People Express
People Express has a history that dates back to 1980, when
former president, Donald Burr and several previous key
executives of Texas International Airlines in a joint
venture formed People Express. The carrier based out of
Newark, New Jersey would provide service between New Jersey
and New York and several northeast states. The concept of
this air carrier was to provide air passenger service at the
cheapest airfare possible. To accomplish the feat, the
carrier provide no frills and its labour force was a
non-union workers.
With airline deregulation in
1978, over 170 new air carriers had entered into the airline
market, as did People Express. With the intense competition
from larger airlines, it become difficult for new carriers
to keep their doors open. During this period of time,
analysts were predicting at least a third of the new air
carriers would be able to stay aloft. However, that did not
turn out to be the case, as over 90 percent of these new air
carriers were unsuccessful and force to shut down. This
would include People Express.
With the introduction of
People Express to the airline market, it further eroded the
industry. With its slashed air fares which created airfare
wars throughout the industry and, many air carriers
attempted to go non-union in an effort to maintain their
market share. As a result airfare profits were down and it
had cost the industry over 70 million dollars in the first
nine months of the year. Frank Lorenzo, owner of Texas Air
was a pioneer of such business tactics; slashing airfares
and union busting. On September 15, 1986, People closed its
doors and re-opened as part of Texas Air.
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