President Trump is known for having had some very crazy business ideas in the past. One of these crazy businesses, was Trump Shuttle, Inc. operating as Trump Air.
As with many of Trump’s other non-real estate businesses, Trump Air was a complete failure. Although many had forgotten the airline, it was brought into the public light with Trump’s run for presidency in 2016!
Pre-Trump
The 1980’s saw the rise of air shuttle services, a short-haul air service between two major airports for a major airline. The late 1980’s saw two major air shuttles- Pan Am Shuttle and Eastern Air Shuttle.
By the late 1980’s, Eastern began to have financial issues, which culminated in a strike of Eastern’s pilots and crew. This strike exacerbated Eastern’s financial issues, and without a bailout, Eastern would collapse.
Eastern president Frank Lorenzo knew that Donald Trump wanted to get into the airline business. As such, he began to negotiate the sale of a component of Eastern Air Lines- the air shuttle.
After much negotiating, Donald Trump and Frank Lorenzo came to an agreement. Lorenzo would sell The Trump Organization, Eastern Air Shuttle, for $365 million. Which is quite reasonable for an airline with the market share it had.
For that price, Trump would get the entire fleet of 17 727s, landing slots in three major eastern US airports. Not to mention most of the former Easter Air Shuttle employees and crew.
What resulted was that Donald Trump, with the backing of The Trump Organization, began to gather the necessary funds from a series of banks, mainly Citigroup.
Formation of Trump Air
Before becoming Trump Shuttle, Eastern Air Shuttle had been a low cost airline, operating a “no-frills” operation. However, once Trump Air was formed, it became a “luxury” airline rather than its previous “no-frills”.
After reaching an agreement in October 1988, Eastern Air Lines filed for bankruptcy protection. By May 1989, Trump’s bid for Eastern Air Shuttle was approved by bankruptcy regulators and courts.
In June 1989, Trump Shuttle was officially launched and by the end of August the same year, Trump Air had between 40 and 50% market share. The entire fleet got a $1 million per aircraft makeover.
The fleet got gold belt buckles, a new livery, a new interior design, gold lavatory fixtures and maple wood veneers. Trump also made sure his airline had the best organization skills possible, implementing new kiosks at their hubs.
Trump wanted to make the fact that Trump Air was a luxury airline go beyond just “luxury”. The in-flight meals consisted of steak and lobster among other things, as well as champagne and whisky as beverages.
Donald Trump also insisted on having the best management in the airline industry. As such, when Bruce Nobles (former Pan Am Shuttle President) left Pan Am Shuttle, Trump offered him a job as President of Trump Shuttle.
Trump Air Helicopter
Soon after Trump bought his fleet of 727s, he bought a fleet of Sikorsky S-61 and Chinook helicopters. These helicopters were purchased from Resorts International Airlines, the helicopter division of Atlantic City’s Resorts Casino Hotel.
Donald Trump had the S-61 and Chinooks repainted from the green and orange livery to the red and black livery of the Trump Organization’s 757. However, these helicopters were emblazoned with the Trump Air logo.
Trump actually marketed his helicopter shuttle division on the fact that the S-61 was the same model used by the USAF as Marine One. (The S-61 is a variant of the Sikorsky SH-3, which is used as Marine One).
In 1989, Trump’s helicopter service operated a regularly scheduled flight between LaGuardia’s heliport and Wall Street Heliport, transporting people from Wall Street to Trump Shuttle flights out of LaGuardia.
By late 1989, Trump was operating scheduled helicopter flights between LaGuardia’s heliport and East Hampton Airport’s heliport. This route in particular, was ceased in 1992 when Trump sold his airline.
Late 1989 also saw Trump’s helicopter service operating scheduled helicopter flights between West 30th Street Heliport and Steeplechase Pier Heliport serving the Trump Organization’s casino holdings.
The $365 Million Problem
Throughout the entire three year history of Trump Shuttle, it was never profitable. In fact, it lost Trump an estimated $365 million, making it one of Trump’s worst business decisions.
As with most airline startups, Trump Shuttle was unprofitable at the beginning. Within 18 months of being operational, Trump Shuttle had lost $128 million, which is more than most other airline startups.
But this wasn’t entirely down to the airline being a startup, it was also down to competition. Trump competed with Pan Am Shuttle- the shuttle company for Pan Am. And as much as it pains Donald Trump to admit it, Pan Am was more competitive.
Pan Am offered more flights with more destinations than Donald Trump ever could. Pan Am also offered a more “luxurious” flight at a more affordable price than Trump could ever offer, even with Trump’s money behind him.
In 1990, Saddam Hussein invaded the oil-rich country of Kuwait, setting off the 1990 Oil Crisis. The oil crisis made the price of oil skyrocket, which led to an increase in ticket prices.
The result was that no one flying, especially not business travelers. This affected every airline, from Delta and United to obscure airlines no has heard of, including Donald Trump’s airline.
The Sale
The 1990’s were a tough time for The Trump Organization. The recession that resulted from the 1990 Oil Crisis hit real estate especially hard, and Trump was in almost $9 billion worth of debt.
Trump wanted to save his core real estate business- the business he and his father had worked to build. So, along with much of Trump’s non-real estate related businesses, Trump Shuttle was put up for sale.
Citibank, who Trump owed most of the money to (for Trump Air and other ventures), began negotiating with several airlines to take over Trump Shuttle. Originally, Citibank agreed a deal with Northwest in April 1991.
Following Delta’s acquisition of Pan Am Shuttle after Pan Am’s demise, Northwest really wanted to acquire Trump Shuttle. However it fell through because of a union dispute that didn’t resolve easily.
By December 1991, Citibank and US Airways had reached an agreement to operate Trump Shuttle for 10 years with the option to buy it after five years of operating it.
For Trump, this sounded like a good deal, as it would wipe between $100-110 million from what he owed to Citibank, leaving him only owing $35 million for Trump Shuttle. By April 1992, Trump Air officially became USAir Shuttle.
How Safe Was Trump Shuttle?
Trump was bravado about how good his airline was. He often held press conferences talking about how good the maintenance of his airline was and how luxurious it was, and how soon it would be bigger than Pan Am in a few years.
He was so confident of his airline that Trump broke a sacred rule of the airline business- don’t attack another airline’s maintenance quality. However, Trump did it anyway.
In 1989, Trump began to allude that because of Pan Am’s financial insecurities, maintenance of their aircraft would be lower quality. The industry and the media as a whole hit back, crucifying Trump and his airline in the wake of it.
August of that year made Trump look rather hypocritical. Poor maintenance on one of the 727s led to a high-profile crash. Thankfully, the crash resulted in only a few injuries and no fatalities.
Trump Shuttle used a fleet of Boeing 727s, an airliner known for being a fairly dangerous aircraft in terms of crashes, but fairly safe in terms of fatalities. The fleet of helicopters are also some of the safest helicopters you could fly on.
Despite operating a somewhat dangerous aircraft and having a fairly high-profile crash, Trump Air was a fairly safe airline. In its short three year history, there was only one crash with no fatalities.
What Was it Like to Fly on Trump Air?
I personally never flew on Trump Air- it was sold before I was born. However, I managed to talk to a few people who did fly on the airline at its height, and one just before its fall.
A close friend of mine flew on Trump Air when it was a business traveler-oriented “no-frills” airline. He also flew on the airline when it was a luxury airline catering to business travelers.
When he flew on the airline as a “no-frills” airline, he said:
The airline was very similar to Southwest or Ryanair on the surface of things. However, unlike Southwest or Ryanair, it was “trumped” up- made to be quite fancy even when it wasn’t really.
When he flew on the airline as a “luxury” airline, he said:
It didn’t truly lived up to the name “Trump” emblazoned on the side of the aircraft. When you think of a Trump building inside of a 727, traveling at 39,000 ft, you don’t think of the inside of a Trump Shuttle 727.
However, he did also add that the airline wasn’t particularly great in any aspect. It wasn’t great in terms of its price- often being more expensive than other airlines, and it wan’t great in terms of quality- often being worse than its competitors.
Legacy
Trump Shuttle impacted both Donald Trump and the airline industry in several different ways.
Donald Trump
When Donald Trump sold his airline, he sold all of the jets the airline owned. USAir Shuttle began operating the former Trump 727s until retiring them between 1999 and 2001.
In 1997, Donald Trump purchased one of these retired USAir (and former Trump Shuttle) 727s for use as The Trump Organization’s private jet. He reconfigured the 727 to have everything that he’d need, including a shower and conference room.
However, in 2009, The Trump Organization bought a 757 from Paul Allen, known as one of the most expensive private jets ever. The livery that Trump used on his 727 was adapted for use on his 757.
Airline Industry
Donald Trump sold his airline to USAir, which resulted in them obtaining all of the former Trump 727s. These stayed in service with USAir until 1999 and 2001, many have since been scrapped or stored.
When Trump sold all of his stake in his airline to USAir Shuttle, USAir didn’t just get the Trump 727s, but also their routes. Despite only operating to three cities, they were three cities that USAir Shuttle didn’t operate to.
However, the best part about Trump Air’s legacy is that it still technically exists.
Originally, it merged with USAir redesignated as USAir name. When US Airways (USAir Shuttle parent company) merged with American Airlines, it officially became American Airlines Shuttle. It still operates to this day!
Did you ever fly on Trump Shuttle? What were your thoughts on it? Tell me in the comments!
Featured image courtesy of Aero Icarus via Flickr.