Donald Trumps the Shuttle

By Nancy R. Gibbs

For 27 years the Eastern Airlines shuttle has ferried the high and mighty up and down the BosNyWash corridor with the comfort of a cattle car but the cachet of a stretch limousine. Every hour on the hour, Senators squeezed three abreast with generals, moguls, salesmen, anchormen, accountants and academics enduring the ultimate power trip. There were no reserved seats, no in-flight entertainment, no hot towels and, until recently, no coffee or tea. But the shuttle has never been about comfort. It is about urgency and influence, the mustn't-keep-the-Joint-Chiefs-waiting mentality, the snap of starched shirts, the rustle of the financial pages, the aisles cluttered with dropped names. Also, it is one of the most profitable airline operations in America.

Never one to pass up a good thing, billionaire developer Donald Trump entered the airline business last week. He bought the shuttle from Frank Lorenzo, who owns Texas Air, which owns Eastern, for roughly $365 million in cash. For that Trump gets a fleet of 17 Boeing 727s, landing facilities in Boston, New York City and Washington, and the right to stencil his already ; household name on the tail of an Establishment institution. And never one to leave well enough alone, Trump vowed to run it as a "diamond," with immaculate planes swooping in and out on time, providing his signature brand of first-class service to passengers who recognize it when they see it.

When Eastern began shuttling in 1961, the service made its mark by guaranteeing passengers a seat with no reservations required. The airline even promised that a plane would take off with only one passenger on board, a promise it has kept five times. The service grew to 60 flights a day, 3 million passengers a year. So many people were commuting between the three cities that Pan Am decided to jump into the market two years ago, offering coffee, rubbery bagels, seat phones and boat service connecting a swank art deco terminal to Wall Street. This prompted Eastern to counter with some apple juice of its own. Though Eastern's market share dropped from roughly 80% to 58%, it remained the most profitable segment of Lorenzo's airline empire.

In announcing his purchase, Trump called the shuttle "unique," and with characteristic syntax and bravado vowed to make it more so. "I want the planes to be beautiful," he said, "totally renovated and as nice as any in the air." At the moment, argues Alan Taylor, an image consultant to 28 airlines, the shuttle lacks a sense of style. "In the Trump name there's a certain magic," he says. "This basic transportation product can borrow some of that luster, that halo of success."

But there are those who wonder if the shuttle's aura can survive Trump's touch. Some suggest that the ascetic aesthetic of the old shuttle rather than a glitzier image of a flying casino may be better suited to its puritanical passengers. "It's pretty much a business operation," says airline analyst Raymond Neidl. "If he glitzes it up too much, the average guy will say, 'That's not my ball of wax.' "

Trump, however, may have other motives in mind. When his vast, 1,250-room Taj Mahal hotel and casino is finished in December 1989, he will control one- quarter of the casino hotel rooms in Atlantic City. Last year almost 4 million people visited the city, but only half a million arrived by air. If Trump diverts some weekend shuttle flights to Atlantic City, he could offer package deals to lure gamblers from up and down the Eastern seaboard. "That's just what Atlantic City needs to goose up its growth rate," says Neidl. "It could be a real shot in the arm."

Trump is also in a good position to boost northeast-corridor profits even further. Shuttle prices have been going up, from $69 in 1985 to $99 today, while fuel costs are going down. As the cash purchase demonstrated, Trump has the capital to expand and improve service in ways that Lorenzo could not. He is also likely to be spared the crippling labor disputes that have dogged Lorenzo and prior owners for the past ten years. Lorenzo has been wrestling with his unions in an effort to cut costs, and the infusion of cash is likely to strengthen his hand.

But the transaction is still not a fait accompli: Eastern's unions immediately threatened to block the deal in court. Though Trump promised that shuttle employees would be "well taken care of," the rest of the workers fear that the sale of the profitable shuttle is just the first stage in the dismantling of the Eastern empire. If it goes through, it is certainly the latest conquest for the Trump empire. By announcing his acquisition in the Grand Ballroom of New York's landmark Plaza Hotel (another recent purchase), Trump reminded his audience that when it comes to collecting varied treasures and making them his own, he is in a class by himself.

With reporting by Michael Cannell/New York