Feb. 15--NEWPORT NEWS -- Michael Morisi is a frustrated traveler.
That's essentially the genesis behind the Chesapeake native's spearheading of an effort to resurrect the once-celebrated PeoplExpress airline that will now be headquartered at Newport News-Williamsburg International Airport.
The airline was officially announced Monday afternoon. It is expected to initially serve a handful of East Coast cities and hire about 1,000 employees over a three-year period.
Tuesday was move-in day at the company's freshly painted and carpeted 15,000-square-foot headquarters in the Newport News airport's old terminal. Most of the management staff huddled behind computers at a single boardroom table while David Wright, director of information technology, sat cross-legged on a floor with his laptop.
By late morning, movers were carting in waves of desks and file cabinets as contractors worked on projects nearby.
'Big-time opportunity'
During a sit-down interview in a bare office, a smiling Morisi, who is president and COO, looked like a man with a plan coming together.
"There are always naysayers that can see doom and gloom," he said, in response to airline analysts and others who have lampooned the idea of starting a new airline in the current economic and industry climate.
"To start an airline -- if you watch the news -- would be ridiculous," he said. "Some people see a mess, while some see a big-time opportunity."
PeoplExpress Airlines operated for a few years during the 1980s as the original no-frills, low-cost carrier. Norfolk was one of the Newark-based airline's original destinations. But over-expansion eventually spelled ruin for the carrier that was absorbed by Continental Airlines in 1987 and ceased operation.
Morisi, a former PeoplExpress manager who was tasked with opening new markets, now owns the rights to the brand name and plans to restart flights by mid-summer.
There are, however, hurdles left to clear before the airline can take off. The company still needs to raise additional startup capital, buy a small fleet of jets and get certified for operation by the Federal Aviation Administration.
Initially, the airline's planned destinations will include: Pittsburgh, Providence, R.I., Newark, N.J., Orlando and West Palm Beach, Fla. Fares will start at $69 and there will be no extra fees for seat assignments or checked baggage, Morisi said.
Fliers today are challenged by the consolidation of airline services, high costs and uncomfortable accommodations, Morisi said. "I think we can change that and help people fly smart again.
"I want to be able to pack my four kids in an airplane and go somewhere for fun," he said. "You can do that now (with PeoplExpress)."
Starting slow
Morisi says the new company will borrow from the original PeoplExpress business plan while dodging pitfalls that ultimately felled the company.
The new PeoplExpress will start slowly, take no risks, stick to a "responsible" business plan and avoid over-extension, Morisi said. He added that the airline will focus on serving secondary markets and avoid challenging established airlines in larger cities, he said.
In 10 years, Morisi envisions PeoplExpress serving 100 cities, but none of the major "hubs" like Chicago and Dallas. He said the management team worked on the company's financial model for about nine months prior to Monday's announcement that made news nationwide.
The company is in the process of raising startup capital and will offer an initial public offering at a future date.
Morisi says other states that tried to court the airline offered millions in cash upfront and every airport officials visited promised revenue guarantees. The company has requested no public funding assistance in relation to the Newport News airport but expects to receive performance-based tax breaks that would be offered to any company that locates and hires within Virginia.
Revenue guarantees would only be requested if the Peninsula airport wanted PeoplExpress to extend service to a city with questionable potential, he said.
To be profitable in the unstable airline industry, PeoplExpress intends to adhere to a cost-constrained management structure, use a cross-trained and non-unionized workforce and purchase used Boeing 737-400 airplanes.
The company plans to buy 10-year-old jets -- seven in the first year of operation and seven the following year. If all goes well, purchase of an additional 16 jets will begin in 2014. Morisi said buying the used jets will save the company about $200 million per month in operations costs.
Morisi said he has engaged in a fair amount of risk-taking in his career, but "not anything this far out of the box." He described the airline's management team -- many of whom have connections to the original PeoplExpress or other airlines -- as integral to the ultimate success of the startup.
"Those people are passionate about building something spectacular -- not just getting into the airline business," he said.
Copyright 2012 - Daily Press, Newport News, Va.
