PEOPLExpress makes a comeback

Published: 14/02/2012 - Filed under: Home » News »

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True business traveler veterans will remember PEOPLExpress, a no-frills airline that operated from 1981 until 1987, when it merged with Continental.

Twenty-five years after its last flight, the low-cost airline plans to fly again this summer.

Employees of the original PEOPLExpress have spearheaded the start of the new version based out of Newport News, VA with a hopeful hub at Newport News/Williamsburg International Airport. The company’s chief marketing officer, Chrstine DeZarn, and president, Michael Morisi, began putting together the business plan about a year ago and have brought both old and new PEOPLExpress employees in to help.

This time around, the airline will initially only operate very short-haul flights with its Boeing 737 aircraft, which can fly a maximum of two and a half hours. According to an AP report, Morisi feels one of the old airline’s downfalls was overexpansion to big markets such as London and Los Angeles, where there’s a great deal of competition already.

Flights will be going to underserved markets and destinations where no other airlines fly. “What we found is that there are a number of opportunities where there is significant demand and sufficient demand,” said DeZarn. “And we’ve done a lot of research of what lower pricing does to stimulate demand in those markets.”

The airline plans to focus initially on Florida, New England, the Great Lakes and Mid-Atlantic regions. Some of those future services include Pittsburg, PA; Providence, RI; Newark, NJ; West Palm Beach, FL; Orlando, FL; and Boston, MA.

Fares could be as low as $69, and that will include two checked bags, a nearly forgotten concept in domestic airline travel.

“We’re not going to be as no-frills in this new generation,” said DeZarn. “We’ll check two bags for free. We’ll provide seat assignments to everyone.”

The 158-seat aircraft will have one cabin, but more comfortable seats will be toward the front and available for purchase as part of a product aimed at business travelers. “We will bundle a business-focused product that will include with it selection of any seat they’d like as well as priority boarding,” said DeZarn.

DeZarn also promises a new kind of loyalty program, though she won’t reveal any details right now. “You’re going to see something that hasn’t been done before,” she said. “We’ve worked with business travel managers who think this will shake up frequent flyer programs.”

Although no final decisions or commitments have been made, the airline is “definitely considering codeshare opportunities,” said DeZarn.

People have the option of signing up for Club Travelati, which will send members exclusive last-minute fares to specific destinations. “It will be a lower price point, and I expect them to be significantly lower than $69,” said DeZarn.

Currently membership is $19 a year, and that one-year term will begin when the airline flies its first flight.

PEOPLExpress’ employees will be stockholders of the company, which the airline believes will improve service because it will provide employees incentive to want the airline to succeed.

However, the airline’s comeback this summer isn’t fully official yet. It still awaits approval from the FAA and Department of Transportation and needs to secure its final round of financing.

“We’ve secured our first round and are closing out our second round of financing,” said DeZarn. “Our final round of financing has not taken place yet, but that will take place soon, and it’ll be managed by WR Hambrecht + Co.”

The airline has put a great deal of research into the re-launch, and the new founders now have 25 more years of business travel experience that they’re incorporating.

“We’ve done this before, and we know how to do it better today,” said DeZarn. “We think we’ve got a niche to fill, and we’re gonna fill it.”

For more information visit flypex.com, and to read Alex McWhirter's special report on the carrier from back in 1985, click here.

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