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November 12, 2009

Is Donald Broke? Trump Selling His Pimped-Out 727

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For sale: 1968 Boeing 727-23, engines recently overhauled, gas guzzler but runs great, new paint, seating for 24 passengers, master bedroom and bath with shower, five-setting dining table, many more VIP enhancements. Offered by a man best known for plastering his name on everything he owns, including the 30ft x 4ft gold-leaf letters covering both sides of the fuselage, asking $8 million OBO.

Donald Trump‘s iconic 727, registration VP-BDJ, is on the block, according to a CNNMoney.com report published on Tuesday. A Trump spokesman says the real estate mogul is in the market for a newer, larger plane with lower operating costs.

The main image on the promotional brochure seems to be a screenshot from Microsoft Flight Simulator. Click to read the booklet.

The featured image on the cover of the promotional brochure seems to be a screenshot from Microsoft Flight Simulator. Click the image to read the booklet.

The 41-year-old former American Airlines jet (two years older than Donald’s lovely wife, Melania) was purchased by Trump in 1997. Trump bragged about the deal he got on it while touting his own deal-making and value-finding abilities on his television show The Apprentice, though if not for Trump’s own failure in the airline business, he might not own it at all. After 13 years as a workhorse in the American Airlines fleet, the aircraft was sold and converted to bizjet duty by the Diamond Shamrock oil company in 1981, and later resold a couple of times over to similar concerns. Trump’s short-lived Trump Shuttle flew it briefly in the early 1990s before the carrier ultimately failed, when it was liquidated and scooped up by an aerospace company. Trump repurchased the aircraft in 1997 for personal use and has flown it ever since.

Well, at least until recently. The Trump 727 has, for a very large portion of its time in Donald’s ownership, been parked at LaGuardia Airport, used mostly for weekend jaunts between the Big Apple and his Mar-a-Lago estate in Palm Beach. But, over the past couple of years, seemingly coinciding with the collapse of the real estate market and Trump’s own rumored financial difficulties, VP-BDJ has seen less action, sometimes remaining parked at LaGuardia for weeks on end, or disappearing for months on end. Some of these vanishing acts were due to maintenance and overhauls—most recently an apparent paint job and interior update according to the sales brochure. But even after apparently re-entering service, Donald has been leaving it abandoned. Surely he hasn’t been holed up in Trump Tower all this time, has he?

Of course not. Trump’s Sikorsky S-76 has still been picking Donald up from Midtown for weekend jaunts, but instead of dropping him off at LGA, has been flying him about 40 miles east to Farmingdale Republic Airport on Long Island, where he has been spotted boarding run-of-the-mill, rent-by-the-hour bizjets like Embraer Legacys, or hitching a ride on his business partner Louis Cappelli’s Gulfstream G550. Yep, the kind mere really rich guys use, not exactly the over-the-top billionaire status we’ve come to expect from Trump.

Is Donald simply being thrifty in tough times or could all this indicate a serious Trump cash crunch? The 727, with its three-person cockpit crew and monstrous thirst for jet fuel, is estimated to cost $10,000 an hour to operate, which is at least double the cost of renting a Gulfstream. But this is nothing new: She was outdated and comparatively expensive to run from the day he bought her. The cynic wonders if the “getting a bigger jet” spiel is typical Trump “everything-is-amazing-nothing-is-wrong” spin. Trump’s real estate and casino deals are notorious for being mortgaged up to their eyeballs, which can of course lead to serious problems when the housing and commercial space markets are in the toilet as they are now. It was about year ago that Trump was sued by Deutsche Bank for missing a $40 million payment on a personally guaranteed loan financing his Trump International Tower project in Chicago. Earlier this year, Trump’s Atlantic City casino operation, in which he holds a 28% stake, filed for bankruptcy.

Trump’s 727, even with its fine appointments and the cache of a celebrity owner, is not going to net more than a few million dollars. All things being rosy, a multi-billionaire should not have to wait to make such a sale before picking up a new jet. Second, there will never be a better buyer’s market for used jets than right at this moment. The longer he waits for a buyer of the current jet—which could be awhile due to the market and the age of the plane—the more he’ll pay for his new widebody, which is no small detail for a value-seeker like Donald. Forbes did an in-depth review of Trump’s holdings in 2006, which by their estimates totaled $2.6 billion. But the vast majority of that was tied up in highly illiquid real estate, nearly all of which has suffered significant drops in value since then, as well as the value of the Trump name itself, which is directly tied to the perception of him being a billionaire. Despite the tidy $50 million salary Donald pulls in from The Apprentice, he could certainly be having some serious cash flow and liquidity problems, which would put a damper on his ability to fly.

This is all speculation which, from a planespotter’s point of view, I truly hope is false. I would like nothing better than to see a big black, red and gold 767 soaring over LaGuardia sometime soon. For now, we’ll have to reminisce with some pretty pictures of the old bird.

Presuming Donald is not broke, what kind of plane would you like to see him buy? Comment below or sound off in the forums.

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