PEOPLExpress to make a comeback

PEOPLExpress is best known in most travel circles as one of the first airlines to operate in a LCC model following the deregulation of the US aviation industry. With a hub in Newark, New Jersey, the carrier offered up a slew of a la carte fees well before that was the norm and offered service to a number of cities across the USA and Europe. The company was acquired by Continental in the 80s and the brand disappeared. But now it is back.

A group of entrepreneurs has revived the brand and hopes to begin operations in the near future based out of Newport News, VA (PHF) with a fleet of Boeing 737-400s. The aircraft will be configured with 158 seats in an all-economy configuration. The carrier lists a few destinations in their press release, including Newark, Pittsburgh, West Palm Beach and Providence, with a promise of more to come.

The company’s COO, Mike Morisi is a veteran of the previous PEOPLExpress iteration, giving him a long history in the industry. And he promises that the new operation will change the way the public views air travel:

With the recent decline in airline service due to mergers and consolidations, we have all had to travel farther out of our way to get anywhere. Flights are more expensive and the many ancillary fees make flying a hassle. Our goal is to make flying fun again. We will eliminate most fees for items such as checked bags and seat assignments aboard our fleet of Boeing 737-400 aircraft.

Apparently Morisi doesn’t mind that the exact same line, "make flying fun again," was used just a couple months ago by Virgin America CEO David Cush in describing the goals of his brand.

Morisi also appears to be bringing back many of the hallmarks of PEOPLExpress service, like having a minimal staff at each airport and each employee working in multiple roles. If you buy the corporate spin that "reduces burnout and gives customers access to people knowledgeable in all aspects of the airline." Or it means that there are fewer people around to actually help out when things go wrong, or maybe the ticket agent would have to leave the counter to go load baggage, similar to the recent Allegiant flight where passengers were left behind because the counter had to close for the agent to work another role for the same flight.

Oh, and they are still working on securing both the necessary government approvals to operate as a commercial airline and the start-up funding to begin operations.

There are so many strange things about the announcement that it is hard to know where to begin breaking them down. Perhaps the choice of aircraft is a good place to begin. The 737-400 is a "classic" version of the Boeing jet. It is still in operation all around the world and it is a quite reliable workhorse, but it is also a questionable choice for a start-up carrier. Odds are they’re getting the aircraft at a great price and that’s the reason for the selection. But that bargain comes with a cost: the hourly operating costs of the 737-400 is the highest of the common versions of the type running today:

The numbers are out of date based on the fuel costs but the relative numbers remain so the premise that it is the most expensive holds true. Moreover, the fact that is uses more fuel per hour than other versions of the 737 means that the cost disadvantage has only grown, not gotten better.

And then there is the cabin configuration. US Airways also flies the 737-400, with a configuration of 12 first class seats and 132 coach seats. Those coach seats have a 30" pitch, while the first class cabin has 37" pitch. In order to squeeze in 158 seats the pitch will be somewhere in the bone-crushing range of 28-29" throughout the entire plane. Also, there is the federal requirement that an aircraft be staffed with at least one flight attendant for every 50 seats on the plane. Adding the extra eight seats means that the company also has to add a fourth flight attendant to the crew, increasing their costs of operation.

Also, the initial plans are for only 12 daily departures from Newport News, hopefully scaling up to 25 within a few years. In other words, it is going to be a pretty small operation for the foreseeable future. It is almost hard to believe that they’re going to be able to raise the capital to actually get off the ground. Maybe they’ll do so from the $19 fee they’re asking of folks to join their Club Travelati member-only promotions group.