Lost in the history of the airline industry, PEOPLExpress is now
set to make a comeback. However, this time it is a new airline
carrier reviving the old brand name of PEOPLExpress, which once
operated during 1981-87 as a low-cost carrier, prior to its merger
with Continental Airlines, subsidiary of
United Continental Holdings, Inc.
). PEOPLExpress is now the name for a Virginia-based start-up
carrier that expects to begin operations from the end of June.
Founded in 2012, PEOPLExpress aims to keep up with the legacy of
the brand name, which is considered as the first U.S. carrier to
have introduced the concept of budget flying. Back in the 1980s,
PEOPLExpress had started the concept of low base fares plus an
additional charge for overheads, which is now known as the standard
pricing model for all budget airlines.
According to various reports, the company will begin service
from Newport News Williamsburg International Airport to seven
destinations - New York's Newark, Boston, Pittsburgh, West Palm
Beach, Atlanta, New Orleans and St Petersburg/Clearwater.
Except for Atlanta, served by
Delta Air Lines Inc.
), all the routes will be solely operated by
Due to the pending approval from the Federal Aviation
Administration and DOT, PEOPLExpress will operate through Vision
Airlines for the first one year. The company has leased three
Boeing 150-seat 737 aircraft from Vision Airlines which will also
provide pilots and flight personnel until PEOPLExpress receives all
According to PEOPLExpress' current CEO and President Jeff
Erickson, introductory flight fares will be around $76 each way in
the first month of the service. Tickets are expected to be
available June 4, onwards. However, various reports suggest the
carrier will charge additionally for checked and overhead
Although the company's attempt to tap underserved routes and
replicate the success of the former PEOPLExpress remains
encouraging, in the coming days, we expect it to face significant
competition from popular budget carriers like
JetBlue Airways Corp.
Southwest Airlines Co.
As per reports, the company plans to expand its services in 24
cities within the next 5 years. We believe, at the moment, there is
ample groundwork that needs to be done for PEOPLExpress to achieve
its set target.
With budget flying no longer a novel concept and many airline
companies rooted as established players with top of the line
service, it will likely be immensely difficult for a new entrant to
promote itself on the same philosophy of budget flying with limited
Hence, besides competition, procuring capital investment will be
another roadblock for PEOPLExpress if it plans to strengthen its
presence as a regular passenger carrier. Further, in the current
economy where demand remains significantly volatile and air
carriers are struggling with capacity issues, it will be a
significant challenge for PEOPLExpress to provide optimum service
levels considering operating costs and existing demand trends.
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