PORT AUTHORITY THROUGH THE DECADES #2
Archived news stories of the airport community
People Fights Back
Refocuses on ‘Growing’Newark Business
BY ROBERT CUBBEDGE
Free at last from the albatross
that was Frontier Airlines,
People Express moved
swiftly last month to refurbish
its tarnished image,
to regain its place as one of
America’s premier airlines.
Steps being taken to accomplish
these ends included:
• The refitting of People’s
entire fleet of 727s and 737s
with plush new leather interiors,
including for the first
time both first class and business
class seating.
• A complete restructuring
of People fares to reflect its
new premium service as well
as its new supersaver fare—
a so called Q-farc for passengers
who buy their tickets at
least two weeks in advance.
• A pledge to continue to
speed the construction of
People’s new $ 175 million
passenger station at Newark
Airport’s Terminal C, a facility
expected to be among the
finest in the world when completed
next year.
• A public statement
from People chairman Donald
Burr saying the sale of
Frontier to United Airlines-
“strengthens substantially
our financial position and
flexibility, making us more
competitive...and allows our
managers to refocus their
time on the business we continue
to build at Newark."
All this, and more, Burr
was expected to reiterate at
People’s annual stockholders
mcctingJuly31 atthe Airport
International Plaza building
in Newark.
Whether he would get a
standing ovation there, as he
did when he first announced
the United deal to People employees,
remained to be seen.
Approval of the sale—for
$ 146 million, said to include
a clear profit of $46 million—
2021 AIRPORT V 36 OICE WOMAN OF ACHIEVEMENT
was nevertheless seen as a
foregone conclusion.
Not only would it cut People’s
losses; it would also provide
the airline with an infusion
of $50 million in cash,
money badly needed to avert
an imminent cash flow crisis
—perhaps even bankruptcy.
The alternative, moreover,
was unthinkable—that being
the sale of not just Frontier
but the entire People Express
airline to union-buster Frank
Lorenzo of Texas Air.
In the end, it was indeed
the five labor unions at Frontier
that played a key role
in delivering the carrier to
United rather than Texas Air.
When Frontier was sold
to People just last year, the
unions had insisted on a
'clause in their contracts saying
the airline could not be
resold to Texas Air. If that
were to happen now, they indicated,
they would have no
recourse but to go to court.
“1 he legal outcome was by
no means clear,"said James
C. Freund, a partner of Skadden,
Arps, Slate & Flom, who
represented People in the negotiations.
The big question—as yet
unanswered, though—was
whether People could still
come back after its tremendous
losses of the past six
months.
Burr had clearly staked
his future on an effort to convert
People from the cut-rate
carrier it used to be into the
full-service carrier that it
apparently needs to be in today’s
market.
Port’s ‘State of the Airports’Report
The following is a comment
on the slate of New
York's three major airports,
as published last month in
the Port Authority's annual
report for 1989.
The three regional airports
accommodated more
than 74 million travelers and
retained their status as the
nation's leading gateway, although
total passenger traffic
was 4.5 percent below 1988.
The decline was primarily
in domestic traffic, due
mainly to the extended Eastern
Airlines strike, a lesser
availability of discount tickets
and other structural
changes within the airline industry.
LaGuardia and Kennedy
Airports experienced domestic
passenger traffic declines
of about 5 percent each–and
Newark Airport, about 10 percent.
Aviation activities that
helped improve our competitive
position in 1989:
• In June, a new $11 million
interim International
Arrivals Facility was opened
at Newark's Terminal В following
a construction period
of only 114 days. By year's end.
10 airlines were providing international
service and several
others were planning to
introduce scheduled overseas
flights in the spring of 1990.
• The Port Authority authorized
an
agreement with Continental
Airlines for the construction
and operation of a
150,000-square-foot, $21 million
flight kitchen at Newark,
providing 300 new permanent
jobs. It is expected to be operational
in early 1990.
• Efforts continued to
improve transportation
between the suburbs and
airports, as well as intraairport
traffic flow. This included
continued assistance
for the first satellite ground
transportation service
("park-and-fly"), between
Ridgewood, NJ., and Newark,
which began operations
in 1988. The Port Authority
also established the JFK E-Z
Rider program, a car-pool
and transit information service
for aircraft employees,
to reduce roadway congestion
on-airport and in the
immediate vicinity of Kennedy
Airport.
• An agreement was reach
with Japan Airlines under
which the carrier will lease
and expand Kennedy's Building
14 at a cost of $100 million,
thereby increasing the
carrier's already large air
cargo capacity at the airport.
I he agreement will also allow
many of its own airport operations
at the enlarged building.
• Expansion of the U.S.
Customs Hall in the International
Arrivals Building at
Kennedy began early in the
year. When completed in mid-
1990. the
expansion will further reduce
the time required for
travelers to clear Customs.
• In a national "first" during
the year, Trans World Airlines
began using a thermal
neutron scanner on a test basis
at its passenger terminal
at Kennedy. Intended to toil
terrorists, the scanner was
installed in September and is
the first detection system for
explosives to receive Federal
Aviation Administration approval.
• At LaGuardia Airport,
the Trump Shuttle, formerly
the Eastern Shuttle, began
operations. By year's end.
the Trump Shuttle had added
connecting helicopter service
to the Port Authority's
Downtown Manhattan Heliport
adjacent to the Wali
Street financial district, and
had become well established
in its competition with the
Pan Shuttle to Boston and
Washington. D.C.
Substantial progress was
made on a number of redevelopment
projects and service
improvements at all three airports
to meet the increased
traffic demands of the 1990s
and beyond. Capital expenditures
during 1989 tptalcd
about $243 billion.
In March, the Port Authority's
board of commissioners
authorized work to begin on
JFK 2000. a major redevelopment
program at Kennedy
Airport.
Construction projects underway
include new roadways
and the airport's new $65 million
control tower. Ground
was also broken for the East
Parking Garage, which will
support a future hotel.
Authorizations were made
during 1989 to improve aircraft
taxiways at both Kennedy
and Newark Airports.
These included a $54 million
project to relocate two taxiways
at Kennedy to expedite
aircraft ground movement
and provide more space for
aircraft parking.
People Express, one of the first discount airlines. (Airport Press 1986)