Trump Airlines, Trump Steaks, Trump Magazine: Serial Business Failures
Trump purchased the Eastern Air Shuttle for $365 million in 1988 and renamed it Trump Shuttle. Unable to make debt service payments on the junk bonds used to finance the purchase, Trump lost control of the airline to creditors in 1992 — it operated for only four years. Trump Steaks were sold through The Sharper Image beginning in 2007 and discontinued within two months due to poor sales. Trump Magazine was launched in 2007 and folded within five months. Trump Vodka was launched in 2005 and discontinued by 2011. The pattern across these ventures was consistent: launch with celebrity promotion, heavy licensing of the Trump name, and eventual failure attributed to market conditions.
Record summary
Grade
Grade 2 of 5: Major Abuse of Power
Executive actions that exceed constitutional authority, circumvent statutory constraints, or weaponize government institutions for political ends. Scale and definitions
- Status
- Concluded
- Incident date
- Record updated
- Location
- New York, NY
- Category
- Corruption & Self-Dealing
- Legal posture
- Reported
- War-crime classification
- Enabling conduct
- Verification
- Independently verified
- ICC relevance
- No
- Sources
- 3 cited
- Stable ID
trump-pre-presidency-business-failures-airlines- Victims
- Investors and creditors who financed failed ventures; employees who lost jobs in business failures; shareholders and bondholders of publicly traded entities
- Alleged responsible parties
- Donald Trump, Founder and named brand; used personal brand to launch ventures that failed while often retaining licensing fees— Trump Organization
Key points
- Trump Shuttle (formerly Eastern Air Shuttle) was purchased in 1988 for $365 million financed with $380 million in bank loans; Trump was unable to make debt service payments and defaulted in 1990; the airline was controlled by creditors and eventually sold; Trump lost it in 1992 after only four years
- Trump Steaks were launched at The Sharper Image in May 2007 with Trump personally promoting them on a home shopping channel; they were discontinued within two months; the Sharper Image CEO noted that customers 'don't really think of The Sharper Image as a food destination'
- Trump Magazine was launched in 2007 as a quarterly lifestyle publication and folded within five months, after six issues; a previous Trump publication, Trump Style, had also failed; the magazine's content was largely promotional material for Trump properties
- Trump Vodka was launched in 2005 in partnership with Drinks Americas; it was promoted as a luxury vodka and discontinued by 2011 after failing to gain market share; Trump's distribution partner also exited the business
- Trump University (documented separately) was the most legally consequential failed venture, resulting in a $25 million fraud settlement; the broader pattern of business failures contradicted Trump's core political credential of business acumen
- Trump licensed his name for projects worldwide — Trump Tower Manila, Trump Ocean Club Panama, Trump SoHo — many of which failed or were embroiled in controversy; the licensing model allowed Trump to collect fees while the actual risk fell to outside investors and developers
Overview
The list is long. Trump Airlines: four years, ended in default. Trump Steaks: two months. Trump Magazine: five months. Trump Vodka: six years, no market share. Trump University: fraud settlement (documented separately). The Atlantic City casinos: six bankruptcies.
Trump's central political credential was that he was a successful businessman. The record is available for examination.
Trump Shuttle
The Eastern Air Shuttle was a profitable commuter service between Boston, New York, and Washington. Trump paid $365 million for it — financed almost entirely by bank loans. He rebranded it with gold-trimmed interiors and his name on the tails.
He was unable to make debt service payments within two years. Creditors took control. He held the airline for four years and lost it in default.
The Licensing Model
Many of Trump's later ventures used a different structure: he licensed his name and collected fees while the actual risk was borne by outside developers and investors. Trump Tower Manila, Trump Ocean Club Panama, Trump SoHo — in these deals, Trump received licensing fees regardless of whether the project succeeded.
When the projects failed, Trump retained the fees. The investors lost their money.
The Credential Problem
Every time Trump ran for president, his central argument was that he was a successful businessman who would apply that success to governing. The argument required ignoring the record of business failures documented above.
His supporters generally preferred the argument to the record.
Update log
-
Documented from reporting during 2016 presidential campaign.
Sequence of events
-
Trump purchases Eastern Air Shuttle — $365M in debt
Trump purchases the Eastern Air Shuttle for $365 million, financed primarily with bank loans. He renames it Trump Shuttle and launches with promotional fanfare.
-
Trump Shuttle defaults on debt payments
Trump is unable to make debt service payments on the Trump Shuttle acquisition. Control shifts to creditors. The airline operates in a financially distressed state.
-
Trump loses control of airline — creditors take over
Trump loses control of Trump Shuttle to creditors. The airline is sold and rebranded. Trump's four-year ownership of an airline ends in default.
-
Trump Vodka launched — discontinued 2011
Trump Vodka launches as a luxury vodka brand. It fails to gain market share and is discontinued by 2011.
-
Trump Steaks launched — discontinued within two months
Trump Steaks launch at The Sharper Image. They are discontinued within two months due to poor sales. Trump Magazine also launches and folds within five months.
Sources
- Donald Trump's Business Record — The New York Times
- Trump's business failures: A comprehensive accounting — The Washington Post
- Trump's failed business ventures — The Associated Press