carpet or a marble sink to be seen.

‘I did great with it’

All that remains of Mr. President’s foray into aviation seems to be his own private aircraft. A modified Boeing 757, equipped with 43 seats, is on hand at all times to ferry him around. It’s suitable bedecked to transport him ‘Trump-style’; we’ll leave the specifics of that oxymoron to your imagination. That’s when he’s not using Air Force One, of course.

But Trump, as always, has a positive spin on the outcome.

“It worked out well for me. 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.”

In just 18 short months, the airline had lost over $125m. Personally, Mr. Trump had injected $20m of his own cash at start-up, and had guaranteed the loan for $135m, which the banks wanted back. He got away with the $250m which was owing, as that became the responsibility of the buyer, but personally he lost out at least $120m due to the failure of his airline.

Trump thumbs up
Trump: ‘I did good’