People Express may fly again

(AP)

The People Express brand is attempting a comeback, trying once again to position itself as a low-cost airline.

The new PeoplExpress Airlines, as it is now branding itself, made the announcement Monday. Its founders say they're talking to airlines and lessors about obtaining seven to10 Boeing 737-400 aircraft by year-end.

The company, with leadership that includes a handful of the personnel employed during its tenure as a low-cost carrier in the 1980s, will be headquartered at Newport News-Williamsburg International Airport in southeastern Virginia.  It says it hopes to offer flights on the East Coast this summer. It still needs financing and federal approval.

The goal for PEOPLExpress this time is to enter markets—primarily in the Eastern U.S.—where major carriers have scaled back or eliminated service because of mergers, consolidation, fuel price increases, high unit costs or financial troubles.  It believes it can keep costs low enough to compete in these markets, many of which have limited service.

Starting in 1981 from an airport terminal in Newark, N.J., People Express grew in just four years to become one of the largest U.S. airlines, measured by the number of passengers it carried.

At the time, People Express offered no-frills service at prices far below those of major competitors. The demand for cheap tickets struck a chord, but passengers knew the ride could be a little bumpy.  Passengers camped out for cheap stand-by seats on flights that were often overbooked. They paid extra for checked bags, food and drinks back when most airlines provided those things free.

But due to the airline's rapid expansion, it got into financial trouble, incurring debt and stiff competition from other airlines, such as United and American. In 1986 it put itself up for sale.

The new PEOPLExpress has money from private investors, but says it still needs to raise funds necessary for an airline start up.  So whether the airline will get off the ground still remains to be seen.

The Associated Press contributed to this report.