The Regional Air Service Enhancement Committee approved a $500,000 short-term, refundable loan at its meeting last week for PEOPLExpress, an airline that is looking to fill the void left behind by AirTran at Newport News/Williamsburg International Airport.
The loan was authorized so that PEOPLExpress can make a refundable deposit toward an unspecified airline that they are looking at acquiring, said Florence Kingston, the chair of the RAISE Committee. The money is earmarked for an escrow account, but whether they buy the airline or not, the money will be returned to the committee.
There is no interest for the loan, Kingston said. She said the purpose of the loan is to ensure PEOPLExpress can make a deposit that will enable them to look at the books and existing contracts of the carrier in talks to be purchased.
“This appears to be the quickest route to getting service back to Newport News/Williamsburg,” Kingston said. “We recognize that it has the potential and the opportunity and that’s why we felt like it was important to demonstrate that the community is behind [PEOPLExpress].”
AirTran stopped service from the airport in March 2012. You can read more about that here. In August 2011, Jessica Wharton, spokesman for the airport, said that AirTran was 43 percent of the airport’s market in 2010. Losing AirTran was a big blow to the airport, and the hope is that PEOPLExpress can fill in the space it left behind. The airport would serve as the headquarters for PEOPLExpress.
According to statistics in approved minutes from a September 2012 meeting of the Peninsula Airport Commission, there were 53,241 passengers served in August 2012 versus 102,624 passengers in August 2011, when AirTran still provided service. Both Richmond and Norfolk both experienced an uptick in passengers for that month while passengers were down 48.1 percent for Newport News/Williamsburg.
“The economic impact [to Hampton Roads from PEOPLExpress] is significant,” said Mike Morisi, President of PEOPLExpress. Morisi said that each person who flies to Hampton Roads is worth about $700 to the local community, citing expenditures at restaurants and hotels. He said PEOPLExpress will fly 250,000 to 300,000 people in the first year that service is offered at the airport.
“[PEOPLExpress] provides an opportunity for people to be able to fly on a low fare to cities that don’t currently have non-stop service or where the existing service was very expensive,” Morisi said.
Morisi said that it’s possible PEOPLExpress will close on an unspecified airline on Feb. 28, which would enable PEOPLExpress to begin offering service likely by Memorial Day. The plan calls for the airline to fly 737s, which can seat around 150 people. They would fly to cities in the Northeast and Florida.
“We’re thrilled,” Morisi said. “The RAISE Committee has been very supportive and easy to work with. In my mind it’s the perfect opportunity for a public-private partnership that will stimulate the economic conditions of the peninsula in a positive way.”
Morisi said that PEOPLExpress would create up to 250 jobs at the airport, including many that he characterized as “well-paying salary positions.” He said that the airline would need to hire pilots, customer service professionals, maintenance personnel, executive team members and some entry-level positions.
PEOPLExpress had explored buying planes and getting an air operator’s certificate, though that process could have taken up to 18 months. By purchasing an existing carrier, PEOPLExpress can bypass part of the long, regulatory road that leads to a new certificate.
The RAISE Committee is comprised of economic development directors from Newport News, Hampton, Williamsburg, James City County, York County, Gloucester and Poquoson. News broke in February 2012 that PEOPLExpress was interested in starting operations at Newport News/Williamsburg International Airport. You can read about that here.
