Founded - 1981 merged into Continental Airlines 1987
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Home Home / Major / PEOPLExpress / UAL Tree / Files
Fleet Total
727-200 50
737-100 17
737-200 5
747-100 3
747-200 6
Home Home / Major / PEOPLExpress / UAL Tree / Files
People Express Airlines, stylized as PEOPLExpress, also known as People Express Travel, 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.
Founding and rapid expansion
The company was founded Don Burr, 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. 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" 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.
Acquisitions of other airlines
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.
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 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).
Reuse of name
On February 13, 2012, Newport News/Williamsburg International Airport announced the resurrection of the PEOPLExpress brand for a new, start-up airline. Corporate headquarters for the airline will also be located in Newport News.
PeoplExpress Airlines has applied for permission to fly from Pittsburgh, with plans to begin service later this year. It will begin by serving Pittsburgh, Orlando, West Palm Beach, Providence, and Newport News. The paperwork has been filed with the Department of Transportation.
