People Express Airlines (1980s)

This article is about the airline that operated during the 1980s. For the later airline, see People Express Airlines (2010s).
PEOPLExpress
IATA ICAO Callsign
PE PEX PEOPLE
Founded 1981 (1981)
Ceased operations 1987 (1987) (acquired by Continental Airlines)
Hubs
Focus cities Baltimore Washington International Airport
Fleet size 75
Destinations 50
Parent company People Express Airlines, Inc.
Headquarters Newark, New Jersey
Key people https://www.wikiwand.com/en/Don_Burr
(First CEO)
Beverly Lynn Burns
(First Woman Boeing 747 Airline Captain)

People Express Airlines, stylized as PEOPLExpress, was an American low-cost airline that operated from 1981 to 1987, when it merged into Continental Airlines. The airline's headquarters was in the North Terminal of Newark International Airport in Newark, New Jersey.

History

Founding and rapid expansion

The company was founded by Don Burr, and several others, who resigned from Frank Lorenzo's Texas International in order to do so. Burr was influenced by British airline entrepreneur Freddie Laker, whose forays into low-cost air travel attracted much press in the 1970s. Terminal space was leased at Newark Airport's North Terminal. The North Terminal was the primary passenger building at the airport until 1974 when Terminal A opened. Prior to People Express, the North Terminal was used by World Airways, and prior to the opening of Terminal C, North Terminal was used for international arrivals.

People Express Boeing 747 at London Gatwick Airport

People Express (PEx) was launched on April 30, 1981 with 737s from Newark to Buffalo, Columbus and Norfolk; Jacksonville and Cleveland Hopkins were added a month later. In December PE had 42 weekday departures from EWR to Baltimore/Washington, Boston Logan, Burlington, Buffalo Niagara, Port Columbus, Jacksonville, Norfolk, Sarasota-Bradenton, Syracuse Hancock and Palm Beach plus some flights around the periphery of the hub-and-spokes.

On May 26, 1983 People Express began non-stop flights from Newark to London's Gatwick Airport with a leased Boeing 747-227B previously operated by Braniff International Airways. Flights started at $149 each way. The airline was an instant success with all flights sold out.

Revenue Passenger-Kilometers, in millions
Year Traffic
1981 650
1982 2502
1983 5902
1984 12391
1985 17638
Source: Air Transport World

The airline used a simplified fare structure. All seats on a route were offered at the same price except for slightly-lower "off-peak" fares. All seats were in economy class except for "Premium Class" on overseas flights. Fares were paid in cash aboard the aircraft early in the flight. Passengers were permitted to bring one carry-on bag for free and each checked bag cost $3.00. People Express was the first United States airline to charge a fee for each checked bag. People Express also charged modest amounts for customers wanting food or beverages. Sodas cost 50 cents per can, honey-roasted peanuts and Rachel's brownies were also 50 cents, and the famous People Express "snak-pak" (an assortment of cheeses, crackers and salami) cost $2.

Acquisitions of other airlines

In 1985 People Express bought out Denver-based Frontier Airlines. The combined company had flights to most major U.S. cities and to Brussels. People Express also bought midwest commuter carrier Britt Airways and Provincetown-Boston Airlines (PBA), a regional airline serving New England and Florida.

By June 1985, People Express had lost $5.8 million on operating income of $18.7 million.[1]

On August 2, 1985, the company announced it was launching daily Boeing 747 service between Brussels and Newark at the prices of $149; to promote the new route, fares were discounted to $99 until September 30.[1] By that time, the airline flew to 41 cities worldwide, with 4,000 employees and a fleet of 72 airplanes.[1]

The purchasing spree placed an enormous debt burden on the carrier at the same time major legacy carriers' improved yield management schemes enabled them to better compete with People Express fares. Integrating Frontier's operations caused labor struggles within the newly absorbed airline, and the change to a low-fare, no-frills mentality alienated Frontier's passengers.

Debt pressure on the carrier forced a change in philosophy, as People Express sought to lure business travelers who would pay higher fares. Aircraft cabins were redesigned to include a first-class section, a frequent flyer plan was initiated, and the simplified fare structure was abandoned in favor of the now-usual "revenue management" pricing.

Merger with Continental Airlines

The failed integration and enormous debt stretched People Express too far, and in June 1986, the company announced they were working with an investment bank to seek buyers for part, or all, of the airline. A deal to sell Frontier off to United Airlines fell through due to the inability of United to agree to terms with their unions on how to incorporate Frontier's staff, leading People Express management to cease Frontier's operations and file for bankruptcy protection for the subsidiary.

In the end, People Express was forced to sell entirely to Texas Air Corporation for roughly $125 million in cash, notes, and assumed debt. Due to concerns about regulatory approval for the purchase, Texas Air purchased the assets of Frontier from People Express in a separate transaction worth $176 million. People Express ceased to exist as a carrier on February 1, 1987, when their operations were merged into the operations of Continental Airlines, another Texas Air subsidiary, under a joint marketing agreement.

People Express' spartan, no-frills service earned the carrier several derisive nicknames, including "People Distress" and "Air Bulgaria" (a sarcastic reference to the poor customer service associated with Eastern Bloc countries during the Cold War).[2]

Reuse of name

On February 13, 2012, Newport News/Williamsburg International Airport announced the resurrection of the PEOPLExpress brand for a start-up airline.[3] Corporate headquarters for the airline were located in Newport News. Service was initially anticipated to begin from Pittsburgh in late 2013. However this was delayed until 2014 due to the lengthy certification process.[4] On October 5, Jeffrey Erickson, former Atlas Air President and CEO was announced as PEOPLExpress CEO.[5]

Having eventually started service on June 30, 2014, PEOPLExpress abruptly suspended service on September 26, 2014 due to its two planes being grounded for maintenance and repairs.[6]

On November 12, 2014, PEOPLExpress was evicted from the Newport News/Williamsburg International Airport due to non-payment of Passenger Facilities Charges of US$100,000.[7]

Fleet

This was the fleet at the time of People Express's buyout from Continental Airlines.

People Express Fleet
Aircraft Total Passengers
(Economy)		 Notes
Boeing 727-200 50 185
Boeing 737-100 17 118
Boeing 737-200 5 130
Boeing 747-100 3 435 Bought from Alitalia
Boeing 747-200 6 435

In popular culture

On the animated sitcom The Simpsons season 5 premiere episode "Homer's Barbershop Quartet", Homer Simpson says "People Express introduced a generation of hicks to air travel", when talking about the year 1985.

Headquarters

The PeopleExpress headquarters were on the grounds of Newark International Airport.[8] The headquarters offices, described by the Miami Herald as "a maze-like bevy of small offices," were in an attic,[9] located on the second floor of the North Terminal.[10][11] The North Terminal first opened in 1953.[12] Before the arrival of PeopleExpress, the terminal was largely unused, although it had some charter flights departing and arriving there.[13] After the end of PeopleExpress, the Department of Veterans Affairs used the former terminal as a transfer point for casualties in the Gulf War.[14] In 1997 a project to demolish the North Terminal and redevelop the land was underway, with a cost of $50.1 million.[15]

References

  1. 1 2 3 "People Express to Begin New York-Brussels Flight With $99 Introductory Fare". Associated Press. August 2, 1985. Retrieved 2014-10-23.
  2. ↑ William S. Frank (October 30, 2006). "Leaders should beware of uncontrolled growth". Denver Business Journal. Retrieved July 8, 2009.
  3. ↑ Mutzabaugh, Ben (February 13, 2012). "PEOPLExpress tries to fly again as new start-up". USA Today.
  4. ↑ "New People Express faces delays". Pittsburgh Business Times. 17 July 2012.
  5. ↑ "People Express expects CEO pick on the money". Daily Press. October 5, 2013. Retrieved October 5, 2013.
  6. ↑ "Skies darken for new airline PEOPLExpress". Post-Gazette. October 1, 2014. Retrieved October 22, 2014.
  7. ↑ "PeopleExpress Evicted". WAVY-TV.
  8. ↑ "World Airline Directory." Flight International. March 30, 1985. 106." Retrieved on June 17, 2009.
  9. ↑ "On the Cheap." Miami Herald. May 1, 1983. 1F Business. "Finding someone at People Express' headquarters is not always easy. The company occupies a maze-like bevy of small offices chipped out of the attic above a terminal building at Newark International Airport."
  10. ↑ Kiefer, Francine. "At People Express the rush to profits never slows down." Christian Science Monitor. Monday December 19, 1983. 1. Retrieved on March 2, 2010. "Here on the second floor of the Newark International Airport, executives fly in and out of their tiny offices, cluster for a short while in the narrow hallway, and then suddenly disperse."
  11. ↑ Jouzaitis, Carol. "Sky the limit for People Express." Chicago Tribune. June 17, 1984. Start Page G1, 2 pages. Retrieved on March 2, 2010. "A little more than three years ago, Newark International Airport's North Terminal was a dusty, dilapidated, rodent-infested shell, abandoned by the airlines for new facilities nearby."
  12. ↑ "Slow Return as Hub for Aviation; After 67 Years, Newark's First Terminal Has New Life." The New York Times. April 27, 2002. B1, New York Edition. 2. Retrieved on March 2, 2010. "Ultimately, Building 51 was replaced by a new Newark terminal in 1953, which later became known as the North Terminal."
  13. ↑ "PEOPLE EXPRESS LEASES UNFINISHED NEWARK AIRPORT TERMINAL." Associated Press at The New York Times. Sunday January 20, 1985. Late City Final Edition, Section 1, Page 36, Column 3. Retrieved on March 2, 2010. "People Express started operations in April 1981 in Newark Airport's North Terminal, which had been largely unused except for charter flights."
  14. ↑ "VA LEASES N.J. TERMINAL FOR CASUALTIES." Associated Press. February 1, 1991. Retrieved on March 2, 2010.
  15. ↑ Frank, Al. "New York, New Jersey Port Authorities Act On New Airport Facilities.(Originated from The Star-Ledger, Newark, N.J.)" Knight Ridder/Tribune Business News. March 21, 1997. Retrieved on August 27, 2010. "The hangars are located at the northern end of the 2,300-acre airport, where passenger operations were located until the present terminals opened in the 1970s. Another component of the northern area's redevelopment involves the demolition of the North Terminal and the construction of two air cargo terminals. That project, now underway, will cost $50.1 million."

External links

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