Barbara Peterson has an outstanding article on Donald Trump and the Trump Shuttle.
The Eastern Airlines Shuttle concept began with no advance tickets and no check-in even. If you showed up for a flight, you were promised a seat. There was hourly service, more seats than passengers, so this usually wasn’t a problem.
Occasionally though the flights were oversubscribed and the airline made a big show of pulling out another plane for just that one last passenger (or – on the Sunday after Thanksgiving the first year of service – for more than one additional planeload of passengers for the last flight of the night).
The Eastern Shuttle, which began in 1961, was sold and became the Trump Shuttle in 1989.
Trump had paid $365 million for the assets of the Eastern shuttle operation and its 17 planes, which he’d spun as a great deal—negotiated down from the $400 million asking price. But later, as the closing was delayed by Eastern’s bankruptcy and other bidders emerged, Trump tried to get Eastern chief Frank Lorenzo to lower the price, since the value of the asset had indeed diminished. Instead Trump ended up taking five additional planes as compensation, which he described as a victory in his book The Art of Survival, published in 1990, when the airline was still flying. “This allowed me to refurbish my fleet without taking any planes out of service,” he said.
True, but the shuttle needed only 16 planes to operate a full hourly schedule at its three cities, with one or two jets as spares, and extra aircraft are anathema to an airline—they don’t make money sitting on the ground.
Here’s Donald Trump on with David Letterman just after the acquisition:
Trump spent $1 million a plane on refurbishments including:
..thick maroon carpeting, maple-veneer paneling, beige leather seats, and even faux marble sinks and gold-colored fixtures in the lavatories.
“The bathroom was a work of art,” joked Nick Santangelo, who ran maintenance and engineering at the shuttle. “They used ideas from the hotel business, which wasn’t bad, but they didn’t always work.” Older jets in particular guzzle fuel and airline executives are obsessed with saving even a few ounces of weight. Not so Trump: “At first they wanted to put in a ceramic sink, that was too heavy,” said Santangelo. “Then one of his henchman decided they were going to put brass handles on the doors you use to get out in an emergency. Normal handles weigh a few ounces, and these things probably weighed five pounds each… you’d kill to save one pound, and they wanted to add 20 to 30 pounds to each plane.”
Still, the airline lured customers with frills like airport concierges who would book same-day reservations at fancy restaurants; gourmet food and drink and tarted-up departure lounges. “We spent a lot on service,” recalls Harteveldt. “Bagels and coffee in the morning; boxed dinners with sliced chateaubriand and salad; the flight attendants hustled to serve everyone meals and then pour two or even three rounds of drinks” in the 45 minutes the plane was in the air.
Trump had only put in $20 million of his own money, and the airline didn’t make nearly enough to service its debt. With no buyers, Trump lost the airline and the banks that had financed the Trump Shuttle deal contracted with US Air to run the operation in 1992. US Air only part-owned the operation (they purchased the remainder in 1997), taking a 40% stake and a 10 year management contract.
Ultimately Trump lost much more than his original investment, forfeiting over $100 million he had personally guaranteed.
While there’s no more gold fixtures in the lavatories, there is a first class cabin on what’s now a mostly regional jet operation.
In 2003 US Airways added first class to the Shuttle — not because they thought they could sell first class seats, but removing coach seats didn’t hurt their ability to carry passengers since the planes rarely went out fully booked. Instead this meant they didn’t even need a dedicate subfleet of aircraft for the operation, and for all intents and purposes the ‘Shuttle’ became just like any other route.
One interesting thing the Peterson piece reminded me of that I had forgotten was Trump’s offer to take over American Airlines just a year into his foray as an airline operator. Trump likely never had financing for his offer, and may have been looking to simply make a trading profit on the American shares he did buy (an amount below the SEC reporting threshold). He ultimately lost money on the offer, though, caught up in the 1989 Friday the 13th stock market mini-crash.
And now of course it’s the American Airlines brand (though in some sense America West) that takes over what was once the Trump Shuttle.