People Express Airlines begins service to Baltimore/Washington International Airport on Wednesday.
In business since April, the airline represents a variation on the theme of the new low-cost, high-frequency airlines that are springing up as a result of the new freedoms offered entrepreneurs by the Airline Deregulation Act. With People Express:
There are no ticket counters. Passengers can make reservations by telephone but go directly to the gate for a boarding pass when they get to the airport.
Tickets are pruchased on board the plane during the flight, as on Eastern's Air-Shuttle. Although they can be purchased from participating travel agents, People Express will mail no tickets to the passenger, nor will their travel agents book you a car rental or a hotel room or tell you what the weather is in the destination city. r
No food is provided passengers on board flights, although beverages are available. All of the airline's flights are within 1,000 miles, or two hours, of Newark. a
There is no free baggage check; passengers are encouraged to carry their own. The planes are equipped with oversized overhead luggage compartments and the seat bottoms are higher off the floor than standard airline seats to provide more space under the seat for carry-on bags. Passengers can check luggage for an extra $3 per bag.
The airline, organized by five former officials of Texas International Airlines, is different from other airlines in some other ways as well. For instance, it won't carry cargo or mail on the grounds that those chores would take extra time to load and unload, would require additional employes and generally take away from its central purpose: offering travelers high-frequency, low-fare air service between cities.
The proof of the pudding is in the eating, the old saying goes, and in this case it is in the flying. By removing those "unwanted frills," as People Express officials refer to them, the airline will start service Wednesday with regular one-way fare of $35 between BWI and Newark on weekday flights departing before 7 p.m. The one-way fare on flights departing after 7 p.m. weekdays and on all flights on Saturdays and Sundays is $23. These are everyday fares; they require no advance purchase nor do they require minimum or maximum stays.
Until the People Express entry, the standard fare for nonstop flights to New York or Newark from the D.C. area ranged generally between $59 and $79 with a $49-$29 two-tier combination on New York Air.
The frequent, quick turnaround and low-cost, two-tier pricing system was made respectable and profitable by Texas-based Southwest Airlines, which undercut its old-line competition beginning 10 years ago, competition including Texas International. "We like to think of ourselves as having gone to Southwest University," says People Express managing officer Harold J. Pareti.
"The prices are designed to bring the 'safa market' into the air transportation system," the people who aren't flying now but are sitting on their sofas, he says.
It's working, say Pareti and People Express Chairman Donald C. Burr. During their first month of operation, they flew 52,000 passengers, filling a total of 51.6 percent of their seats, a more-than-respectable showing for a new airline."It's nice to get confirmation that what you thought made sense does make sense," Burr said in an interview in his office.
Besides the service concept, one thing was Newark. "A lot of people said that Newark wasn't an airport you could fly out of [profitably]," he said. "Clearly, Newark is not an impediment" although it was and continues to be somewhat of "a psychological problem," he admits.
As a result, People Express has sought to capitalize on Newark's strengths in its advertising, noting for instance that "everybody flies Kennedy and LaGuardia" to New York. "That's the beauty of Newark." Another pitch is directed to business travelers: "Spend less time at the airport and more time at the meeting."
People also heavily promotes the easy and cheap ground transportation from Newark to Manhattan, using some of its advertising space to tout the busses that shuttle between the airport and midtown Manhattan every 15 minutes on the average for as little as $1.75.
According to Pareti, People Express considered coming to Dulles International Airport, but picked BWI instead. "What convinced us to start at BWI was the good access" to both the D.C. and Baltimore metropolitan areas, he said. "Also, the flight time from BWI to Newark was 15 minutes shorter," he added.
The airline had a successful stock offering last November, raising $25.5 million with a new issue of 3 million shares of stock at $8.50 each.Traded over-the-counter, the stock was in the $14 range last week.