Word: burr
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Dates: during 1980-1989
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...wings of high-flying People Express had been drooping under the heat of intense competition. In the first six months of 1986, the revolutionary discount airline lost an estimated $103 million, an alarming deterioration compared with a $5.7 million deficit for the same period last year. Finally, said Donald Burr, 45, People's founder and visionary chairman, "we had to do something." Last week Burr did. In a tersely worded statement he announced the possible upcoming sale of part, "or under certain circumstances even all," of the country's fifth-largest airline, which had 1985 revenues of nearly $1 billion...
...interview with TIME, Burr clarified his position, declaring that "it's not really my intention to sell the whole airline. First we'll sell some assets and cut our costs." He added, "We've been tested before. We'll find a way to deal with this setback too." The stock market, however, ( remained skeptical. People stock, which had been trading fitfully in the $9 range since January, was pummeled in the past two weeks on Wall Street down as low as $4.88. Five days after Burr's announcement, People shares closed at only $6.75. There was considerable irony...
...million last year. But People bought planes and added flights so rapidly that the percentage of seating capacity used dipped from a 1983 high of 75% to an average so far this year of 60%. The company needs to fill 65% of its seats to break even. As Burr puts it, "Right now we're simply offering more than the public wants...
...Burr saw rapid growth as a survival tactic in an air-transportation market dominated by bigger rivals. No other U.S. airline, though, has ever expanded as quickly as People. Burr was confident in the price advantage that People's low-wage, nonunionized employees produced over other carriers: 5.28 cents to fly a passenger one mile last year, vs. the industry average of 8.6 cents. He was overly blithe as he pushed his company into Atlanta and Dallas/Fort Worth, the territory of two major rivals, Delta and American. People gained size but it failed to gain strength...
...still resembles a bus terminal at rush hour. A replacement facility is a year to 18 months away from completion. Horror stories have spread along the discount-fare grapevine of endemic baggage losses on People flights and of travelers stranded for hours in Newark, Denver or San Francisco. Chairman Burr protests that "we're as professional as any airline out there," but the stories have evidently hurt. One People way of fighting back: a two-month-old frequent-flyer program known as Travel Reward, which awards free flights to steady customers in the same manner as standard airlines...