Jan. 10--NEWPORT NEWS -- A regional airport committee approved a taxpayer-funded $500,000 short-term, refundable loan for People Express on Wednesday, paving the way for the start-up airline to acquire an undisclosed charter airline and begin air service out of the Newport News-Williamsburg Airport this year.
"This will simply help People Express pull together the financing and ultimately acquire the charter airline. This is the no-risk piece," said Florence Kingston, the Newport News economic development director who heads up the Regional Air Service Enhancement committee. The RAISE committee unanimously approved the funding and the contract is expected to be signed on Friday by the Newport News Economic Development Authority.
If all goes as planned, People Express President Michael Morisi said, the charter airline and its five airplanes would be purchased by the end of February, with commercial service to start before summer begins.
Because Newport News would be the world headquarters for People Express, the airline could have about 250 employees in 2013, Morisi said. Currently, about 30 people work for People Express. If successful, People Express would be a re-launch of the iconic 1980s-era airline that was a pioneer in discount ticketing. Routes could go to places like New York, Pittsburgh and Orlando.
Morisi said he appreciates the support from RAISE, which is made up of economic development officials from across the Peninsula.
"It's a great move, a sign of support and we appreciate it very much," Morisi said.
Morisi said he doesn't know if People Express will ask for more assistance once the loan is paid back.
Kingston said she expects People Express to ask for more permanent financial help, which will be scrutinized.
"We need to see evidence of private investment and the routes that are planned before we can respond," Kingston said.
People Express announced in February 2012 that it would be reborn at the Newport News airport, but the start of service has been pushed back several times. Morisi said some initial financing fell through, but now they are back on track.
The RAISE committee is a collaborative effort by Peninsula communities, which all chip in money every year based on a funding formula. Newport News contributes about $108,000 of the $225,000 that's put into the fund every year. Also contributing are Hampton, James City County, York County, Poquoson, Williamsburg and Gloucester.
The RAISE committee has collected about $2.5 million since it was created several years ago, with $1 million earmarked for incentives for Frontier Airlines.
Officials have been trying to jump-start the Newport News airport since AirTran ended service last year and Delta cut back on routes.
Michael Boyd, a Colorado-based aviation consultant, said that public entities should be careful about giving taxpayer funds to start-up airlines, as there are many examples of the money evaporating. But Boyd said considering that the amount is not substantial, it is probably worth the risk.
"It's a no-win, might-win situation," Boyd said. He said if the area does nothing to help, then People Express definitely won't succeed. But the possibility of People Express being successful is worth a modest investment, Boyd said.
People Express loan
A regional airport committee on Wednesday approved a short-term, $500,000 refundable loan for People Express to help the start-up airline acquire a charter airline and begin service out of the Newport News-Williamsburg International Airport this year.
Copyright 2013 - Daily Press (Newport News, Va.)
