By Alexandra Skores, Chris Isidore, CNN
Washington (CNN) — It was the late 1980s, and Eastern Airlines was on the brink of bankruptcy after years of financial problems, labor issues and struggling to adapt to deregulation.
Businessman Donald Trump saw an opportunity and seized it. He purchased the airline’s most profitable asset, the Eastern Shuttle, which flew between New York, Washington and Boston, for $365 million. The deal – which some experts considered overpriced – included landing rights, 21 older Boeing 727 planes, and terminals, all of which Trump promised to make luxurious.
“What I want to do is run it as a diamond: an absolute diamond,” Trump said in a press conference at The Plaza hotel announcing the deal in 1988.
“I don’t know how profitable it is going to be. I think I would enjoy running it,” he told CNN when he was fending off a competing offer from America West Airlines.
But Trump’s airline was never profitable, and it lasted just a few years before he lost control to his creditors who sold it to USAir, later known as US Airways.
“An economic recession that caused big corporations to cut back on air travel and Middle East tension as Iraq invaded Kuwait (causing jet fuel to double), placed enormous pressure on the Trump Shuttle,” according to US Airways.
The story of the Trump Shuttle mirrors some of the challenges airlines are facing this year as they come to the former airline owner turned two-term president for help.
Budget carrier Spirit Airlines is reportedly seeking a $500 million financial bailout to keep itself from having to halt operations altogether. That’s separate from another $2.5 billion other discount carriers, like Frontier, Allegiant and Breeze, are asking for to endure the current spike in jet fuel prices caused by the war in Iran.
The Trump Shuttle
On the first day of flying, June 8, 1989, Trump cut ribbons inaugurating service at his terminals with a string quartet, champagne and a lavish buffet.
“We are going to give the best service. We are going to have the most beautiful planes. We have the best terminals,” Trump told CNN at the launch party at LaGuardia Airport.
He launched million-dollar-a-plane upgrades that included gold-plated fixtures, maple veneer, and leather seats.
Henry Harteveldt is president of Atmosphere Research Group and a travel industry analyst. He also was the first marketing director of the Trump Shuttle.
“Mr. Trump saw the air shuttle as a platform to not just enter commercial aviation, but as something that would be the foundation of what would eventually become a larger carrier,” Harteveldt said.
Trump Shuttle operated flights every hour on the hour. Like Eastern, the airline promised passengers that if a flight was full, the shuttle would roll out a second plane – even for just one passenger.
The 727s were white and painted with just one word on them, “TRUMP,” in hopes the airline would rapidly grow beyond northeastern shuttle service and the paint job would not have to change, Harteveldt said.
“I hope my name does a lot for the shuttle itself, but I hope the shuttle does a lot for my name,” Trump said after the deal was approved.
But all of the parties and optimism came at the wrong time.
Just a few months after the first flights, the United States entered a recession, which curtailed some busines