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People Express Airlines (1980s)

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This article is about the airline that operated during the 1980s. For the later airline, see People Express Airlines (2010s).

People Express Airlines, stylized as PEOPLExpress, was a low-cost airline in the United States that operated from 1981 until it merged with Continental Airlines in 1987. Its headquarters was in the North Terminal (later Terminal C) of Newark Liberty International Airport (EWR) in Newark, New Jersey.

PEOPLExpress
IATA ICAO Call sign
PE PEX PEOPLE
FoundedApril 30, 1981; 43 years ago (1981-04-30)
Ceased operationsFebruary 1, 1987; 37 years ago (1987-02-01)
(merged into Continental Airlines)
Hubs
Focus citiesBaltimore
Subsidiaries
Parent companyTexas Air Corporation (1986–1987)
HeadquartersNewark, New Jersey, U.S.
Key peopleBeverly Lynn Burns (First female Boeing 747 airline captain)
FounderDon Burr (First CEO)

History

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Founding and rapid expansion

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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 was launched on April 30, 1981, with Boeing 737 flights 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 route 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[incomplete short citation]

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 Boeing 747 flights which featured two class service. 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¢ per can, beer cost $1 per can, honey-roasted peanuts and Rachel's brownies were also 50¢, and the People Express "snak-pak" (an assortment of cheeses, crackers, and salami) cost $2.

By 1986, People Express was offering first class in addition to coach seating on all of its Boeing 747 aircraft.[1] A full color print ad at the time stated: "AHHH....THE THINGS SOME PEOPLE HAVE TO DO TO SAVE MONEY. Introducing People Express First Class. Spacious leather seats, two abreast. Service beyond compare. Fine china, crystal and linen. Fresh flowers....A price lower than most standard coach fares on other airlines." This first class service was available on transatlantic flights between Newark and Europe, on transcontinental flights between Newark and California, and on 747 flights between Newark and Denver.

Acquisitions of other airlines

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In 1985 People Express bought out Denver-based Frontier Airlines. The cover of the May 1, 1986, People Express timetable had the following message: "We're Flying The Widest Plane To The Highest Place: Introducing The Only 747 Service From New York To Denver. PEOPLExpress & Frontier"[2] This 747 service linked the People Express hub at Newark Airport with the Frontier hub in Denver. The combined company operated flights to most major U.S. cities as well as international service to Brussels and London. People Express also bought two commuter air carriers, Britt Airways in the U.S. Midwest and Provincetown-Boston Airlines (PBA) which served New England and Florida.

By June 1985, People Express had lost $5.8 million on operating income of $18.7 million.[3]

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.[3] By that time, the airline flew to 41 cities worldwide, with 4,000 employees and a fleet of 72 airplanes.[3]

The purchasing spree placed an enormous debt burden on the carrier at the same time that the major legacy carriers' improved their yield management schemes, enabling them to better compete with People Express fares.[citation needed] 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.[citation needed]

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

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The failed integration and enormous debt stretched People Express too far, and in June 1986, the company announced that it was 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.[4] Due to concerns about regulatory approval for the purchase, Texas Air first purchased the assets of Frontier from People Express in a separate transaction worth $176 million and then merged Frontier into Continental Airlines, another Texas Air subsidiary. People Express ceased to exist as a carrier on February 1, 1987, when its operations were subsequently merged as well into Continental Airlines via a joint marketing agreement. Continental maintained the Newark hub built by People Express, which passed to United Airlines after United and Continental merged in 2010.

People Express's 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).[5]

Destinations in 1986

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According to its September 15, 1986 route map, People Express was serving the following cities.[6] Cities in bold were served with Boeing 747s.

The route map includes service operated by commuter air carriers Provincetown-Boston Airlines (PBA) in Florida and the U.S. northeast, and Britt Airways in the U.S. midwest. PBA had a hub at St. Petersburg (PIE) in Florida and also served Hyannis, Martha's Vineyard, Nantucket and New Bedford in the U.S. northeast. Britt had hubs at Chicago (ORD) and St. Louis.

Fleet

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People Express operated the following jet aircraft types at the time of its merger with Continental Airlines:

People Express Fleet
Aircraft Total Passengers
(Economy) 		Notes
Boeing 727-200 50 185 Braniff, Delta & Alitalia
Boeing 737-100 17 118 Bought from Lufthansa
Boeing 737-200 5 130
Boeing 747-100 3 435 Bought from Alitalia
Boeing 747-200B 6 435
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On the episode of animated sitcom The Simpsons, Homer Simpson describes 1985 as the year "People Express introduced a generation of hicks to air travel" in the 1985-set flashback episode "Homer's Barbershop Quartet"

Headquarters

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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 launched at a cost of $50.1 million.[15]

Reuse of name

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Main article: People Express Airlines (2010s)

On February 13, 2012, Newport News/Williamsburg International Airport announced the resurrection of the People Express brand for a start-up airline.[16] 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.[17] On October 5, Jeffrey Erickson, former Atlas Air President and CEO was announced as People Express CEO.[18]

Having eventually started service on June 30, 2014, People Express abruptly suspended service on September 26, 2014, due to its two planes being grounded for maintenance and repairs.[19] Service never resumed.

On November 12, 2014, this new version of People Express was evicted from the Newport News/Williamsburg International Airport due to non-payment of Passenger Facilities Charges of US$100,000.[20]

See also

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References

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  1. ^ http://www.departedflights.com, Airline Advertisements, 1986 People Express print ad, "Ahhh...the things some people have to do to save money"[full citation needed]
  2. ^ http://airtimes.com, May 1, 1986 People Express timetable
  3. ^ a b c "People Express to Begin New York-Brussels Flight With $99 Introductory Fare". Associated Press News. August 2, 1985. Retrieved October 23, 2014.
  4. ^ "Texas Air will buy People Express". Lewiston Morning Tribune. (Idaho). Associated Press. September 16, 1986. p. 3A.
  5. ^ William S. Frank (October 30, 2006). "Leaders should beware of uncontrolled growth". Denver Business Journal. Retrieved July 8, 2009.
  6. ^ http://www.departedflights.com, Sept. 15, 1986 People Express route map
  7. ^ "PEourlowpricetothewest".
  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."
  16. ^ Mutzabaugh, Ben (February 13, 2012). "PEOPLExpress tries to fly again as new start-up". USA Today.
  17. ^ "New People Express faces delays". Pittsburgh Business Times. July 17, 2012.
  18. ^ "People Express expects CEO pick on the money". Daily Press. October 5, 2013. Retrieved October 5, 2013.
  19. ^ "Skies darken for new airline PEOPLExpress". Post-Gazette. October 1, 2014. Retrieved October 22, 2014.
  20. ^ "PeopleExpress Evicted". WAVY-TV.
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