PENZA UNITED AIR DETACHMENT (PENZENSKII OBEDI-NENNYAVIAOTRIAD): Russia (1992-2000). The Penza division of Aeroflot Soviet Airlines is reformed into PUAD during 1992. Under the leadership of Director General Gennadi Eremin, scheduled and charter regional passenger and cargo services are undertaken with a fleet that includes 3 Antonov An-24Bs, 6 An-24RVs, 1 An-26, 2 An-12s, and 29 An-2 biplanes.
Service is maintained throughout the remainder of the decade. Severely impacted by the Russian financial crisis of the late 1990s, the carrier is liquidated on February 21, 2000.
PEOPLEXPRESS: United States (1980-1987). PEOPLExpress is the first independent national airline to be designed from scratch, founded, certified, and placed into service following passage of the Airline Deregulation Act of 1978. In terms of pricing, scheduling, and customer service, it will prove, at least for awhile, that the days of the pioneering air carriers are not over.
Three former Texas International Airlines officials (President Donald C. Burr, Vice President-Management Gerald Gitner, and Burr’s executive assistant, Melrose Dawsey) pool savings of $545,000 and incorporate People Express, Inc. (with the marketing name PEOPLExpress) at Houston on April 7, 1980. On July 22, an application for certification is filed with the CAB, which grants the petition on October 24.
On November 6, the company, initially classified as a large regional, with the assistance of the San Francisco venture capital firm of Ham-brecht & Quist, goes public, selling 3 million common shares of stock at $8.50 each. After expenses, $23.5 million is left for start-up, including the acquisition of 17 $4.5-million Boeing 737-130s from Deutsche Lufthansa, A. G. A large workforce is recruited from unemployed airline workers; each new recruit is required to invest in the corporation and, in turn, become “managers” in an organization designed to have no hierarchy or seniority differences. Everyone is considered a manager of something, e. g., pilots are flight managers, flight attendants are customer service managers.
PEOPLExpress, led by founder Burr, moves to company headquarters at the seldom employed North Terminal of Newark (EWR) in early 1981. Having received major overhauls as part of their acquisition, the first three Boeing 737-130s arrive from Germany in March. These are employed to begin low-fare, no-frill, high-frequency flights to Columbus, Buffalo, and Norfolk on April 30.
Indeed, the operation is so low key that in exchange for fares of $23-$79, the carrier maintains no airport ticket counters and hence suffers no cancellations and does not have a toll-free phone number. It serves no in-flight meals, passengers are charged $3 for checked baggage, and fares are collected by flight attendants on board during flights. There are, in fact, only two kinds of fares, based on time of day: peak (7 a. m. to 7:59 p. m.) and off-peak (8 p. m. to 6:59 a. m. weekdays and all day on weekends); there are no restrictions or minimum stays.
As additional Boeings become available, routes are stretched to Baltimore, Boston, Syracuse, Jacksonville, and Indianapolis. Airline employment is now 250. In an effort to compete, United Airlines introduces low-fare Friendship Express service over a sixth of its route network on June 12; high operating costs doom the effort.
While making its descent into Newark (EWR) on August 17, a B-737-130 with 118 aboard has a near miss with a private lightplane over Morristown, New Jersey; no injuries are reported. As an aftermath of the August PATCO air traffic controllers’ strike and President Ronald Reagan’s mass firing of strikers, the FAA announces a reduction in frequencies at a number of major airports, including Newark. At dawn on October 25, before the FAA restrictions take effect later in the day, all PEOPLExpress B-737-130s are dispatched from the New Jersey airport to the unrestricted gateways of Buffalo, Syracuse, Columbus, and Baltimore.
From those sites, flights begin to Sarasota. The same $59 one-way flights are initiated to West Palm Beach on November 21.
Largely unnoticed during the year is the appointment of Beverly Burns to the right seat of a B-737-130; she is the company’s first female pilot.
Although the need for additional ground support increases the carrier’s costs, it is able to remain aloft and to fly 952,000 travelers during its first 8 months. Revenues total $38.38 million. Still, start-up costs and the strike combine to create expenses of $45.58 million. Initial loses are significant: $5.74 million (operating) and $7.93 million (net).
In 1982, under terms of the CAB’s airline category scheme, PEOPLExpress is reclassified as a national carrier. In February, president and cofounder Gerald Gitner moves to Pan American World Airways (1); he is succeeded by Harold “Hap” Pareti, another ex-Texas International Airlines veteran. Service is initiated to Pittsburgh in March and Melbourne, Florida in April. An arrangement is made with McDonnell Douglas for the acquisition of eight used B-727-200s; options are also taken for the purchase of nine new B-727-200s and eight DC-9-80s (MD-80s). When the last B-737-130 arrives from Germany, observers note that someone has added a tear trickling down tail fin’s face logo.
Rights into Washington, D. C. (DCA) are obtained in June and low-cost flights into the nation’s capital begin on August 3.
Joined by Morgan Stanley, Hambrecht & Quist orchestrate another public stock offering on August 19; 2.47 million shares bring in slightly more than $28 million.
Two Boeing 737-217s are purchased from CPAir, Ltd. in November, with the first arriving on November 9. It is employed to inaugurate services six days later to Burlington, Vermont, and Hartford, Connecticut. A third Canadian Dash-217 arrives in December, allowing Burr’s company to begin serving Washington, D. C. (IAD). Late in the year, London route authority is requested from the CAB.
During its first full year of operations, passenger boardings skyrocket 200.2% to 2,859,000 and revenues of $138.68 million are earned, a 261.08 boost. Expenses climb to $128.23 million and consequently, profits are generated: $10.45 million (operating) and $1 million (net).
Early in 1983, an agreement is reached with the creditors of failed Braniff International Airways for the purchase of 20 B-727-227s plus the lease of the former South American pioneer’s B-747-227B, once known, because of its livery, as “Big Orange.” London permission is received from the CAB in March.
To finance the Braniff aircraft deal, another million shares are sold on April 26 at $32 each. President Pareti, in London on May 20 to negotiate landing rights with the British Civil Aeronautics Authority, announces that starting on May 23, PEOPLExpress will begin taking reservations for $149 one-way transatlantic economy-class service. It will also offer a discounted premium-class service, with more leg-room and quality cold meals.
The one-time “Big Orange” inaugurates Newark to London (LGW) return flights on May 26. President Burr is the first off the aircraft when it reaches England and holds a press conference to report the launch. Thereafter, the Jumbojet will enjoy a 100% load factor on nearly every service, with hundreds of would-be passengers turned away. Also in May, a fourth B-737-217 arrives from CPAir, Ltd.
On June 1, another major, Trans World Airlines (TWA), counterattacks on the North Atlantic, cutting its fares from six U. S. gateways to London by 25%.
The deregulation darling continues to enjoy excellent domestic traffic growth, though not without problems. As thousands of first-time-flyers attempt to book passage, reservation phones are unable to handle the volume. Additionally, air traffic control in the New York area is unable to handle the increase during the first days of summer. At times, delays reach six hours.
The bulk of the B-727-227s arrive during the summer and during those months, an attempt to enter the Minneapolis (MSP) hub of Northwest Airlines is beaten off when the major counterattacks with low fares and many more frequencies out of its base.
On October 1, $69 one-way Newark to Houston flights begin five times per day service. It is suggested in some quarters that this challenge to Donald Burr’s onetime associate Frank Lorenzo causes the latter to take Continental Airlines into Chapter XI bankruptcy. Simultaneously, British Airways, Ltd. (2) enters the price war between People and TWA on the North Atlantic, reducing its roundtrip London-New York fare to just ?249.
While en route from Buffalo to Newark on October 15, Flight 104, a B-737-227 with 107 passengers, is taken over by a lone assailant, Gamiel Robert Ambroise, who falsely claims to be armed and demands that the aircraft be flown to Atlantic City. At the gambling mecca, the perpetrator is arrested by police as he hails a taxicab. Upon examination, the pirate will be certified as mentally unstable and sent to a psychiatric institution.
As of December 31, the company is larger than all but four national carriers, Southwest Airlines, Piedmont Airlines (1), Frontier Airlines (1) , and PSA (Pacific Southwest Airlines), and with 150 daily Newark departures, is the largest carrier on the U. S. East Coast.
On the year, passenger traffic increases 100% to 5,697,000 passengers carried. Revenues skyrocket 110.3% to $292.06 million and expenses, up 111.6%, are held to $271.62 million. As a result, operating income accelerates to $20.44 million and the net profit jumps to $10.4 million.
In January 1984, the company receives the 1983 “Market Development Award” from Air Transport World magazine.
Massive expansion continues as the 4,000-employee carrier moves into significant new markets, some against major competition and competitors such as Northwest Airlines, United Airlines, and American Airlines. The onslaught begins against the former carrier on June 1 when PEOPLExpress, having regrouped from its previous failure, inaugurates flights to Minneapolis (MSP). Two weeks later on June 15, the carrier’s first transcontinental route is started to Los Angeles; three newly added former Alitalia, S. p.A. B-747-243Bs are employed to offer $119 one-way fares.
Flights into the United Airlines and American Airlines bastion at Chicago commence on August 22, the same day orders are placed for 25 additional Boeing jetliners. Within two weeks, the three impacted majors engage Burr in a fare war. Meanwhile, expansion continues apace; flights begin to Detroit and Miami on September 5, San Francisco on September 28, Cleveland on October 18, Denver on November 19, and Orlando on December 19. The former Braniff “Big Orange” is sold to Northwest Airlines in December.
Traffic increases 59.7% as 9,098,109 passengers are flown. A total of 3.64 million FTKs are also hauled. On the year, revenues zoom upward by 104.8% to $586.8 million, expenses increase 112.3% to $566.6 million which, when added to the costs of growth and the fare war, force People’s operating profit to drop to $20.16 million and net gain to $1.65 million.
In what will prove a successful marketing strategy for use against Chairman Burr’s carrier, Robert Crandall, chairman/CEO of American Airlines, with great fanfare and publicity that promises both PEOPLExpress prices and amenities, introduces the ultra-low ticket prices of AA’s Ultimate Super Saver fare on January 18, 1985. Indeed, by using American’s innovative SABRE reservations system and the yield management concept—the ability to accurately predict the proper mix of fares to sell on a given flight—Crandall begins a competitive process that will take away People’s reason d'etre, i. e., cheap seats. With help from other carriers employing similar tactics, American will ultimately put the surging entrant out of business.
Later in the month, President Pareti resigns.
Seven additional Boeings now arrive and the fleet comprises 22 Boeing 737s, 45 B-727s, and 3 B-747-243Bs. In February, a B-747-133 is leased from Guiness Peat for four months and is the only aircraft employed that is not painted in People’s livery.
In line with other airlines emerging from recession, ticket prices are increased an average 10% in March and Wall Street now contributes a further $33 million in capitalization. With the addition of Charlotte and Dayton to its market system in late winter, 4,000-employee PEOPLExpress, which has flown 23 million plus passengers since 1981, offers 394 nonstop daily flights to 36 cities in 20 states and England.
In March, under an agreement with the Port Authority of New York and New Jersey, $175 million in construction is begun for completion of the unfinished Terminal C (to be named PEOPLExpress Terminal) at Newark (EWR). Daily nonstop flights commence between Cincinnati and Newark on April 1.
The last of four B-747-243Bs once flown by Alitalia, S. p.A. is delivered on June 10. On June 24, more than 400 people are evacuated from one of these 747s after a bomb threat forces it to make a nonscheduled landing at Chicago (ORD). Daily nonstop service between Newark and Nashville begins on June 26, followed by first-time flights to St. Louis, New Orleans, and San Diego. At the end of the second quarter, the carrier is returned to profitability and is now the ninth largest U. S. airline and the largest operating into the New York area.
Marylander Waleed Muaket is charged on July 6 with making terrorist threats when he tells a flight attendant aboard a B-727-227 that he wishes to hijack it. Four B-747-238Bs, formerly operated by Australia’s Qantas Airways (Pty.), Ltd. are now purchased, with the first delivered on July 10. A B-727-217, taxiing at Newark on July 18, nearly collides with a World Airways DC-10-10; more than 200 passengers are jostled, but none are injured. In July and August, the carrier expands to five more cities, including Montreal, Atlanta, Dallas (DFW), Albany, and Providence.
At a shareholders meeting in August, the company’s first dividend is voted: five-cents-a-share quarterly. In addition, anti-takeover rules are instituted. Employing a B-747-243B, daily nonstop service is launched from Newark to Brussels on September 8; the fare is $99 one way, rising to $149. Later in the month, frequencies begin to Birmingham, Charlotte, Columbus, Raleigh/Durham, and Nashville. On September 20, Continental Airlines Chairman Lorenzo makes a bid for financially distressed Frontier Airlines (1). To avoid being ensnared by Lorenzo, who is perceived to be a union buster, Frontier and its unions involve Donald Burr in a bidding war for the 40-year-old carrier and its Denver slots. The second former Qantas Airways (Pty.), Ltd. Jumbojet arrives on September 27.
When company officials receive a bomb threat on October 1, a Jum-bojet is forced to make an emergency landing at the Dugway Proving Ground airfield in Utah; 146 people are safely evacuated and no bomb is located. Meanwhile, the unionized Frontier Airlines (1) is captured by nonunionized PEOPLExpress on November 22 at a cost of $24-a-share; the former will be operated as a subsidiary.
Passenger boardings jump 30.8% to 11,907,000. Revenues mushroom by 55.7% to $927.87 million, costs advance 55.3% to $894.49 million, and the operating profit bounds upward to $33.37 million. Unhappily, there is a net loss of $20.13 million due to the costs of gaining Frontier Airlines (1).
During January 1986, a section of the PEOPLExpress Terminal (formerly Terminal C) at Newark (EWR) is opened to B-747 operations only, thereby offering some relief to the congestion at North Terminal. On January 31, the nation’s oldest commuter airline, Provincetown-Boston Airline (PBA) is purchased, instantly increasing the number of People stations in Florida to 14.
An interline agreement is established with Britt Airways on February 5; however, by February 26, that Terre Haute-based regional is also a fully owned subsidiary. Frontier Airlines (1) is now losing $10 million per month and at the end of the first quarter, Burr must report an unprecedented combined loss for People and Frontier of $58 million.
On May 1, a frequent-flyer program is introduced for business travelers; a number of planes introduce first-class sections this same day and a third Australian Jumbojet is delivered. At the same time, a Jumbojet $99 Air Bridge service is inaugurated between Denver and Newark.
Fiscal bleeding is now so intense that the only way to avoid bankruptcy is to find a buyer and, late in the month, Burr enters discussions with Frank Lorenzo. When news of the discussions leak, other airlines enter the bidding, including United Airlines, Delta Air Lines, and Western Airlines.
On July 6, Texas Air Corporation (TAC) bids $9 per share; the next morning, United Airlines offers $146 million for the Frontier Airlines (1) subsidiary alone. On July 10, the latter bid is accepted; however, the arrangement is dead within weeks, killed by the United Airlines and Frontier Airlines (1) unions over pilot seniority. Frontier ceases operations on August 24, filing for Chapter XI bankruptcy four days later in a Denver court.
On September 15, with no other viable options available, PEOPLExpress and its subsidiaries are sold to TAC. The low-fare pioneer’s employees and the public are informed by Lorenzo and Burr during an afternoon news conference at the reservations center in Newark.
Allowed to continue its separate identity during the integration process, the low-fare carrier inaugurates frequencies in December from Newark to Honolulu via Los Angeles. At the same time, a B-747-238B, which has a Bob Hope profile painted on its tail, is employed to fly the comedian and his troop of entertainers to the South Pacific. It is hoped that the fee and public exposure from a television program at Christmas will be helpful. TAC shareholders approve the takeover on December 31.
During three quarters of independence, the largest deregulation-born airline transports a total of 10,756,171 passengers (off 9.7% over the same period a year earlier) and hauls 146.49 million FTKs. Revenues fall 5.5% to $668.44 million, expenses rise 7.8% to $739.7 million, and the operating loss is $71.26 million. An enormous $120.25-million net loss is taken.
Newly reconfigured B-727-227s allow first-class service to be introduced in January 1987 on every flight between Newark and Chicago. The Jumbojet service to Brussels is suspended after the last flight arrives back at Newark on January 16; 10 days later, the last Qantas Airways (Pty), Ltd. B-747-238B is accepted. The final company services are completed on January 31 and on February 1 PEOPLExpress, together with New York Air, is merged into the TAC flagship, Continental Airlines. Continental will complete Newark’s PEOPLExpress Terminal, once again named Terminal C, and by the early 1990s, had finally completed the repainting of all the aircraftg acquired in the merger. There is an unofficial Web site for PEOPLExpress at Http://www. flash. net/airline/pehist. html.
PEREGRINE AIR SERVICES, LTD.: United Kingdom (19691986). Peregrine is established at Aberdeen, Scotland, in 1969, to offer charter, air taxi, and contract service flights, particularly in support of the North Sea energy industry. Services by the 90-employee firm continue throughout the 1970s, employing 2 Beech Super King Air 200s, 3 Cessna 404 Titans, and 4 Piper PA-23 Aztecs.
Peregrine’s most significant claim-to-fame occurs on December 30, 1982, when it becomes the first U. K. operator of the new British Aerospace BAe Jetstream 31. A second of these turboprops is placed into service in 1983 and a total of 70,000 passengers are transported during the year.
Managing Director Mike Hornblower’s company maintains services until 1986.
PERIMETER AIRLINES, LTD.: 626 Ferry Road, Winnipeg, Manitoba R3H 0T7, Canada; Phone (204) 786-7031; Fax (204) 783-7911; Code UW; Year Founded 1976. Perimeter Airlines is formed by William J. Wehrle in the summer of 1976 as the scheduled air transport division of Winnipeg-based Perimeter Aviation, Ltd., an FBO, charter, and flight training center at Manitoba’s principal airport. Employing a fleet of Beech B-65/B-80 Queen Airs, the new entrant inaugurates flights in September.
During the remainder of the decade, regular passenger services are undertaken to St. Theresa Point, Brandon, Dauphin, Garden Hill, Red Sucker Lake, God Narrows, Gods River, Cross Lake, Norway House, Berens River, and Watson Lake. Other points served from Winnipeg include Poplar River, Yorktown, and Saskatoon.
The first of many Fairchild-Swearingen Metros is delivered in 1978 and by 1981 the fleet comprises 3 Beech B-80 Queen Airs, 1 B-65 Queen Air, 6 Beech B-55 Barons, 1 King Air 100, 1 Gates Learjet 35A, and 2 Fairchild-Swearingen Metro Ils.
Enplanements total 26,215 in 1982. In 1983-1985, the fleet is increased by the addition of three Douglas DC-3s and a Piper PA-31-310 Navajo. Services and frequencies are maintained throughout the remainder of the decade.
In 1990, three Barons are replaced by the addition of three more Metroliners and a Fokker Fairchild F-27J. Two additional Metro IIs are purchased in 1991, but two Queen Airs, the Fokker, and a Baron are withdrawn in recessionary 1992. In 1993, President Wehrle oversees a workforce of 105 and adds 2 more Metro IIs. His fleet in 1994 thus includes 13 Metros, 1 Learjet 35A, and several Beech twins. A 14th Metro is acquired in 1995 and operations continue apace in
1996-2000.
PERKIOMEN AIRWAYS: United States (1976-1980). Perkiomen Airways, Eugene Plum’s FBO/charter operations based at Reading Airport in Pennsylvania, elects to establish a scheduled service under its own name in 1976 to provide passenger air taxi services to New York (LGA) via Allentown. Daily Piper PA-31-310 Navajo roundtrips are duly inaugurated and are sustained until late 1979.
In January 1980, an airline division is established and begins service under the name Air Pennsylvania.
PERM STATE AIR ENTERPRISE (PERMSKOE GOSU-DARTSVENNOE A/P): Russia (1993-2000). Based at the airport of its city namesake, Perm State is established in late 1993 to offer passenger and cargo flights throughout the former Soviet Union. Igor D. Grachev is managing director and operations are undertaken with a mixed fleet that includes Antonov An-24s and An-26s and Tupolev Tu-154Bs and -134s.
Operations continue apace in 1994-1995. In 1996, with financial assistance from the regional administration and Tupolev, the carrier acquires a Tu-204 assembled at the Aviastar aviation enterprise in Ulyanovsk. The first company to put the new jetliner into service, the airliner will provide important information on in-service performance and operational costs.
The fleet in 1997-1999 includes 4 Tu-154Bs, 5 Tu-134s, 1 Tu-204, and 3 each An-24s and An-26s.
Scheduled destinations visited during these years include Adler/ Sochi, Anapa, Antalya, Baku, Bourgas, Chisinau, Ekaterinburg, Frankfurt, Krasnodar, Larnaca, Mineralnye Vody, Moscow, Samara, St. Petersburg, Tashkent, Varna, Yerevan. During these years, the Tu-204 is occasionally leased to Avia Express Cruise, which successfully operates on the routes from Moscow to Chita and to Barnaul.
It is reported that on January 19 of the latter year, a Mil Mi-8, on visual approach to a landing site 38 km. from Chaikovsky, loses contact with the ground and crashes. On November 16, that the airline has joined with Siberian Airlines (Sibir) in a concentrated effort to acquire part of the 25% market share held by Vnukovo Airlines in the Ural and Siberian markets.
The workforce stands at 1,000 at the beginning of 2000. A strategic marketing and cooperation agreement is signed with Aeroflot Russian International Airlines (ARIA) in early spring. Under its terms, the state carrier launches daily roundtrips from Perm to Moscow on June 7. On October 1, executives of ARIA announce the creation of a new airline, Aeroflot-Perm, which incorporates the previous Perm State Air Enterprise.
PERMIAN AIRWAYS: United States (1979-1982). John Andrews and David Glover set up Permian at Midland, Texas, early in the second quarter of 1979 to provide scheduled passenger and cargo services to Texas and Oklahoma destinations. Employing a pair of Piper PA-31-350 Navajo Chieftains, the commuter inaugurates daily roundtrips in May linking the company’s base with San Angelo, San Antonio, Lubbock, Amarillo, and Carlsbad.
Operations continue apace in 1980-1981, but economic difficulties force it to close its doors on September 10, 1982.
PERSIAN AIR SERVICES, LTD.: Iran (1957-1961). Founded with the assistance of the British independent Skyways, Ltd., PAS is formed in February 1955. Equipped with Avro Yorks, the company begins freight service to Europe, flying a route from Tehran to Basel via Abadan, Beirut, and Brindisi.
An Avro 685 York C.1 with 4 crew and 9 passengers is lost 40 mi. SW of Basra on September 14; although the aircraft must be written off, there are no fatalities.
An Avro 685 York C.1 is destroyed in a ground accident at London Stansted Airport on September 17, 1956, while another is lost 4 mi. S of Kuwait City on July 15, 1959.
In the spring of 1960, an ex-transatlantic DC-7C is acquired from Sabena Belgian World Airlines, S. A. and on June 20 it is used to launch weekly passenger flights from Tehran to London via Geneva, Paris, and Brussels. In August 1961, leased Boeing 707-138s are employed to inaugurate jetliner flights over the DC-7C route. On November 2, the government of Iran merges PAS with Iranian Airways (Iranair) to form United Iranian Airways, predecessor of the present Iran Air.
PERSONAL JET CHARTER: 5401 NW 15th Ave., Fort Lauderdale, Florida 33309, United States; Phone (954) 776-4515; Fax (954) 491-5771; Year Founded 1980. PJC is set up at Fort Lauderdale Executive Airport to operate executive and small group passenger charters throughout the Western Hemisphere, with emphasis on Central and South America. By 1998-2000 , the company employs 12 pilots and flies 2 Learjet 55 Longhorns and 2 Learjet 35A Century IIIs.
World History
