People Express is aiming to raise at least $50 million in capital in a public offering prior to the airline's launch in August.
The initial funding for the venture, which totals some $5 million to date, has mainly come from wealthy private individuals that have backed the People Express business plan, Michael Morisi, president told Flightglobal Pro at the Airline Business Network USA event in Tampa.
The bulk of the money for the start-up will be raised in an initial public offering managed by New York investment firm WR Hambrecht & Co. The amount of the IPO could be increased to $75 million if there is market interest. "It would be nice to have the additional capital," says Morisi.
Morisi recognises that it is a tough time to launch an airline and that there are those sceptical about the chances of getting the project off the ground.
"What I say is that Hambrecht are very successful in using an open auction IPO process to raise funds," says Morisi. "They didn't sign on to fail and have done a lot of due diligence on this project."
The airline's business plan has it making just under $100 million in revenue in its first full year of operation.
It will fly on under-served routes from Newport News-Williamsburg International Airport using low fares to stimulate traffic, says Morisi.
People Express is about half way through the DOT and FAA regulatory approval process. The target of beginning service in August is ambitious but achievable, says Morisi.