MIAMI — PEOPLExpress will be suspending service until October 16, 2014, impacting the travel plans of thousands of customers around the United States and particularly in the Hampton Roads region of Virginia. PEOPLExpress, based in Newport News, Virginia, has been struggling with operational reliability for nearly a week after one of its aircraft was struck by a service vendor’s truck. The suspension of operations may prove to be a terminal blow for the fledgling ultra-low cost carrier (ULCC).
PEOPLExpress currently leases a pair of Boeing 737-400 aircraft from Vision Air, a charter airline whose previous attempt at running scheduled operations from Destin, Florida had failed. PEOPLExpress had been in the works since early 2012, but struggled with the Federal Aviation Administration (FAA) certification process, eventually using FAA Part 121 certification.
However, with one half of its fleet out of commission, PEOPLExpress can not continue to fly all seven of its routes, and has been forced to shut down. Normally, small airlines in such dire straits will opt to wet-lease an aircraft (and even crews) to maintain service on most of their network. In failing to do, PEOPLExpress may have blundered, as the goodwill it won from bringing low-cost service to a smaller community will be outstripped by the negative effect of thousands of irate customers – many of whom will likely never fly this airline again. The only reasonable explanation for this decision is that the airline lacks sufficient funds to wet-lease the required aircraft, which does not bode well for its long or even short term prospects.