The Time Donald Trump Lost $100 Million on a Failed Airline
Donald Trump is a winner. He is so much of a winner, that even when he is losing, he is still winning; THAT is how much of a winner Donald Trump is. All he does is win win win win.
Except for when he bought that airline back in '88.
Reagan was still in office. George Herbert Walker Bush had swept Bob Dole in the Republican primaries and was about to crush Michael Dukakis in the general election. We hadn't yet gone to war in the Persian Gulf. Oil prices were already starting to spike, leading to a recession that would start in a little over a year. And in October of that Year of Our Trump, Anno Donaldi 1988, Donald Trump proudly peacocked at the Plaza Hotel in Midtown Manhattan (which he had also purchased that year and which would later be offloaded in a 1992 bankruptcy filing) that he had acquired Eastern Air Shuttle, a 27-year-old air shuttle company that exclusively served the Eastern Seaboard, with flights between New York, Boston, and DC.
Remaking Eastern Shuttle in his own image
Eastern Shuttle's operation model was brilliant for business travelers, but almost unimaginable in today's post-9/11 world. Though the fleet of planes was nothing special, the promise was that if you showed up for a flight, you were guaranteed a seat. There were no advance tickets and no check-ins. Like a bus or train ticket, all you had to do was show up. There were hourly flights with more seats than passengers, so there was rarely a capacity issue. In the rare instances in which flights were full, they would just bust out another plane to accommodate the overflow. Which sounds like a great concept for customers, but if that is how airlines generally operated in the halcyon TSA-free days before 9/11, it's no wonder they had to be bailed out in 2002.
Trump paid $365 million for a fleet of 17 of the world's oldest Boeing 727s (a Great Deal he claimed to have negotiated down from $400 million), along with Eastern Shuttle's landing facilities, and quickly got to work making the business his own. He glitzed up the jets' interiors in his own uniquely ersatz way, spending $1 million on each jet to add maple-wood veneer paneling, beige leather seats, and faux-marble sinks with gold-toned fixtures in the bathrooms. Free standard dinner service for a 45-minute flight included sliced chateaubriand and several rounds of drinks. He renamed the airline -- what else -- Trump Shuttle, and put his name brand all over the planes. Even the flight attendants wore Trump-branded belt buckles (along with fake pearl necklaces that an airline spokesperson claimed were real), and the cover of the inflight magazine was designed to resemble the cover of his book, The Art of the Deal.
"The attention to detail was incredible," a former Trump Shuttle executive told The Daily Beast in a fabulous in-depth piece by Barbara Peterson.
How Trump Shuttle crashed
But here's the thing about airline profitability that most people probably don't know even today and Donald Trump definitely did not know (or care) about back then: it's all about weight. The millions Trump spent on cosmetic and service changes made the planes significantly heavier (like the 5lb brass handles he put on the emergency doors), exacerbating fuel costs in what was already an older, gas-guzzling fleet -- and at a time when oil prices were skyrocketing.
As former Trump Shuttle president Bruce Nobles told The Daily Beast, "He really didn't understand the business and at times he said things that really weren't helpful" to his new company. "I cringed every time he opened his mouth."
In the same Daily Beast story, Nick Santangelo, who ran maintenance and engineering at the Shuttle, was quoted saying, "... you'd kill to save 1lb (of weight on each plane), and they wanted to add 20 to 30lbs."
The airline also extended its air of luxury outside of the jets themselves, revamping departure lounges and offering private airport concierges for luxury services like upscale restaurant reservations. If it all sounds terribly ostentatious and indulgent, well... it was the '80s. Spoiler alert: the New Coke-addled opulence of the '80s came to a screeching halt as gas prices continued to rise, G.H.W. Bush took office, and the country slid into a recession.
And though Trump's newly decadent Shuttle took on the aesthetics of his growing collection of hotels, customers weren't drawn to the airline enough for it to ever turn a profit during its spectacularly poorly timed life span, particularly as business travel -- the bread and butter of the Shuttle's business -- also slowed during the recession.
Not even two full years later, in September 1990, Trump defaulted on his loan and control of the airline went back to the consortium of 22 banks, led by Citibank, that had collectively financed it. Citibank put the still-valuable airline up for sale, US Air bought it, and in 1992, Trump Shuttle -- and Donald Trump's Howard Hughesian aspirations of being an aviation tycoon -- was no more.
All told, Trump lost at least $100 million of his own money on Trump Shuttle, which he had personally guaranteed against the $365 million debt (the other $265 million he claimed he was not responsible for).
But because The Donald does not lose, he later said of his pet airline project, "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."
So, really, the question is: is it really a lie if the person who says it truly believes it? Is Donald Trump simply operating on a level the rest of us cannot even fathom? Is the emperor actually wearing invisible clothes?
Trump's days as an airline mogul may have been short-lived and are long since over, but he does still have his private Boeing 757-200 with 24-karat-gold-plated bathroom fixtures (none of this gold-toned nonsense!), and we can still call it Hair Force One, and that, friends, is a truly precious gift for which we should all be grateful.
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Nicole Rupersburg wishes she could travel back in time to the pre-TSA days of airline travel and, in this Whovian fantasy, would 100% fly the Trump Shuttle just to see the bathrooms. Find her flying decidedly less fauxurious accommodations on IG: @eatsdrinksandleaves.