PEOPLExpress Airlines grounded after just 3 months in business


Three months after PEOPLExpress Airlines got up in the air, the company has suspended service, effective immediately.

The setback is temporary, the company said, in a statement. It aims to relaunch "on or about Oct. 16."

"Recent aircraft and crew availability and maintenance issues, including an aircraft recently damaged by a vendor's truck, an engine change and a lack of a promised spare aircraft, have made it challenging to operate a full schedule, preventing us from delivering the passenger experience we are striving for," the company said.

A few minutes after the company issued its statement, it sent a revised release changing the term "promised" aircraft to "planned" aircraft.

PEOPLExpress airlines.
Source: Ted Kitchens for PEOLPExpress

The airline said it is processing refunds for passengers for flights booked through Oct.15. For reservations beyond that time, PEOPLExpress said its passengers will receive a notification as soon as our resumption plans are finalized.

In August, the airline stranded more than 80 passengers when its captain and first officer were unable to fly and there was no back-up crew available. The airline called the scheduling situation a "perfect storm" and said it was working on agreements with other airlines to provide emergency back-ups.

Read MorePEOPLExpress passengers stranded after crew unable to fly

PEOPLExpress started service June 30 on a handful of routes from its headquarters at Newport News/Williamsburg International Airport in Virginia. Base fares for tickets started at $59, with extra fees for checked luggage, use of overhead bin space and even in-flight beverages such as coffee, tea or water.

The company said 55,000 passengers have so far flown on it 817 flights.

The airline has been flying to Newark, New Jersey; Boston; Pittsburgh; West Palm Beach, Florida; Atlanta; New Orleans and St. Petersburg, Florida.

On Sept. 3, the company announced it planned to start service between Charleston's Yeager Airport and Orlando International Airport as of Oct. 16. The company said today it still plans to start flying that route as of Oct. 16.

Read More Airlines pocket $899.5M in checked-bag fees

The airline shares its name with a low-cost airline that still stirs fond nostalgia from former passengers. 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," CEO Jeff Erickson told CNBC in May.

PEOPLExpress wasn't the only new airline to launch this summer. La Compagnie, an all-business class airline flying between Paris and Newark, started service July 21.