PEOPLExpress is the new airline coming to Newport News

Feb. 14, 2012

Feb. 14--NEWPORT NEWS -- The once-iconic low-fare airline PEOPLExpress will be reborn as a startup headquartered at Newport News-Williamsburg International Airport, officials announced Monday afternoon.

Company president and COO, Michael Morisi, said the airline will initially fly to Pittsburgh, Providence, R.I., Newark, N.J., Orlando and West Palm Beach. Fares will begin at $69 and there will be no extra fees for seat assignments or checked baggage.

The company is aiming for a mid-summer startup and will fly Boeing 737-400 jets with 158 seats, Morisi said.

PEOPLExpress Airlines operated in the 1980s and was known for its no frills, low-fare, non-unionized air service that jolted the newly deregulated airline industry. It found initial success and expanded its operation but was ultimately absorbed by another airline as a result of debt-related issues. One of the Newark-based airline's initial flight routes was to Norfolk.

The move to locate the resurrected airline's headquarters at the Newport News airport will add about 1,000 jobs to the local economy over the next three years, Morisi said, after the official announcement. He said about 350 of those positions would be filled this year.

Management team

For the announcement, Morisi was joined on a make-shift stage erected in the airport's terminal by about 10 members of the company's management team -- all initial investors in the airline.

Several of them, including CFO Jason Moulton and IT director David Wright, are South Hampton Roads natives or long-time residents.

The company's CEO was not present at the announcement and was not identified because he is restricted by a non-compete clause for a couple more weeks, Morisi said.

Morisi's LinkedIn resume shows he previously served as the chief operating officer for North Carolina-based charter carrier Leisure Air from 1993 until 1995 and was a team manager for PEOPLExpress/Frontier/Continental airlines from 1981-1987. The Chesapeake native has also worked as a Ritz-Carlton Hotel manager and as a senior business development manager for a Homeland Security contractor called Homeland Security Solutions, the profile stated.

The employee-owned company has completed one round of capitalization and a second round is being managed by New York investment firm W.R. Hambrecht and Co., Morisi said.

After the announcement, Christine DeZarn, a former PEOPLExpress employee who is now the new company's vice president and chief marketing officer, said a public stock offering will be made at a later date, but she didn't know when that would occur.

Officials with the Peninsula airport and a regional economic development entity that sometimes provides revenue guaranties to new airlines that locate in Newport News have said the company has sought no publicly funded incentives or subsidies.

Morisi said during the announcement that Newport News was chosen for the company's headquarters because the city is "conveniently located between Richmond and North Carolina. We believe we can stimulate a significant market here."

In an effort to re-invent PEOPLExpress, DeZarn said, management level employees were sought from within the airline industry but also from areas -- like hospitality -- that fall outside its ranks.

"We looked for a mix of ideas, people that bring skills and tactics that maybe break out of the industry standard," she said. "A lot of assumptions are made when an industry inbreeds too much and stagnates."

'Make flying fun again'

PEOPLExpress was initially born about 30 years ago during a time when the country was economically stressed and the airline industry was wrought by "cumbersome connections" and high fares, Morisi noted during his introductory remarks Monday.

The airline found success back then by servicing secondary markets with a low-fare option, he said, adding that the current intention is to return to those roots because "leisure travel is almost fare prohibitive."

Morisi said the new PEOPLExpress would "make flying fun again" by questioning industry-accepted practices and finding ways to serve customers better while operating in a tight, cost-controlled environment with an efficient management structure.

Filling a gap

Ken Spirito, executive director at the airport in Newport News, said it has been a long time since the airport has served Pittsburgh. The new airline's Newark and Providence flights will also help fill a route gap when AirTran Airways ceases its operations in March, he said. The AirTran routes currently include destinations in Boston, New York, Atlanta and Orlando.

"I think Boston is in our future," he added, noting the same about expansions into more Florida destinations and other states.

In addition, headquartering the airline on the Peninsula will stimulate the local economy by filling a 15,000 square foot office space with employees who will shop, buy cars and houses, Spirito said.

"We believe the time is right to start this airline," Morisi said.

"This was an iconic airline. Somewhere along the way the niche got lost," he said. "We intend to stay focused on that... We're going to build that culture again. PEOPLExpress was a household name back then and we're going to do that again right here in Newport News."

Copyright 2012 - Daily Press, Newport News, Va.