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New low-cost airline, PEOPLExpress, to launch in June

People Express Airlines is back

PEOPLExpress, a new airline reviving the name of 1980s low-cost airline, will begin service in June on routes that have been left behind by the bigger airlines as they consolidate service, CEO Jeff Erickson told CNBC on Friday.

Starting June 30, PEOPLExpress will begin service from its Newport News/Williamsburg, Virginia, hub with one round-trip flight daily to Pittsburgh and one to Boston, and two daily to Newark, New Jersey. Additional flights from the hub will be added through the summer: West Palm Beach, Florida (from July 15); Atlanta (from Aug. 1); and New Orleans and St Petersburg/Clearwater, Florida, (from Aug. 28.).

The goal is to focus on underserved routes. "With the exception of the service from here to Atlanta—which starts Aug. 1—everything else has no nonstop competition," Erickson said during a phone interview from Virginia.

Within five years it hopes to be in 24 cities, he said.

PEOPLExpress airlines re-emerges.
Source: PEOPLExpress

Introductory fares will start as low as $76 each way, but much like Spirit and Frontier airlines, PEOPLExpress will charge for add-ons including checked and overhead bags.

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The first checked bag will cost $20, and a second will be $25. Carry-on bags in overhead bins will cost $25 per bag per flight segment. An exit-row seat will cost an extra $25 each way while 12 bigger "Living Large" seats on each plane will cost an extra $59 per flight segment. Advance seat assignments cost $15 each way. And even on-board beverages will be available for purchase with the "complimentary snacks," according to the company's press release.

Better customer service will separate PEOPLExpress from the other low-cost carriers, Erickson said. "You do it by caring, by listening," he said. " If you go back and read the history of the first PEOPLExpress, they really created a good feeling among their passengers. You do it by solving their problems."

The initial hub will be at the Newport News-Williamsburg International Airport, but as the company grows, future hubs are intended for Pittsburgh; San Antonio, Texas; New Orleans; and Atlantic City, New Jersey, Erickson said.

"I think there is a real opportunity as some of the other airlines are distracted by completing their merger or focusing on slots that came available," Erickson said in an interview. "Our entire focus has been to recreate the PEOPLExpress brand at airports that have a demonstrated a history of traffic but no longer have the service."

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Technically, the airline will start its first year as a different airline as it awaits full approval from the Federal Aviation Administration. "Vision Airlines, dba PEOPLExpress" will operate with leased 150-seat Boeing 737-400s and the employees will be Vision Airlines workers but in the PEOPLExpress uniform with a refreshed version of the airline's 1980s silhouette logo.

The old PEOPLExpress was based at Newark until it was acquired by Continental, which was then acquired by United. "Other than the name there is no affiliation, however a number of our employees previously worked for the old PEOPLEexpress," Erickson said.

Summer travel stats

The privately held PEOPLExpress hired Erickson six months ago to get the airline off the ground. He was CEO of Trans World Airlines at the time of the TWA Flight 800 crash off of Long Island, New York, in 1996, and he also was the founding CEO of Reno Airlines in the early 1990s, which he said has many parallels to this current start-up.

Virginia Gov. Terry McAuliffe was expected at the airline's launch announcement Friday. "One of the keys to economic development and creating jobs in the Commonwealth is the ability of the state to connect people and enterprises from other parts of the country and the world to our communities and vice versa," McAuliffe said in a statement ahead of the event. "The launch of PEOPLExpress will be another asset strengthening Virginia's first-in-class business environment."

Tickets for PEOPLExpress flights will go on sale June 4 via the company's website and a toll-free phone line.

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—By CNBC's Amy Langfield.

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