How People Does It

One feisty little carrier with rock-bottom prices has more business than its reservations clerks can handle. At People Express, callers sometimes find themselves talking to President Donald Burr. No wonder Burr is glad to pitch in whereever he can: last month, People flew 357,000 paying customers, a whopping 146% increase over traffic a year ago.

In the 22 months since People Express started up, its home base--a former freight terminal--has become the busiest gateway at Newark International Airport, some 13 miles southwest of New York City. Flying passengers between cities from Boston to Palm Beach and as far west as Columbus, the pint-size airline earned a profit of $27 million in the first nine months of 1982, while the likes of Pan Am, Eastern and TWA were all showing losses. People's progress is mainly due to the lowest operating costs in the business, an average of 5.3-c- per seat per mile flown vs. up to 11-c- for other airlines. Says Burr: "We don't have any secret weapons. Our competitors can do it, and many of them are working day and night to get their costs down."

Burr, 41, formerly president of Texas International Airlines, gives much of the credit to his dedicated staff of 1,200 "racehorse types" who hire on for less and work hard. They have reason to: on the average, People Express workers own $20,000 worth of stock in the company. The onetime schoolteachers, anthropologists and art historians recruited by Burr seem to thrive in a company that has no secretaries or plush offices, and whose chief financial officer, Robert McAdoo, helps serve coffee on some flights. Says McAdoo: "We're all in this together."

Passengers seem to feel the same way. They do not mind paying 50-c- for a soft drink, or $3 for every bag checked. After all there is plenty of room for carry-on luggage, and People's buy-while-you-fly on-board ticket sellers eliminate those long waits at airport counters. But it is the fares that clinch customers' loyalty. Eastern Air Lines, once the king of the New York-Florida routes, is scrambling now to hold on to the business. Reason: People's $69 one-way fare ($49 at night) Eastern, whose standard coach fares are more than $200 for those flights, has retaliated with a $72 fare, but only for a few seats on night flights out of Newark. Moreover, Florida-bound Eastern customers boarding at nearby La Guardia Airport pay more, mainly because People flights are not available there.

Thanks to People's competitive punch, the airline's stock has more than doubled, from 11 to 24 5/8 per share, over the past year. Donald Burr may still be working seven days a week, but his 9% share of the company stock is now worth $17 million. And the customers keep coming out of the woodwork. Says Burr: "We're getting people who wouldn't have traveled to New York to see a show, or buy clothes. If they did, they would have driven or taken a train." These days, at least on People Express, it is cheaper to fly. This file is automatically generated by a robot program, so viewer discretion is required.