Trump Shuttle
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Founded | June 7, 1989 | ||||||
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Ceased operations | April 7, 1992 (rebranded as Parent company The Trump Organization (1989—1992) | | |||||
Key people | Donald Trump |
Trump Shuttle, Inc. was an airline owned by businessman
Trump's formal launch in the air business occurred in March 1988 when he acquired three Sikorsky S-61 helicopters that belonged to Resorts International Airlines (RIA) used to shuttle high rollers to the Resorts Casino Hotel in Atlantic City, New Jersey.[2] The three green and orange helicopters were repainted black and red and emblazoned with the Trump Air logo.[3]
History
Formation
In the late 1980s, both
Eastern president Frank Lorenzo met Donald Trump at a party, and subsequently negotiated the sale of the shuttle to Trump for $365 million, more than the projected cost to start up a similar airline, but justifiable if the airline achieved a high market share.[5] For that price, Trump got a fleet of 17 Boeing 727s, landing facilities in each of the three cities that the shuttle flew to, and the right to put his name on the company and its airplanes.[6] The shuttle had previously been a "no-frills" operation for business travelers, but Trump announced that he would convert it to a luxury airline.[7]
After reaching an agreement with Trump in October 1988, Eastern filed for Chapter 11 bankruptcy protection. Many passengers switched to the competing Pan Am Shuttle, and the previously profitable Eastern Shuttle began losing money. Trump attempted to use the situation to negotiate a lower price and to acquire additional aircraft from Eastern. America West Airlines submitted a more attractive competing offer on May 10, but failed as its financing was not in place. Trump's offer was approved by the bankruptcy court in May 1989.[7] In June 1989 the deal was completed, financed through a loan from a syndicate of banks led by Citibank.[8]
The new Trump Shuttle operation launched on June 8, 1989, and by the end of August had returned to a strong market share of 40-50%. Trump pushed to make the new shuttle a luxury service and a marketing vehicle for the Trump name. Its aircraft were newly painted in white livery and the interiors redecorated with such features as maple wood veneer, chrome seat belt latches, and gold colored lavatory fixtures. The airline also was a leader in the adoption of advanced technologies: It introduced some of the first passenger self-service check-in kiosks, in coordination with
August 1989 incident
In August 1989, a Trump Shuttle flight arriving in Boston incurred a nose gear failure upon landing due to maintenance errors by Eastern personnel prior to the acquisition.[5] Trump personally flew on the next Trump Shuttle flight to Boston in order to manage the public reaction to the incident.[5]
Financial difficulties
(USD 000) | 1990[10] | 1991[11] |
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Operating revenue | 172,013 | 169,096 |
Operating loss | (40,122) | (24,671) |
Net loss | (68,761) | (58,552) |
Operating margin | -23.3% | -14.6% |
Net margin | -40.0% | -34.6% |
The company was never profitable.[6] Passenger traffic on the shuttle began to decline in November 1989. In late 1989, the Northeastern United States entered an economic recession which depressed demand, while the August 1990 Iraqi invasion of Kuwait caused jet fuel prices to double.[5] While costs of running the airline rose, many of the corporate customers using the shuttle were cutting travel budgets. Trump's casino business was simultaneously encountering serious difficulties, and Trump was forced to cede control over several business holdings to his bankers in June 1990 in order to avoid personal bankruptcy. The airline ran out of cash and defaulted on its debt in September 1990.[7]
Trump Shuttle conducted some charter operations around this time to monetize the shuttle's spare aircraft. In June 1990, the airline carried
Sale
Trump had personally guaranteed $135 million of the shuttle's debt. Following the default, Citibank made arrangements for Northwest Airlines to take control of the shuttle in exchange for relieving Trump's personal liability on its debt, and all sides were reportedly close to an agreement by April 1991.[8] Delta Air Lines agreed to buy the competing Pan Am Shuttle in July, and Northwest announced that its acquisition of the Trump Shuttle was cancelled in August, reportedly due to the Trump Shuttle's unions demanding parity with Northwest employees and Trump refusing to discount the price to reflect this.[7] USAir ultimately reached an agreement in December 1991 to take operational control of Trump Shuttle for up to ten years, with an option to buy it after five years.[13] Bankers involved in the negotiations said that Trump would be relieved of at least $100 million of his guarantee, and possibly as much as $110 million, leaving him owing between $25 and $35 million in the closing out of his ownership of the company.[13]
On April 7, 1992, Trump Shuttle ceased to exist when it was merged into a new corporation, Shuttle, Inc., which began operating as the USAir Shuttle on April 12, 1992. US Airways subsequently purchased the remainder of Shuttle, Inc., on November 19, 1997, and the service subsequently operated under the name US Airways Shuttle. Shuttle, Inc., remained as a subsidiary of US Air Group until July 1, 2000, when it was merged into US Airways. In October 2015, US Airways merged with American Airlines, at which point the shuttle became the American Airlines Shuttle.[14]
Helicopter service
Trump Air operated a scheduled helicopter service between LaGuardia Airport and Wall Street Heliport to provide connections with Trump Shuttle flights at LaGuardia.[15]
Trump Air also operated between New York City and East Hampton Airport from 1989 to 1992, and between West 30th Street Heliport and Steeplechase Pier in Atlantic City to serve Trump's casinos. It used a combination of Sikorsky S-61 and Boeing Chinook helicopters.[2][16] It was established on March 22, 1988, with three Sikorsky S-61 helicopters, which could carry 24 passengers each, with service between the West 30th Street Heliport in Manhattan and Bader Field and the Steeplechase Pier in Atlantic City.[2] Fares were from $49–125, and travel time was 48 minutes.[2] One of the helicopters had already been operating for about a month.[2] Trump had acquired the helicopters, which had been Resorts International Air, as part of his 1988 deal with Merv Griffin following Griffin's takeover of Resorts International Inc.[2][17][18]
Fleet
The Trump Shuttle fleet consisted of the following aircraft:[19]
- 8 Boeing 727-100
- 17 Boeing 727-200
See also
References
- ^ "Codes IATA/OACI by airline". www.al-airliners.be. Retrieved 2017-08-21.
- ^ Daily Record. Morristown, New Jersey. Associated Press. March 24, 1988. p. 26 (B10). Archived from the original on November 15, 2020. Retrieved November 14, 2020.)
{{cite news}}
: CS1 maint: bot: original URL status unknown (link - ^ Chadwick, Bruce (March 27, 1988). "Atlantic City Confidential". Daily News. New York City. p. 313 (24). Archived from the original on June 7, 2019. Retrieved November 14, 2020.
{{cite news}}
: CS1 maint: bot: original URL status unknown (link) - ^ ISSN 0362-4331. Retrieved 2017-08-21.
- ^ a b c d e Viser, Matt (2016-05-27). "Donald Trump's airline went from opulence in the air to crash landing". The Boston Globe. Retrieved 2017-08-21.
- ^ a b "10 Donald Trump Business Failures". Time. April 29, 2011. Retrieved January 18, 2019.
- ^ a b c d e "Special Friday Flashback: When Trump Ran 'The Shuttle'". Airways Magazine. 2017-01-20. Archived from the original on 2017-08-21. Retrieved 2017-08-21.
- ^ ISSN 0362-4331. Retrieved 2017-08-21.
- WBUR. Retrieved 2017-08-21.
- ^ Air Transport Association 1991 Annual Report
- ^ Air Transport Association 1992 Annual Report
- ISSN 0458-3035. Retrieved 2017-08-22.
- ^ ISSN 0362-4331. Retrieved 2017-08-21.
- ^ "Trump Shuttle: When President Trump Owned an Airline... And Failed". International Aviation HQ. Retrieved 2019-07-26.
- ^ "Trump Air - The Trump Shuttle Connection". www.timetableimages.com. Retrieved 2017-08-22.
- ^ Rattiner, Dan (January 13, 2017). "Trump's Choppers: From 1989–92 Trump Ran a Hamptons Helicopter Service". Dan's Papers. Hamptons, Long Island, New York. Archived from the original on November 15, 2020. Retrieved 2017-08-22.
- New York Times. Retrieved November 14, 2020.
- Washington Post. Retrieved November 14, 2020.
- ^ "Trump Shuttle". rzjets. Retrieved 7 September 2019.
External links
- Media related to Trump Shuttle at Wikimedia Commons