Peoplexpress Airlines
Encyclopedia
People Express Airlines, stylized as PEOPLExpress, also known as People Express Travel, was a U.S. no-frills 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
.
, Samuel Leong Ken Yung, Gerry Gitner 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
long-abandoned North Terminal.
People Express (PEx) was launched on April 30, 1981 with service from Newark
to Buffalo, Columbus
, and Norfolk, Virginia
. People Express grew rapidly, adding flights to Florida
by the end of the year.
On May 26, 1983, People Express began non-stop service from Newark
to London's Gatwick Airport
with a leased Boeing 747-227B
previously operated by Braniff International Airways
. Flights were initially priced at $149 each way. The airline became an instant success with all flights sold out for several months within 24 hours of being offered. Later, the airline added Montréal-Mirabel
and Brussels
to their international network.
The airline used a simplified fare structure. All seats on a given route were offered at the same price, with slight differences between "peak" and "off-peak" fares. All seats were in economy class, with the exception of "Premium Class" seating 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, while each checked bag cost a fee of $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.
In 1985 People Express bought out Denver
-based Frontier Airlines
. The combined company became the United States'
fifth largest airline, with flights to most major U.S. cities, as well as a transatlantic route to Brussels
. During this period, People Express also purchased midwest commuter carrier Britt Airways
and Provincetown-Boston Airlines
(PBA), a regional airline with route networks in New England and Florida.
The aggressive 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 on 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 travellers who were willing to pay higher fares. Aircraft cabins were redesigned to include a first-class cabin, a frequent flyer plan was initiated, and the simplified fare structure was abandoned in favor of a more traditional airline industry "revenue management
" pricing scheme.
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 its unions on how to incorporate Frontier's staff, leading People Express management to cease Frontier's operations and file the subsidiary for bankruptcy protection.
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 its 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
).
.
used the former terminal as a transfer point for casualties in the Gulf War
. In 1997 a project to demolish the North Terminal and redevelop the land was underway, with a cost of $50.1 million.
Low-cost carrier
A low-cost carrier or low-cost airline is an airline that generally has lower fares and fewer comforts...
that operated from 1981 to 1987, when it merged into Continental Airlines
Continental Airlines
Continental Airlines was a major American airline now merged with United Airlines. On May 3, 2010, Continental Airlines, Inc. and UAL, Inc. announced a merger via a stock swap, and on October 1, 2010, the merger closed and UAL changed its name to United Continental Holdings, Inc...
. The airline's headquarters was in the North Terminal of Newark International Airport in Newark, New Jersey
Newark, New Jersey
Newark is the largest city in the American state of New Jersey, and the seat of Essex County. As of the 2010 United States Census, Newark had a population of 277,140, maintaining its status as the largest municipality in New Jersey. It is the 68th largest city in the U.S...
.
History
The company was founded by Don BurrDon Burr
Donald C. Burr is a former airline executive and former CEO of now-defunct PEOPLExpress Airlines in the United States.He was a graduate of Stanford University and received an M.B.A. degree from Harvard Business School.-References:...
, Samuel Leong Ken Yung, Gerry Gitner and several others, who resigned from Frank Lorenzo's
Frank Lorenzo
Francisco Anthony "Frank" Lorenzo is an American businessman and philanthropist. He is most famous for his leadership of Texas International Airlines and its successor holding company Texas Air Corporation between 1972 and 1990, through which he formed or acquired a number of major U.S...
Texas International in order to do so. Burr was influenced by British airline entrepreneur Freddie Laker
Freddie Laker
Sir Frederick Alfred Laker was a British airline entrepreneur, best known for founding Laker Airways in 1966, which went bankrupt in 1982...
, whose forays into low-cost air travel attracted much press in the 1970s. Terminal space was leased at Newark Airport's
Newark Liberty International Airport
Newark Liberty International Airport , first named Newark Metropolitan Airport and later Newark International Airport, is an international airport within the city limits of both Newark and Elizabeth, New Jersey, United States...
long-abandoned North Terminal.
Newark Liberty International Airport
Newark Liberty International Airport , first named Newark Metropolitan Airport and later Newark International Airport, is an international airport within the city limits of both Newark and Elizabeth, New Jersey, United States...
to Buffalo, Columbus
Port Columbus International Airport
Port Columbus International Airport , commonly shortened to Port Columbus, is a Class C international airport located east of downtown Columbus, Ohio, USA. It is managed by the Columbus Regional Airport Authority, which also oversees operations at Rickenbacker International Airport and Bolton Field...
, and Norfolk, Virginia
Norfolk International Airport
-Baggage Claims:Southwest Airlines #1,Delta Airlines #2,US Airways | American Airlines #3,Continental Airlines|United Express #5- Facilities and aircraft :...
. People Express grew rapidly, adding flights to Florida
Florida
Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
by the end of the year.
On May 26, 1983, People Express began non-stop service from Newark
Newark Liberty International Airport
Newark Liberty International Airport , first named Newark Metropolitan Airport and later Newark International Airport, is an international airport within the city limits of both Newark and Elizabeth, New Jersey, United States...
to London's Gatwick Airport
London Gatwick Airport
Gatwick Airport is located 3.1 miles north of the centre of Crawley, West Sussex, and south of Central London. Previously known as London Gatwick,In 2010, the name changed from London Gatwick Airport to Gatwick Airport...
with a leased Boeing 747-227B
Boeing 747
The Boeing 747 is a wide-body commercial airliner and cargo transport, often referred to by its original nickname, Jumbo Jet, or Queen of the Skies. It is among the world's most recognizable aircraft, and was the first wide-body ever produced...
previously operated by Braniff International Airways
Braniff International Airways
Braniff International Airways was an American airline that operated from 1928 until 1982, primarily in the midwestern and southwestern U.S., South America, Panama, and in its later years also Asia and Europe...
. Flights were initially priced at $149 each way. The airline became an instant success with all flights sold out for several months within 24 hours of being offered. Later, the airline added Montréal-Mirabel
Montréal-Mirabel International Airport
Montréal-Mirabel International Airport, originally called Montréal International Airport and widely known simply as Mirabel is an airport located in Mirabel, Quebec, Canada, northwest of Montreal and was opened October 4, 1975...
and Brussels
Brussels Airport
Brussels Airport is an international airport northeast of Brussels, Belgium. The airport is partially in Zaventem and partially in the Diegem area of Machelen, both located in the Flemish Region of Belgium.Brussels Airport currently consists of 54 contact gates, and a total of 109 gates...
to their international network.
The airline used a simplified fare structure. All seats on a given route were offered at the same price, with slight differences between "peak" and "off-peak" fares. All seats were in economy class, with the exception of "Premium Class" seating 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, while each checked bag cost a fee of $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.
In 1985 People Express bought out Denver
Denver, Colorado
The City and County of Denver is the capital and the most populous city of the U.S. state of Colorado. Denver is a consolidated city-county, located in the South Platte River Valley on the western edge of the High Plains just east of the Front Range of the Rocky Mountains...
-based Frontier Airlines
Frontier Airlines (1950-1986)
Frontier Airlines was formed from a merger of Arizona Airways, Challenger Airlines, and Monarch Airlines on June 1, 1950. They established their headquarters at Stapleton Airport in Denver. However, the airline dated itself to November 27, 1946, when Monarch Airlines began service in Colorado,...
. The combined company became the United States'
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
fifth largest airline, with flights to most major U.S. cities, as well as a transatlantic route to Brussels
Brussels
Brussels , officially the Brussels Region or Brussels-Capital Region , is the capital of Belgium and the de facto capital of the European Union...
. During this period, People Express also purchased midwest commuter carrier Britt Airways
Britt Airways
Britt Airways was a United States commuter airline based in Terre Haute, Indiana.In 1985, the founder and owner of Britt Airways, Bill Britt, sold the airline to People Express. Frank Lorenzo's holding company, Texas Air Corporation, acquired People Express, following Texas Air's acquisition of...
and Provincetown-Boston Airlines
Provincetown-Boston Airlines
Provincetown-Boston Airline , or better known as PBA, was an airline that operated between 1949 and 1989. The airline operated a route network in New England, New York, Pennsylvania, and Florida, and at one time was the largest commuter airline in the United States before its purchase by People...
(PBA), a regional airline with route networks in New England and Florida.
The aggressive purchasing spree placed an enormous debt burden on the carrier at the same time major legacy carriers' improved yield management
Yield management
Revenue management is the process of understanding, anticipating and influencing consumer behavior in order to maximize yield or profits from a fixed, perishable resource...
schemes enabled them to better compete with People Express on 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 travellers who were willing to pay higher fares. Aircraft cabins were redesigned to include a first-class cabin, a frequent flyer plan was initiated, and the simplified fare structure was abandoned in favor of a more traditional airline industry "revenue management
Revenue management
Revenue Management is the application of disciplined analytics that predict consumer behavior at the micro-market level and optimize product availability and price to maximize revenue growth. The primary aim of Revenue Management is selling the right product to the right customer at the right time...
" pricing scheme.
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
United Airlines
United Air Lines, Inc., is the world's largest airline with 86,852 employees United Air Lines, Inc., is the world's largest airline with 86,852 employees United Air Lines, Inc., is the world's largest airline with 86,852 employees (which includes the entire holding company United Continental...
fell through due to the inability of United to agree to terms with its unions on how to incorporate Frontier's staff, leading People Express management to cease Frontier's operations and file the subsidiary for bankruptcy protection.
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 its operations were merged into the operations of Continental Airlines
Continental Airlines
Continental Airlines was a major American airline now merged with United Airlines. On May 3, 2010, Continental Airlines, Inc. and UAL, Inc. announced a merger via a stock swap, and on October 1, 2010, the merger closed and UAL changed its name to United Continental Holdings, Inc...
, 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
Eastern bloc
The term Eastern Bloc or Communist Bloc refers to the former communist states of Eastern and Central Europe, generally the Soviet Union and the countries of the Warsaw Pact...
countries during the Cold War
Cold War
The Cold War was the continuing state from roughly 1946 to 1991 of political conflict, military tension, proxy wars, and economic competition between the Communist World—primarily the Soviet Union and its satellite states and allies—and the powers of the Western world, primarily the United States...
).
Fleet
This was the fleet at the time of People Express's buy out from Continental AirlinesContinental Airlines
Continental Airlines was a major American airline now merged with United Airlines. On May 3, 2010, Continental Airlines, Inc. and UAL, Inc. announced a merger via a stock swap, and on October 1, 2010, the merger closed and UAL changed its name to United Continental Holdings, Inc...
.
| Aircraft | Total | Passengers (First/Economy) |
Notes |
|---|---|---|---|
| Boeing 727-200 | 50 | 185 | Bought from Delta Air Lines Delta Air Lines Delta Air Lines, Inc. is a major airline based in the United States and headquartered in Atlanta, Georgia. The airline operates an extensive domestic and international network serving all continents except Antarctica. Delta and its subsidiaries operate over 4,000 flights every day... , Braniff, Alitalia Alitalia Alitalia - Linee Aeree Italiane S.p.A. , in its later stages known as Alitalia - Linee Aeree Italiane S.p.A. in Extraordinary Administration, was the former Italian flag carrier... |
| Boeing 737-100 | 17 | 118 | Bought from Lufthansa Lufthansa Deutsche Lufthansa AG is the flag carrier of Germany and the largest airline in Europe in terms of overall passengers carried. The name of the company is derived from Luft , and Hansa .The airline is the world's fourth-largest airline in terms of overall passengers carried, operating... |
| Boeing 737-200 | 5 | 130 | Bought from Canadian Pacific Airlines Canadian Pacific Airlines Canadian Pacific Air Lines was a Canadian airline that operated from 1942 to 1987. It operated under the name CP Air from 1968 to 1986... |
| Boeing 747-100 | 3 | 435 | Bought from Alitalia Alitalia Alitalia - Linee Aeree Italiane S.p.A. , in its later stages known as Alitalia - Linee Aeree Italiane S.p.A. in Extraordinary Administration, was the former Italian flag carrier... |
| Boeing 747-200 | 6 | 435 | Bought from Braniff, Alitalia Alitalia Alitalia - Linee Aeree Italiane S.p.A. , in its later stages known as Alitalia - Linee Aeree Italiane S.p.A. in Extraordinary Administration, was the former Italian flag carrier... , Qantas Qantas Qantas Airways Limited is the flag carrier of Australia. The name was originally "QANTAS", an initialism for "Queensland and Northern Territory Aerial Services". Nicknamed "The Flying Kangaroo", the airline is based in Sydney, with its main hub at Sydney Airport... |
Headquarters
The PeopleExpress headquarters were on the grounds of Newark International Airport. The headquarters offices, described by the Miami Herald as "a maze-like bevy of small offices," were in an attic, located on the second floor of the North Terminal. The North Terminal first opened in 1953. Before the arrival of PeopleExpress, the terminal was largely unused, while it had some charter flights departing and arriving there. After the end of PeopleExpress, the Department of Veterans AffairsDepartment of Veterans Affairs
Department of Veterans Affairs may refer to:*Department of Veterans' Affairs, Australia*United States Department of Veterans Affairs*Veterans Affairs Canada*Ministry of Patriots' and Veterans' Affairs...
used the former terminal as a transfer point for casualties in the Gulf War
Gulf War
The Persian Gulf War , commonly referred to as simply the Gulf War, was a war waged by a U.N.-authorized coalition force from 34 nations led by the United States, against Iraq in response to Iraq's invasion and annexation of Kuwait.The war is also known under other names, such as the First Gulf...
. In 1997 a project to demolish the North Terminal and redevelop the land was underway, with a cost of $50.1 million.
External links
- The Airchive-People Express Timetables
- People Express' Model T
- Aviation Safety Network - People Express
- Remember PEOPLExpress?, The Article Writer, January 16, 2006
- The Rise and Fall of PEOPLExpress, Eric Kochneff, August 2004
- CP Air 737
- People Express Management Flight Simulator by Prof. John Sterman, MIT
- Airlinecolors.com Images, historical notes, and promotional materials
