PEOPLExpress Could Start Operations as Early as This Quarter

By Sam Wozniak / Published May 13, 2014

People_Express_Airlines_(2012)_liveryPEOPLExpress Airlines (PEX) is a name that harkens back to the golden era of commercial aviation. Operating out of Newark airport from 1981 until being acquired by Continental in 1987, PEX established itself as the first true low-cost carrier in the industry; it was the first to charge for checked baggage and pioneered the a la carte model for in-flight services. Now, nearly 30 years later, the brand is making a comeback.

Announced in February 2012, the new PEOPLExpress established its current headquarters and initial focus city at Newport News/Williamsburg International Airport (PHF) in Virginia. The airline will be a re-launch of the iconic 80’s-era brand, with its stated goal of bringing the “fun and excitement back to air travel.”

At the time, the airline made news as the newest start-up to enter the market, but for much of the past two years it has eluded major media coverage, despite being often discussed in the aviation community. According to founder Mike Morisi this silence has been deliberate, as PEX is gearing up for a major announcement later this month.

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The excitement in the air at its PHF office is palpable, for the airline plans to begin operations by the end of the quarter. According to Steve Shatsky, VP of Marketing, details are still being worked out, so legal agreements and competition concerns prevent detailed discussion of fares or route network for this writing. Shatsky was able to add, reassuringly, that “fares are going to be great.” He confirmed that Newark (EWR) would be one of the first airports served from Newport News, as PEX has recently acquired morning and evening slots there. The carrier also applied for open slots at Washington DC’s Reagan Airport, though has not heard back as of yet.

As a more formal announcement is coming in just a few weeks, Shatsky was mum on specific operational details, but was able to shed some light on recent developments and what to expect to hear at the airline’s event.

Although a formal purchase agreement was completed, PEOPLExpress never closed its previously reported acquisition of Xtra Airways due to issues that were discovered during the due diligence process. Not closing the deal was a setback to certification efforts with the DOT and FAA, but not a deal breaker as the airline has worked an arrangement to launch PEOPLExpress branded flights using their own public reservations system under the operating certificate and control of another carrier.

Financing, which has been a formidable obstacle, remains an “ongoing process” says Shatsky, but is “progressing nicely.” Once launched, PEX will continue its efforts to secure an independent DOT/FAA Certification.

A PeopleExpress route map at the apex of its growth in the mid 1980s, when it served London Heathrow, Los Angeles, and San Francisco from Newark. This over-expansion was one of the reasons the airline met its demise and was forced to merge with Continental in 1986.

A PeopleExpress route map at the apex of its growth in the mid 1980s, when it served London Heathrow, Los Angeles, and San Francisco from Newark. This over-expansion was one of the reasons the airline met its demise and was forced to merge with Continental in 1986.

When asked about fleet selection, Shatsky says PEX will launch with three leased Boeing 737-400 aircraft, each configured for 150 passengers. Its end goal is to operate an all-737 fleet, adding aircraft and routes at a planned and controlled pace; a lesson learned from the original PEOPLExpress, which owed its collapse in part to rapid, unsustainable growth.

PEX is also still finalizing fee structures, but will likely be an “unbundled, a la carte” model. Shatsky expects the structure to be similar to Allegiant or Spirit and priced closer to the “actual costs” incurred to PEOPLExpress as opposed to a “we can make money here so let’s charge more” mentality. He says it all lends back to “accessibility.”

To achieve its vision, PEX has assembled an incredible staff with “exceptional backgrounds and immense dedication.” The airline announced Jeff Erickson as its first CEO in October 2013. As a former Founding CEO of Reno Air, as well as President and CEO of both TWA and Atlas Air, “Jeff comes to us with much experience in the industry, and his addition to the team has brought a lot of positive energy and a wealth of additional experience to our launch efforts.”

But staffing at the airline has also been shaky. Resignations, layoffs, and new hires have all occurred within the past year, though mostly lower level staff. “Working for a start-up is a unique challenge that takes a unique individual to maintain their enthusiasm and ride the ups and downs,” Shatsky says. “People chose to stay or not stay depending on their personal situations,” so these [staff] changes shouldn’t be viewed as anything negative. He adds that the “opportunity [to leave] a long lasting impact [on the brand] is exciting, and that the staff has worked really hard and made a lot of progress” since the initial announcement in 2012.

This excitement will soon grow as PEOPLExpress will start to see even more personnel infusions; it recently announced that they were accepting applications for pilots and mechanics. “The lead time required for reviewing applications, hiring, and training people necessitated these postings. Training requirements are a huge hurdle in getting the flight crew ready, so we are developing a pool to draw from.” While announcements have not been posted for flight attendants as of yet, it is expected soon as the training requirements are not as time-consuming. And as launch day approaches, expect to see additional postings for various airport operations positions, such as customer service agents and ground crew.

This launch also comes at a crucial time for the Newport News airport. Shortly after Southwest Airlines’ acquisition of AirTran, it was announced that AirTran would cease operations at the airport, as it already served Richmond (RIC) and Southwest served Norfok (ORF).

FLASHBACK: To these vintage original PeoplExpress timetables and route maps

Newport News Airport. Photo courtesy KMJPhotoy, Creative Commons

Newport News Airport. Photo courtesy KMJPhotoy, Creative Commons

Nearly 50% of the annual passenger volume at Newport News was attributed to AirTran, which flew to high-demand destinations along the east coast (MCO, ATL, LGA, BOS). Its departure devastated flight frequency and destinations, which caused average fares to increase due to the lack of competition. While not necessarily planning to echo AirTran’s old route structure, Shatsky expects PEOPLExpress will be able to start filling the void by bringing back competition.

Of interesting note, there is an infusion of the old PEOPLExpress present at the new start-up: both Shatsky and founder Mike Morisi worked for the original airline in the 80s. “The first PEOPLExpress wasn’t about hassle, it was about excitement and fun,” he says. Back then, the fares were incredible and people wanted to fly; the airline “used to have standby lines with as many people as there were seats on a full plane.”

Over the past several years, however, that has all changed. “[Air travel] has become a hassle, even difficult” to undertake. Shatsky described a recent experience where people all around him were complaining about the various hassles of modern air travel; “fundamentally, people just want to be treated with respect.” In the end, it all comes down to making air travel affordable and accessible for the consumer. “We hope people will see the value and the service of what we are offering. The experience we create for our customers is what will ensure our long term viability.”

Additional details about fares, fees, routes, and aircraft are expected at PEX’s upcoming announcement. Stay tuned.

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