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People Express: Its trademark brand of service is back in flight

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People Express, the original no-frills airline, was all about cost when it helped revolutionize the industry from its Newark headquarters in 1981.

So it only seems fitting that when a group of investors wanted to restart the airline, they found the cost of obtaining the iconic name was as cheap as it gets: free.

That's right — the trademark on the People Express name had not been renewed, allowing the new company to grab the old name for nothing more than registration fees.

“It's such an iconic brand, we were all surprised it was available,” CEO Jeff Erickson said. “But the trademark was left idle so we grabbed it.”

Restarting the airline hasn't been as easy.

There have been delays, executive departures and layoffs since the initial plans were announced in February 2012. The airline, which is now headquartered in Newport News, Va., made its first flight (into Newark) on July 1.

Erickson, a more-than-40-year veteran in the industry who was brought in last October, feels the time is again right for an airline such as People Express to operate.

The business model, he said, still works.

“People are still paying too much,” he said. “The airline industry keeps saying it has all this free stuff, but it's all embedded in really high prices.”

Erickson knows this firsthand. He said he recently flew to New York City from Virginia for more than $1,000. The same trip to Newark on People Express will be just $112 round-trip, including all fees and taxes.

There are additional fees — such as for baggage and beverages — but Erickson said the overall price of People Express still wins. By a lot.

This all sounds great, but there's just one problem. Right now, People Express only goes round-trip from Newport News to four locations: Boston, Pittsburgh, West Palm Beach, Fla., and Newark. And usually only once a day.

Erickson said the company has plans to add Atlanta, New Orleans, San Antonio, Orlando and St. Petersburg to its network of routes — something that may be vital to its survival the second time around.

Robert Mann, the head of R.W. Mann & Co., has been an industry analyst and executive for nearly 40 years. He said the airline's low-cost model works for infrequent or leisure travelers, but that People Express will have to bring in the seasoned business traveler to survive.

“People who are infrequent travelers or leisure travelers say their No. 1 priority is low prices,” he said. “On that basis, they would seem to be responding to that objective.

“But this doesn't speak to higher-fare individuals. Twenty percent of the customers make up 80 percent of the revenue. These (business) travelers are looking for flexibility in scheduling, multiple flights to multiple destinations and convenient airports.”

Not to worry, Erickson said, the airline will go after the business traveler, too.

“Particularly in Newark,” he said. “The first thing I would like to do is complete the hub here so it flows nicely. So out of Newark it's for people who may choose to connect to Orlando, West Palm Beach, St. Pete and New Orleans.”

But more than that, Erickson said he's looking to take his airline to airports that have lost carriers that have not been replaced. It's one of the reasons People Express chose Newport News (which used to serve as a hub for the now-defunct AirTran) rather than return to Newark.

That, and, of course, airport costs.

“(Price) certainly was a factor in picking Newport News, but the real underlying point is that Newport News had a long- established history of service,” Erickson said. “The service was lost and people just stopped traveling. We're trying to access those travelers and lure them back.”

Just how is the question.

There hasn't exactly been a marketing blitz in New Jersey — raise your hand if you even knew People Express was flying again?

Thomas Becher, a spokesman for the airline, said that's part of being a new company.

“As a low-cost startup company we instead look to supplement limited traditional advertising with social media and local events,” he said. “For example, we have more than 20,000 Facebook likes to help get the word out.”

And this marketing philosophy doesn't figure to change anytime soon around here.

“We will likely not do a lot of traditional advertising in the Newark market due to the high cost of advertising there,” he said.

Mann feels this is a risky decision.

“The No. 1 issue would seem to be awareness,” he said. “They started with some very low uneconomical prices, but they couldn't fill their airplanes. That says there is not enough awareness of their offers.”

Luckily, there is awareness of their name.

And while the availability of the trademark may come as a surprise to many, it didn't to Scott Christie, a partner at McCarter & English who specializes in trademark litigation.

“You cannot bank a trademark for perceived value,” he said. “At various incremental points, you need to file with patent and trademark office an affidavit that you are still using the trademark and demonstrate that you are continuing to use it.

“Normally a trademark owner will want to be careful about keeping an important trademark. It's possible the people who had the People Express name let it lapse because they didn't feel it had any perceived value.”

The new team at People Express certainly felt it had value.

Now they must prove their airline does, too.

E-mail to: tomb@njbiz.com
On Twitter: @tombergeron5

ATLANTIC CITY-BOUND?

People Express CEO Jeff Erickson has a lot of big destinations on his mind. And one not so big: Atlantic City.

“We certainly are considering Atlantic City,” he said. “I think we would look to do Atlantic City perhaps in the fall if we can set up connections to Florida as well. If not then, then certainly into spring.”

Atlantic City currently is serviced by Spirit and United.

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