Prospective start-up People Express Airlines laid off six staffers in recent days and has struggled to pay bills as the carrier seeks funding to launch a low-cost operation from Newport News/Williamsburg International airport in Virginia.
Six "nonessential" employees were cut from the payroll last week and five vice presidents were notified that they will not be paid, according to a report from Newport News media outlet Daily Press.
Those vice presidents have agreed to continue working without pay, reports the Daily Press.
People Express and the Newport News/Williamsburg airport did not immediately respond to a request from Flightglobal for more information.
The company's president Michael Morisi says the layoffs will enable the company "to focus on the final stages of funding and developing our long-term objectives," according to a letter obtained by the Daily Press.
Morisi added that Headwaters MB, a Denver-based investment bank, is expected to provide funding to the company within weeks.
In addition to layoffs, the airline has failed to pay federal taxes for two periods ending last year and has been sued by American Express Travel Related Services, which seeks money it says the company owes from use of corporate credit cards, according to reports.
People Express announced the Headwaters funding in July, but neither the airline or the bank commented on the deal.
In June, People Express received an operating certificate with the purchase of Idaho-based charter airline Xtra Airways, which operates a fleet of five Boeing 737-400s, according to Flightglobal's Ascend Online database.
Morisi told Flightglobal on 7 June that the airline intended to outline potential routes and a launch date in documents it would file with the US Department of Transportation (DOT) in the coming weeks.
The airline has not yet filed those documents, according to government databases.
In May, DOT assessed People Express a $10,000 civil fine for selling memberships to its "Club Travelati" before it received authority to provide air transportation.
People Express has said it plans to fly from Newport News/Williamsburg to Orlando, Pittsburgh, West Palm Beach and Providence.