People Express files with DOT to launch operations

Washington DC
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People Express has applied to the US Department of Transportation (DOT) to launch operations in the summer, 25 years after the original low-cost carrier brand was taken over by Continental Airlines.

In its application to the DOT today, People Express requested a certificate of public convenience and necessity to engage in interstate scheduled air transportation.

The airline says it aims to begin service in the "summer" of 2012. It has said previously it wants to launch flights in August.

People Express will be based at Newport News/Williamsburg airport and will primarily focus on serving Pittsburgh and Orlando. The carrier plans to "serve markets that either have no nonstop service or have experienced a decrease in service over the past few years as the larger network and low-cost carriers have realigned and consolidated services at their primary hubs", it says in its application.

The carrier believes that its launch will fill a "significant void" at Newport News, as a result of AirTran Airways' decision to drop the airport from its network. "AirTran previously generated over 40% of the airport's enplanements. People Express will initiate nonstop service in many of the markets that AirTran abandoned and will add nonstop service in a number of other [Newport News] markets that currently lack nonstop service," it says.

Explaining its rationale behind targeting Pittsburgh as a focus, the carrier says that the airport has seen a "marked decrease in service" since US Airways moved its East Coast focus to Philadelphia, Charlotte and Washington National.

Its entry into Pittsburgh will "revitalise air transportation options", it adds.

The airline is in the process of acquiring 16 Boeing 737-400s. Earlier this month, the carrier told Flightglobal Pro that it was close to signing a letter of intent with Qantas Airways to buy the aircraft.

People Express will integrate eight aircraft into its fleet in the first year of operations. Seven of these will be operated on scheduled services, while the remaining eighth will be a spare aircraft, it says.

The aircraft will be configured with 150 seats in a single class.

Explaining its business model, People Express says it aims to be "an emblem of low-fare, high quality service innovation" and hopes to stimulate traffic through this approach.

It will offer fares on a three-tiered pricing structure, with the lowest fare at a 60% to 70% discount below the current fare level in each market.

Unlike most low-cost carriers, People Express says it will not charge travellers for the first two pieces of checked luggage, changes to itineraries, and snacks and soft drinks on board.

The airline has raised $5 million in initial capital, which it says will be enough to cover its pre-launch activities. It adds that a "major investment banking firm" has agreed to help it raise the necessary capital for its launch.

People Express' president and chief operating officer Michael Morisi was an employee of the original People Express, which launched service in 1981. It was taken over by Continental Airlines in 1987 after running into financial problems and subsequently merged into Continental's operations.