Apollo13 From , joined Dec 1969, posts, RR: Posted (4 years 3 months 5 days 23 hours ago) and read 7299 times:
Hello everyone.
I am taking a Transportation class at my college "Mt. San Antonio College" and have to write a report comparing and contrasting Southwest Airlines and People Express, discussing why one failed (PE) and why the other succeeded (WN)
Can anyone give my tips as to where to find information on People Express and also what are your opininons on why People Express failed? Did they grrow too fast, was it their involvement with Frontier?
Also, I am reading the book "NUTS" for research for Southwest Airlines and have come across the part where it talks about Southwest using "Secondary AIrport" which doesnt seem to be soo true today. But I am curious as to why Southwest went back to SFO when SFO is somewhat known for delays and Southwest likes to keep its planes in the air as much as possible? Was there a big demand of people wanting it back there as opposed to going across the bay to Oakland or down to San Jose?
EWRandMDW From United States of America, joined Jul 2006, 379 posts, RR: 0 Reply 2, posted (4 years 3 months 5 days 16 hours ago) and read 7085 times:
I miss PEOPLExpress! They were a good carrier which provided ample service from Newark to lots of places in the US and Europe, meaning I wouldn't have to waste time and money going to New York. If you check the youtube videos, you'll see they charged for everything, a la carte, just like AA, UA, etc. do today, but their prices were reasonable and their personnel were all good people.
Atrude777 From United States of America, joined Aug 2003, 5623 posts, RR: 54 Reply 3, posted (4 years 3 months 5 days 15 hours ago) and read 6971 times:
Quoting Apollo13 (Thread starter): Southwest Airlines and have come across the part where it talks about Southwest using "Secondary AIrport"
The book was written around the middle 90's around 96 or 98. So at the time, the statement was true about using secondary airports.
SFO was returned because WN believes they could handle the delays which were not so bad now compared to the last time, just before 9/11, around the time they pulled out. Also the cost of operating at SFO was lowered to WN standards also.
Good Luck!
Alex
Good things come to those who wait, better things come to those who go AFTER it!
IFlyATA From United States of America, joined Dec 2005, 236 posts, RR: 3 Reply 4, posted (4 years 3 months 5 days 14 hours ago) and read 6818 times:
Quoting Apollo13 (Thread starter): Can anyone give my tips as to where to find information on People Express and also what are your opininons on why People Express failed? Did they grrow too fast, was it their involvement with Frontier?
You should really check out the book Hard Landing by Thomas Petzinger, I'm reading it right now and am nearing the end, but it has a LOT of good information on both airlines, and comparisons.
I think PE failed because of three factors:
1. They didn't keep pace with technological advances in the industry. They were using paper reservations, had no computer system tracking their passenger data, and put themselves at an extreme disadvantage to other airlines who had these systems. While they were small, this wasn't really an issue, but once they grew to be one of the nations largest carriers, it became a monumental issue.
2. WN grew slowly and carefully. PE grew quickly and indiscriminately. Donald Burr kept wanting to expand more and more for fear of being left behind by the majors, who were also expanding, so he gobbled up airlines like Frontier, Provincetown-Boston, and Britt Airways...just for the sake of growth (IMO with no real overall strategy involved, with the exception of Frontier, which he hoped would allow him to compete with the major carriers on the transcontinental market).
3. Donald Burr started surrounding himself with "yes-men" -- and it can only go downhill from there. I'm a big fan of Burr and his "precepts" and opinions on how employees can generate additional revenue by their work environment and loving their company -- but for management, that was not always the best way.
(much of which I derived from Hard Landing...which is an excellent read!)
Floorrunner From United States of America, joined Jan 2004, 259 posts, RR: 0 Reply 5, posted (4 years 3 months 5 days 13 hours ago) and read 6805 times:
If you google people express airlines you will get a multitude of sources. Also do a search for both People Express and Southwest right here. You will get a variety of threads of both airlines many of them will have links to other sources of information. There is also a full length story about People Express right on this site.
DCA-ROCguy From United States of America, joined Apr 2000, 4402 posts, RR: 37 Reply 6, posted (4 years 3 months 5 days 9 hours ago) and read 6618 times:
People Express is an often-discussed topic here over the years. The responders above list sources I would also have listed, as well as giving some key points that I don't need to repeat.
Just some small additional points to note. Near the end, People Express also lost focus. For instance, they made an IMO unwise move to add first class to all their flights (they did it on the 747's, and planned to add it to the whole fleet). Their mission in life was to offer low fares, a la carte-priced services, and professional, friendly employees. They did not have a hub competitor (i.e. the reason FL has first class) and did not need the expense of first class. Just as the acquisition of PBA didn't fit them, as IflyATA noted, first class was a diversion as well.
People Express created a market. There was a huge pent-up market for low-fare transporation from the New York market, and in many spoke markets. Up to that point, no one in the USA had created a new mainline airline from scratch and grown it so big so quickly. New York had the base market, and Burr had the idea.
People Express proved that the LCC concept could be done on a large scale; they were brought down by the fatal mistakes noted by IflyATA, not by their idea. With better execution they could still be around--I like the thought of a 738 with their livery. PE also had a Southwest effect, before that phrase existed. At ROC, for instance, our enplanements went up 38 percent in 1985, the year PE entered.
I flew PE once, on a family day trip from ROC to New York in 1985. The service was good and the employees friendly. The EWR North Terminal was overcrowded, but I'm glad I got to see that historic terminal while it was still in use!
BooDog From United States of America, joined Nov 2007, 253 posts, RR: 0 Reply 7, posted (4 years 3 months 5 days 9 hours ago) and read 6566 times:
The main difference between People Express and Southwest was how fast they grew
People Express went from its founding to being the fifth-biggest airline in just four years.
In Southwest's first four years, they went from three aircraft and three cities to five aircraft and four cities.
Southwest has never sought out to be the largest carrier, or leader on any specific route; they set their egos aside and did whatever was necessary to MAKE A PROFIT. Strange, eh?
N702ML From , joined Dec 1969, posts, RR: Reply 8, posted (4 years 3 months 5 days 8 hours ago) and read 6463 times:
Quoting IFlyATA (Reply 4): You should really check out the book Hard Landing by Thomas Petzinger, I'm reading it right now and am nearing the end, but it has a LOT of good information on both airlines, and comparisons.
That, my friend, is an AWESOME book. I have actually read it several times. HIGHLY recommended!
For an idea of how fast People Express grew....check out this chart....
ItalianFlyer From United States of America, joined Nov 2007, 951 posts, RR: 2 Reply 9, posted (4 years 3 months 5 days 8 hours ago) and read 6436 times:
Sounds like an interesting topic and would love to see your final results! I suspect that when you dig into it...you will conclude that the metrics of PEOPLExpress and SWA is like comparing apples and tennis shoes. Everyone has really good points in the above posts...PE really messed up by taking on a very sick Frontier (I) and tweeking its marketing and service levels by introducing First Class, building a commuter network via acquisition and other downright bizarre strategic decisions.
IMHO the secret to WN's success is that they have stayed the course with their basic service model. They have adapted as circumstances dictate (hedges, entering major markets, offering 'premium' options like early boarding) but they have been methodical about their growth and avoided the temptation to be all things to all people. Southwest's product may not be for everyone and it is not indented to be. They know their niche and have stuck to it.
Tango-Bravo From United States of America, joined Jun 2001, 3728 posts, RR: 31 Reply 10, posted (4 years 3 months 5 days 7 hours ago) and read 6361 times:
Quoting BooDog (Reply 7): Southwest has never sought out to be the largest carrier, or leader on any specific route; they set their egos aside and did whatever was necessary to MAKE A PROFIT. Strange, eh?
In the U.S. airline industry, very much out of the ordinary indeed!
Quoting Apollo13 (Thread starter): your opininons on why People Express failed? Did they grrow too fast, was it their involvement with Frontier?
Both of the above. Also, I cannot imagine how the aging secondhand aircraft that comprised 100% of their fleet improved their chances of staying in business.
Quoting IFlyATA (Reply 4): They didn't keep pace with technological advances in the industry. They were using paper reservations, had no computer system tracking their passenger data, and put themselves at an extreme disadvantage to other airlines who had these systems.
Extreme it was... since PeopleExpress did not require ticketing in advance, they began to experience a no-show factor that was off-the-charts. In response, their overbooking numbers on many of their flights were also off-the-charts -- it was not especially uncommon for the number of pax holding reservations to exceed aircraft seating capacity by a factor in excess of 2:1. Even then, a flight overbooked by these numbers might go out half full, with $0.00 revenue having been generated by the no-show bookings. On other occasions (choosing some numbers at random) most of the 300 pax booked for a flight on a 150 pax aircraft would show up and ...well, it could get rather ugly as you might imagine.
The lack of technology (utilized by their competitors) with regards to their reservations and ticketing practices was a no-win "Catch 22" for PE: limit overbooking to ensure minimal denied boarding numbers and see below-breakeven actual load factors on fully booked/overbooked -- in theory -- flights... or overbook to the extent needed to hopefully ensure a breakeven load factor or better and see denied boarding numbers soar... and if there's one thing that an airline can do to drive away pax -- their addiction to cheap fares narcotics notwithstanding -- it is to create serious doubt as to whether their reservation means they will actually have a seat on the flight booked.
LTBEWR From United States of America, joined Jan 2004, 12365 posts, RR: 12 Reply 11, posted (4 years 3 months 5 days 4 hours ago) and read 5890 times:
Don't forget that Southwest started during the regulated time, only in Texas so not subject to Federal fare regulations. That gave them a lot of time to develop their model when deregulation came in. PE started after deregulation started, fighting many other LCC's and massive price cuts by majors where you had their frills of the time majors offered for about the same cheap price as PE.
Another difference between PE and WN is that PE quickly went in to international servcies, WN never has.
PE is somewhat compable to today's Ryanair, especially for charges for food, beverages and checked bags except that Ryanair mainly uses new aircraft while PE used only used a/c, ending up with several different types.
IrishAyes From United States of America, joined Jan 2008, 1768 posts, RR: 5 Reply 12, posted (4 years 3 months 5 days 4 hours ago) and read 5822 times:
Quoting Apollo13 (Thread starter): Also, I am reading the book "NUTS" for research for Southwest Airlines and have come across the part where it talks about Southwest using "Secondary AIrport" which doesnt seem to be soo true today.
While "Nuts!" is indeed a great book, it is a little outdated. Another great book on Southwest that I would recommend reading is called "The Southwest Airlines Way: Using the Power of Relationships to Achieve High Performance" by Jody Hoffer Gittell - it was written in 2003 (so not THAT new) and although it might not address People Express, it still might be a good resource.
Brilondon From Canada, joined Aug 2005, 3274 posts, RR: 1 Reply 13, posted (4 years 3 months 5 days 4 hours ago) and read 5784 times:
Quoting BooDog (Reply 7): Southwest has never sought out to be the largest carrier, or leader on any specific route; they set their egos aside and did whatever was necessary to MAKE A PROFIT. Strange, eh?
Southwest also seemed to have the right management and philosophy from the get go. People Express got greedy and tried to expand too quickly. Their TATL service suffered from the lack of amenities that attracted the business traveler to use them. As well they had to use LGW because of the Bermuda 2 agreement which really hampered their ability to compete with the other airlines flying across the Atlantic.
Quoting BooDog (Reply 7): In Southwest's first four years, they went from three aircraft and three cities to five aircraft and four cities.
Did the Wright amendment also have something to do with this?
Rampart From United States of America, joined Aug 2005, 2871 posts, RR: 7 Reply 14, posted (4 years 3 months 5 days 2 hours ago) and read 5102 times:
Quoting Brilondon (Reply 13): Did the Wright amendment also have something to do with this?
The fact that they were strictly an intrastate carrier regulated by the Texas Aeronautics Commision had something more to do with it. Wright didn't figure until WN also took up Deregulation expansion into neighboring states.
Apollo13 From , joined Dec 1969, posts, RR: Reply 16, posted (4 years 3 months 4 days 23 hours ago) and read 4630 times:
Quoting SJC4Me (Reply 15): Who's your teacher? Mike Tracy?
No I have David Todd
If you had Mike Tracy, how was he as a teacher? I heard some good things about him but my shcedule did not allow me to take his TRAN17 class in the evening.
SJC4Me From United States of America, joined Jul 2006, 366 posts, RR: 1 Reply 17, posted (4 years 3 months 4 days 23 hours ago) and read 4591 times:
Excellent. He was my favorite teacher while I was there.
Mr. Shackelford with weather was the worst. For every 5 minutes of weather he would add 35 minutes of a personal story that had nothing to do with anything.
I'm sure you've had, or will have David West at some point too.
Tango-Bravo From United States of America, joined Jun 2001, 3728 posts, RR: 31 Reply 19, posted (4 years 3 months 4 days 12 hours ago) and read 4379 times:
Quoting Brilondon (Reply 13): Southwest also seemed to have the right management and philosophy from the get go. People Express got greedy and tried to expand too quickly.
Which raises another observation... Whereas Southwest started with a clean sheet of paper (or a napkin as legend has it) in its management philosophy and business plan, from its outset PeopleExpress was founded and managed at the top by staff who brought with them the proverbial baggage of having been steeped in the ways of the legacy airlines.
While Burr and associates no doubt sincerely and fully intended to create a different kind of airline with PE -- which they successfully accomplished in many respects -- as the saying I (think I) invented goes: "you can take a legacy airline executive out of a legacy airline...but you can't take the legacy airline out of a legacy airline executive." As I see it, Burr and associates brought with them too much of the dysfunctional thinking of the legacy airlines from whence they came to make PE a longterm success as "a horse of a different color." (Nor would they have succeeded as "a horse of the same color" IMHO inasmuch as the field of copycat "me too" full-service airlines was already overcrowded.)
Apollo13 From , joined Dec 1969, posts, RR: Reply 20, posted (4 years 3 months 4 days 11 hours ago) and read 4325 times:
Quoting SJC4Me (Reply 17): Mr. Shackelford with weather was the worst. For every 5 minutes of weather he would add 35 minutes of a personal story that had nothing to do with anything.
I have Shackelford. Or "Milton" as i refer him to cause he looks like Milton from "Office Space"
And yes! He goes off tangent about everything. I have him for weather on Mondays from 7-10PM. Last night from 8:30 to 10PM, he talked about the good and bad about ADS-B........
GALLEYSTEW From United States of America, joined Dec 2007, 159 posts, RR: 0 Reply 21, posted (4 years 2 months 3 weeks 6 days 15 hours ago) and read 3977 times:
I don't think SWA is a no frills airline. They just are NOT an airline with First Class offering. I work for a legacy and love flying SWA. I think PEOPLE's was certainly NO FRILLS. Buying everything from your ticket on board to food and drink.
Logos From United States of America, joined Jan 2000, 768 posts, RR: 2 Reply 22, posted (4 years 2 months 3 weeks 6 days 13 hours ago) and read 3845 times:
Quoting Tango-Bravo (Reply 10): Both of the above. Also, I cannot imagine how the aging secondhand aircraft that comprised 100% of their fleet improved their chances of staying in business.
It can work - see Allegiant. When cost of acquisition is low enough, it can pay for a lot of fuel and maintenance. PeopleExpress wasn't operating a fleet that was that much older than anyone else at the time - it had virtually no impact on their demise. The factors mentioned above were the real root causes.
EWRandMDW From United States of America, joined Jul 2006, 379 posts, RR: 0 Reply 23, posted (4 years 2 months 3 weeks 6 days 13 hours ago) and read 3826 times:
One big hit PE took was the strike by air traffic controllers during Reagan's first term. PE's schedule had to be reduced and adjusted to where more flights than usual operated between 10PM and 7AM. The fact that PE had its base in the metro NYC area didn't help matters. At that time both JFK and LGA operated more flights and so got the preferred departure and arrival slots. PE did expand very quickly, acquiring PBA, Britt Airways and the original Frontier, but maybe they felt they had to to remain competitive.
They were no frills to be sure, but I did really love flying with them.
As for WN, they are now my favorite airline. In fact I just flew with them to/from PHL. Service is very good, seating is comfortable with good legroom, and the fare was easily competitive with US, UA and AA. Unlike PE, where it was understood you would pay extra for baggage check-in, drinks, food, etc, WN doesn't nickle and dime the passenger to death.
ItalianFlyer From United States of America, joined Nov 2007, 951 posts, RR: 2 Reply 24, posted (4 years 2 months 3 weeks 6 days 12 hours ago) and read 3784 times:
Quoting EWRandMDW (Reply 23): WN doesn't nickle and dime the passenger to death.
AMEN!!! I think they would have jumped onto the "unbundled" travel experience like everyone else but my guess is that they realized the cost of accounting for ancillary revenue vs. the actual revenue generated makes it a zero sum game that costs more in ill-will with your customers.
I do not know if this is true, but from what I heard, PE crews would divide up what they sold on any given day and that was their 'per diem'. If true, this kind of system would have been a nightmare from a purchasing and provisioning standpoint and could not have helped the bottom line.
FlyASAGuy2005 From United States of America, joined Sep 2007, 6540 posts, RR: 11 Reply 25, posted (4 years 2 months 3 weeks 6 days 4 hours ago) and read 3539 times:
And while we're on the subject of nostalgia, here's an excellent slideshow I found a couple years ago and kept the link. It is quite touching and PEOPLExpress is in there also.
Sponsor Message: 
From , joined Dec 1969, posts, 
(much of which I derived from Hard Landing...which is an excellent read!)
PE also had a Southwest effect, before that phrase existed. At ROC, for instance, our enplanements went up 38 percent in 1985, the year PE entered.
From Canada, joined Aug 2005, 3274 posts, 
Printer friendly format 
