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jumbojim747
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People Express How Did It Go Under After 2 Years?

Sun Feb 20, 2005 10:05 pm

I was speaking to a couple of mates and was interested in the topic .
It happened to be (people express )
They where saying all sorts of things like in the 2 years they had 747 and 737
They couldn't answer 1 question I put forward how does such a fast growing airline go bust just after 2 years and was still growing at the time.
What happened to them after this where they bought or just vanished any help would be appreciated
On a wing and a prayer
 
Ndebele
Posts: 2847
Joined: Mon Apr 09, 2001 3:16 am

RE: People Express How Did It Go Under After 2 Yea

Sun Feb 20, 2005 10:22 pm

Well they stayed in the business a little longer than 2 years. They started in 1981 with B737-100s. B747s and I think also B727s followed in 1983. They were bought by / merged with Continental in February 1987.


Edit: The photo database confirms that PeoplExpress indeed operated several 727-200s, and even at least one 737-200s.

[Edited 2005-02-20 14:29:40]
 
ltbewr
Posts: 12388
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RE: People Express How Did It Go Under After 2 Years?

Sun Feb 20, 2005 10:33 pm

If you go to the 'Articles' section on the main page there is an article, "The Rise and Fall of PEOPLExpress", that will give you a very good idea of what caused this innovative airline to fail. There are also some websites that also discuss PE as it became to be an example of a company used in Business MBA programs.
There failure was due to a number of issues including pricing competition from legacies, their takeover of the original Frontier Airlines, management weaknesses, growing too fast too soon, overbooking/reservations systems weaknesses and many other things. The 747's were mainly used on trancon (EWR-SFO, EWR-LAX) and international services (EWR-LGW, EWR-BRU). They also owned a New England/Boston based airline that operated DC-3's to regional islands (Nantucket for example). Most of there fleet, the 737's and 727's came from Euro based airlines like LH and AZ. I did take this airline in their early days round trip West Palm Beach, FL, DCA-EWR, and round trip, EWR-BRU. Many of the ideas such as charging for food, beverages, paying a checked baggage fee were done by them. There are a number of pictures of PE aircraft in the picture database.
 
N62NA
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RE: People Express How Did It Go Under After 2 Years?

Sun Feb 20, 2005 11:48 pm

PE, ah what an interesting airline!

I was fortunate enough to fly them dozens of times EWR-SYR-EWR while attending Syracuse University. Also experienced a LAX-EWR transcon on them just prior to the CO takeover.

With the exception of those DC-3s of that other airline they owned, I had the good luck to fly on each of their aircraft types: 737-100, 737,200, 727-200, 747-200.

Just wish I had taken some more photos of those PE planes back then!
 
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jumbojim747
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RE: People Express How Did It Go Under After 2 Years?

Mon Feb 21, 2005 6:11 am

Ndebele,LTBEWR,N62NA,
Thanks for the replies i didn't know that article was there i will now go and find it .
All the help was appreciated
On a wing and a prayer
 
Cactus739
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RE: People Express How Did It Go Under After 2 Years?

Mon Feb 21, 2005 7:23 am

You can't fix stupid.... - Ron White
 
isitsafenow
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RE: People Express How Did It Go Under After 2 Yea

Mon Feb 21, 2005 7:43 am

As explained to me in a late-in-life econ class by the prof, Peoples Express failed because they could not deliver. They had the passengers and took full page ads in the NYC newspapers asking people to show up three hours before their flight was to leave. Enhanced security had nothing to do with the early arrival. They just had too many people to process. The equipment mix had na-da to do with their demise as did Frank Lorenzo. Peoples was headed south before Texas Air entered the picture. As also explained by the prof he added, have you ever had Dominos Pizza? Was it the best you ever had? Was it the cheapest you ever had?
If you answered no, then why are they successful....because they deliver, thats why.....Peoples could not? Not enough seats or people(help) to assist, so everyone went back to the carriers they came from. They didn't like the hassle at EWR....which is pretty much like most airports today. LOL
If I remember right, Peoples Express was first American business to go from zero to one billion dollars in sales in the shortest amount of time.
safe
If two people agree on EVERYTHING, then one isn't necessary.
 
N62NA
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Joined: Sun Aug 10, 2003 1:05 am

RE: People Express How Did It Go Under After 2 Years?

Mon Feb 21, 2005 11:31 am

Quoting Isitsafenow (reply 6):
Peoples Express failed because they could not deliver.


Just for the record, it's People Express. The name on the planes was painted on as PEOPLExpress.
 
isitsafenow
Posts: 3413
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RE: People Express How Did It Go Under After 2 Years?

Mon Feb 21, 2005 11:40 am

N62NA....thankyouverymuch
Lets review....People Express People Express People Express People Express.....
there..I feel better now.

safe
If two people agree on EVERYTHING, then one isn't necessary.
 
alb222
Posts: 217
Joined: Thu Jan 27, 2005 9:16 am

RE: People Express How Did It Go Under After 2 Years?

Mon Feb 21, 2005 11:58 am

What killed PeoplEXPRESS was their buyout of Frontier Airlines. Don Burr made a colassol error in that purchse. From a moneymaker, People went into the red bigtime. United wanted to buy only the Frontier part. But Frank Lorenzo of Let's Destroy Another Airline purchased PeoplEXPRESS in 1987 and merged it with Continental, thus CO's large EWR presence.
People was the WN of the time. Cheap fares and buy everything including paying for checked baggage. The other thing that hurt PeoplEXPRESS was the airtraffic controller strike. Many flights had to be cut and the beginning of the end started. If Burr had not bought Frontier who knows what would have happened.

[Edited 2005-02-21 03:58:46]
 
N62NA
Posts: 4006
Joined: Sun Aug 10, 2003 1:05 am

RE: People Express How Did It Go Under After 2 Years?

Mon Feb 21, 2005 12:24 pm

Quoting Isitsafenow (reply 8):
I feel better now.


Good!  Smile/happy/getting dizzy
 
Jeff G
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RE: People Express How Did It Go Under After 2 Years?

Mon Feb 21, 2005 1:11 pm

The other thing that hurt PeoplEXPRESS was the airtraffic controller strike. Many flights had to be cut and the beginning of the end started.

If that's true, then PE never had a chance. The controller's strike was in 1981, the same year PE started.

And PE had significant operational problems before Frontier was even a twinkle in PE's eye. They were getting destroyed by yield management strategies of other airlines and inventory management was non existent. They had some good ideas, but follow-through and competent day to day management was hard to come by.
 
DfwRevolution
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RE: People Express How Did It Go Under After 2 Years?

Mon Feb 21, 2005 1:28 pm

Quoting Alb222 (reply 9):
People was the WN of the time. Cheap fares and buy everything including paying for checked baggage.


PE was a WN bastardization on steroids.... RyanAir ammenities plus a turbocharged protestant work-ethic. Some of their employee structures were revolutionary, including specific rewards/compensation for hard-working and efficent "cells" of workers... but it really didn't pan out-

http://airtransportbiz.free.fr/Airlines/PEOPLExpress.html
 
nosedive
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RE: People Express How Did It Go Under After 2 Years?

Mon Feb 21, 2005 5:25 pm

I'm wondering, did People Express ever have any plans to fully merge Frontier I into the system? I guess what I'm asking is if People Express hung around to say 1990, would I see Frontier I planes parked at DEN or People Express planes parked at DEN?
 
alb222
Posts: 217
Joined: Thu Jan 27, 2005 9:16 am

RE: People Express How Did It Go Under After 2 Years?

Tue Feb 22, 2005 1:14 am

Quoting Jeff G (reply 11):
And PE had significant operational problems before Frontier was even a twinkle in PE's eye. They were getting destroyed by yield management strategies of other airlines and inventory management was non existent. They had some good ideas, but follow-through and competent day to day management was hard to come by.


Absolutely true. PEOPLExpress had no computer system and would overbook every flight. They attempted to get a computer system around 1983, but to no avail. People's Distress is what the airline became known as.

Quoting Jeff G (reply 11):
If that's true, then PE never had a chance. The controller's strike was in 1981, the same year PE started


People started in 4/81, the controller's strike was in August. People needed to fly a lot of flights to each destination to make money. Their flights were cut due to ATC constraints...............went from profit to loss.

Other problems: their terminal, the old North at EWR was terrible. Like others, expansion killed them or put the final nail in the coffin.

I remember well their EWR-LGW flights for $79/$99. Passengers used to sleep at EWR to get on these flights.
 
Tango-Bravo
Posts: 2887
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RE: People Express How Did It Go Under After 2 Years?

Tue Feb 22, 2005 1:42 am

Quoting JumboJim747 (reply 0):
They couldn't answer 1 question I put forward how does such a fast growing airline go bust just after 2 years and was still growing at the time.


Such an airline, namely People Express, went bust in spite of their rapid growth and popularity (based solely on low fares) because, bottom line, their business plan was exactly the opposite of Southwest's plan which Herb Kelleher once succinctly stated (paraphrase): "from the beginning we have never attempted to make a profit and grow our airline on the backs of our employees and by operating old airplanes."

People Express was all about building its fleet with old aircraft purchased second-hand from a hodge-podge of different airlines. And they depended from the beginning on employees making fast-food wages; it didn't take long for the "rah-rah" and glamor of "working for an airline" to wear off once employees figured out that the airline was being built on their backs.

The acquisition of Frontier only hastened the demise of People Express.
 
Spike
Posts: 1110
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RE: People Express How Did It Go Under After 2 Years?

Tue Feb 22, 2005 2:01 am

So, whilst the rest od the world can make money by heapinmg a bunch of hodge podge people in a metal tube the USA can't? American management...
 
N312RC
Posts: 2584
Joined: Mon Aug 28, 2000 10:58 am

RE: People Express How Did It Go Under After 2 Years?

Tue Feb 22, 2005 2:20 am

Anybody else think the above post was a dumb comment?
N/A
 
Spike
Posts: 1110
Joined: Wed Feb 25, 2004 1:08 am

RE: People Express How Did It Go Under After 2 Years?

Tue Feb 22, 2005 2:22 am

Yes! Its a dumb comment but statiscaly its true.
 
Type-Rated
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Joined: Sun Sep 19, 1999 5:18 am

RE: People Express How Did It Go Under After 2 Years?

Tue Feb 22, 2005 2:51 am

Didn't PeoplExpress also have a "job sharing" program where you would work one day a week or so at the ticket desk, the next day as a gate agent, the next day as an airplane cleaner? I think they even had their pilots working dispatch on the days they weren't flying.
A freind of mine who couldn't find a flying job took a ticketing job with PeopleExpress and after being there a few months he mentioned to his supervisor that he was also an ex-military pilot. A month later he was put in 737 school. After People folded he hired on to fly with CO where he still is today!
Fly North Central Airlines..The route of the Northliners!
 
RDUCO
Posts: 40
Joined: Tue Feb 22, 2005 4:17 pm

RE: People Express How Did It Go Under After 2 Years?

Tue Feb 22, 2005 6:32 pm

Peoples (that's for N62NA) had a lot of good ideas. Hiring from the college campus was a great way to find a young, energetic, and inexperienced group of people they could mold. D Burr understood that to survive in a extremely competitive marketplace you need to keep cost low and develop with critical mass. The merger was needed, however perhaps not with an airline that was too debt heavy. The biggest problem PE had was revenue management. In the end, that is what killed them.
for the alliance
 
airfrnt
Posts: 2002
Joined: Fri Jul 02, 2004 2:05 am

RE: People Express How Did It Go Under After 2 Years?

Wed Feb 23, 2005 6:24 am

Variable Pricing also had a huge effect. Check out the Book Hard Landing for more details, but in a nutshell, when the majors started variable pricing seats depending on the type of consumer, they increased there own profitability significantly. Burr misunderestimated what was going on and tried to add more capacity to routes that they where actually being underbid on. This created a excess of large planes flying between EWR and DEN that were mostly empty.

This all falls into the category of IT management. Once the majors started pricing more efficently, it gave them the ability to target other carriers. PE was the first (but definitly not the last) to die.

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