Trump Airlines, Trump Steaks, Trump Magazine: Serial Business Failures
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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.
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.
Timeline
Sequence of events
January 1, 1988
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.
January 1, 1990
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.
January 1, 1992
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.
January 1, 2005
Trump Vodka launched — discontinued 2011
Trump Vodka launches as a luxury vodka brand. It fails to gain market share and is discontinued by 2011.
April 1, 2007
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
Verification