Hard Landing (23 page)

Burr also wanted employees who were something to look at. People Express was going to introduce the radical notion of cross-employment, in which everyone would have a secondary job. (Lorenzo resolved to attempt the same at New York Air.) Every single employee of People Express would be required to put in time at a job with customer contacts; many, including the
chief financial officer of the company, would hold second jobs as flight attendants. Everybody would have to be good-looking. Burr told his personnel people that although he didn’t demand Rock Hudson looks, every employee at least had to have a “
quality of attractiveness.” Burr, in fact, made it the policy to train everyone as a flight attendant, even if many would never actually perform the role, meaning that no one with a disability could be hired. No one would be coming to work in the North Terminal in a wheelchair.

The idea of job rotation had another virtue: it would prevent the pilots of People Express from becoming aloof and independent, as they were at every other airline. Burr, at bottom, mistrusted pilots. “Pilots have
a character flaw,” he once explained. “They have an innate sense of superiority and entitlement. Aggressive males are drawn to piloting.… It’s heavily left-brain dominant, very well toilet trained.” Rotating pilots into other jobs—accounting, customer service, scheduling, whatever—would keep them focused on the
company as well as the cockpit. “It’s
very disruptive to have them only fly planes. It doesn’t fully use their talents. Therefore, they get unhappy.… They become bad employees.” It went without saying that engaging pilots in the affairs of the company would also make them less prone to unionization.

The recruits received unremitting hours of indoctrination, in which Burr himself conducted much of the training. His tie pulled low, his arms flailing, his feet madly scurrying around the classroom, Burr went on for hours. He would fill the chalkboard with diagrams that looked like football plays. “The guy
thinks he’s John Madden!” one of the skeptics in his class told himself. Drawings of dragons and dragon slayers hung at the front of the class. Business, Burr explained, involved a struggle between good and evil, in which People Express was cast by destiny as a force of good against the evildoers of the airline industry—such as Frank Lorenzo of Texas Air. “
Be Luke Skywalker,” he told them, “not Darth Vader. Ultimately love is stronger than evil.” His training concepts swung from Spielberg to Freud. He would tell people about the glow he felt as a boy walking from his mother’s kitchen after she had said something approving. “When your mother gave
you
that unconditional love,” he would ask managers, “did it make you want to do more, or less?”

They all worked ungodly hours, seventy or eighty a week, to get the airline started. Burr actively promoted office romances. “The greatest thing that can happen to you is to
fall in love at work,” he told them. Some employees thought that Burr, a married father of four, wanted people to conduct extramarital affairs at work in order to loosen their connections to the distraction of home life. He told people that wasn’t what he meant, but office romance became so commonplace that people ultimately began calling People Express the Love Boat.

The company threw a party in a ballroom at the nearby Newark Sheraton the night that the FAA finally awarded People Express its operating certificate, removing the last obstacle to the commencement of operations. It was a raucous event. The
alcohol flowed freely. People sneaked off to the second floor of the hotel to find dark spots to have sex. Others
wept with joy. “It was just a huge emotional release,” Burr would recall of the occasion. And in the midst of it, Don Burr presided like their king, hoisted over the crowd and carried
around on their shoulders. They were his followers. They were his flock. They were almost his disciples.

On August 3, 1981, three months after People Express had conducted its maiden flight, 13,000 of the nation’s air traffic controllers walked off the job.

Under federal law the strike was illegal. President Ronald Reagan ordered the controllers’ union, PATCO, to call off the walkout. The union refused, He ordered the strikers, as individuals, back to work. They refused. Two days later the president fired every last one of them. Reagan’s action would
utterly transform relations between organized labor and managements in the United States. Hollywood would take a hard new line against its unionized writers, professional football against its players. Trucking and other gritty industries would take their most aggressive stands ever against workers. On the day that President Reagan fired the controllers, organized labor began to lose its fangs, and in no industry would that become more apparent than in aviation.

The more immediate effect of the PATCO walkout, however, was disarray, undoubtedly the worst turbulence to hit the airways of America since FDR canceled the postal contracts fifty years earlier. Travel ground to a halt. The government began planning measures to ration airspace—slots—as never before. The government said things would return to normal in a few weeks; then it said the damage would take months to repair. In truth, the airways would never return to normal, not any time in the 20th century.

At the moment the controllers went out, Don Burr and Gerry Gitner, the president of People Express, were in
Germany with their wives, closing the purchase of their second round of refurbished Lufthansa 737s. Burr remained in Germany with his wife while
Gitner and his wife boarded one of the newly purchased planes and headed for Newark, the only passengers on board. “
Come up with a new plan,” Burr told him, “or we’re dead.”

Newark was closed due to the strike when the plane arrived; the plane was permitted to land only because it was a ferry flight. The next day, a Sunday, 35-year-old Gitner cleared off the
dining room table at his home in Morristown, New Jersey, and with a few other executives began to consider a way out of the disaster. In addition to
coping with a cutback of their already meager, four-plane operation at Newark, he had to find a way to deal with the new incoming airplanes. Refusing the airplane deliveries was no option; People Express had a $7-million letter of credit in Lufthansa’s hands, serving as a performance bond; if the planes were not received on schedule, People Express would have to make good for the full amount. In that case a bankruptcy filing would not be
out of the question.

There was only one solution, Gitner realized: “bypass routes,” as he called them, flying not into Newark but to altogether different cities where slot restrictions had not taken hold. But where?

Gitner wanted to fly to places that fit the People Express formula: markets that could be stimulated by low fares. Florida, the ultimate discretionary destination, as price-sensitive a market as existed anywhere, was as good a place as any to try—not Miami, obviously, because it was a busy airport suffering along with the other major airports in the country. But what about Jacksonville? Sarasota?

Where to fly from? Buffalo, Gitner declared; Canadians loved Florida, and People Express could capture Toronto traffic from there. And why not Columbus? No airline had ever flown nonstop from Columbus to Florida.

There were a few small technical problems with Gitner’s bypass scheme. For one thing it was August, not exactly the height of the tourist season in Florida. For another the incoming airplanes were configured all wrong for the flights. Florida was a three-hour trip, not the one-hour jaunt the planes had been ordered for. The ratio of lavatories to seats was inadequate. The People Express no-free-food formula didn’t work nearly so well on a flight three times longer than the founders had planned.

But those were details, and this was a desperate case. The plan went into action—and worked, like a miracle. The people of Columbus and Buffalo and Toronto loved the idea of an ultracheap nonstop flight to Florida, even if it wasn’t Miami, even if the sun was at its most unbearable intensity of the year. It was still Florida. Gitner had saved the day. And even though Newark service was gradually restored, Don Burr quickly learned, to the everlasting chagrin of a few other airlines, that Florida was a People Express kind of market.

• • •

People Express promoted itself as the way to “fly smart,” taking some inspiration from the Volkswagen as the car with cachet. It worked. Ted
Kennedy and his niece Caroline, the daughter of John Kennedy, flew People Express. Actor Christopher Reeve, at the height of his Superman fame, was another conspicuous customer. The masses followed.

In Columbus, Ohio, the company drew so many baggage-laden passengers—because there was no free baggage checking on People Express—that they actually wore the airport carpet threadbare. When service was added to Burlington, Vermont, thousands of
Montreal residents, balking at the prohibitive fares charged by heavily regulated Canadian airlines, began driving the 100 miles to Burlington in order to catch People Express to Newark or Florida. People Express was consistently filling its planes and doing so without the benefit of a computer reservations system, a stunning feat. Burr, in fact, stubbornly
eschewed such technology, relegating it to the category of high-cost indulgences. If someone wanted to make a reservation on People Express, he or she could call People Express, bypassing travel agents and computer reservation systems altogether.

Burr’s people genuflected at his every command—except for the president of People Express. Gerry Gitner was soon chafing badly under Burr. Gitner began to fear the company was growing too fast. He thought that fares were too low. The two men fought, “
for hours, days, and weeks,” as Burr later described it.

Gitner’s discomfort was evident when Burr attempted to establish rules for the unorthodoxy ruling People Express. Burr wanted to record a simple list of powerful rules—guidelines against which every employee of People Express would be required to judge his or her decisions. These were to be called the Precepts. They would, Burr declared, become
the gospel of People Express. People Express would create a better world. People Express would bring happiness to passengers—correction, make that
customers
. It was devoted to profit making, yes, but only as a consequence of doing good works. So far as Burr cared, the pilots could fly the planes upside down, so long as they followed the Precepts.

Surrounded by his top executives, Burr excitedly scrawled out the Precepts on big sheets of paper, which he taped to the walls.

The Precepts, in and of themselves, all made perfect sense. But it was the way in which Burr compiled them, the way he handed them down, that so irritated Gitner. It was almost as if he were chiseling into stone tablets, almost as if he were handing down commandments, except that his numbered six rather than ten. Gitner watched incredulously as the day wore on, Burr becoming more animated, gesturing widely. Within weeks, Gitner had quit.

Anxiety hung heavily over the resignation of the founding president, but Burr assured his flock that they should not read anything untoward in Gitner’s departure. “
Gerry loves planning,” Burr explained, “and that’s already done at People Express.”

In times of regulation and not, there have always been three ways to expand an airline.

The most direct means is acquisition, as Frank Lorenzo had attempted, unsuccessfully, with National, Continental, and TWA. Because they arc built on unique economic foundations and strong internal cultures, however, any two airlines may mix poorly. Pan Am, the victor in the National takeover drama, quickly found it had committed one of history’s most disastrous mergers. Pan Am employees looked down their noses at the National people; the National people thought the Pan Am veterans were conceited. In the back-office accounting operation, Pan Am people simply threw National ticket stubs on the floor, to be swept up at the end of the day. National people resented wearing Pan Am uniforms. Both groups spent so much time scowling at each other that they forgot to smile for their passengers. On-time performance plunged. In the interests of equality, Pan Am had to increase pay and benefits for the former National workers, making the acquisition more costly than ever. On top of everything else, National’s north-south routes were running in the
wrong direction to give Pan Am the passenger feed it needed to Asia and Europe.

The second avenue of expansion involves creating altogether new markets. Texas International, Southwest, and American with its super saver fares had each succeeded in using low prices to stimulate new business and to do so profitably, though only on a few routes, or only within a single state, or only on a selected number of seats per airplane. People Express was now putting the concept to its fullest test, although it too was beginning from a small base. As successful as these experiments were, they were vastly overwhelmed by the intractable recession of the early 1980s. In 1980, the year that the upstarts came into being, the airlines of the United States carried 297 million people—a decline from 317 million the year before. In 1981 the total fell even further, to 286 million.

The shrinking national airline market added value to the third method of expanding an airline: taking territory by force. Here too, as New York Air was proving against the Eastern shuttle, the means involved price. Though that battle was raging in only a single market (between New York and Washington) the moral was clear: the entrenched carriers of commercial aviation, even the Big Four, were not immune to the upstarts.