People Express Airlines Case Study Essay

People Express Airlines Case Study Essay

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People Express Airlines Case Study

Abstract:

In the well documented case of the early low-fare and economy carrier
People Express Airlines (PE) the common explanation for the rapid rise
and decline is excessive corporate growth. Based on a dynamic resource
based, this case finds that it is not only the rate of growth embodied
in the resource buildup processes—which determines the outcome of a
corporate growth strategy.

“Despite the rapidly increasing financial problem by the spring of
1986, PE continued to win praise for its impact on the airlines
industry and the value it offered to customers. But PE was fighting
for market share all over the country. In Denver, United and
Continental were destroying Frontier. Other airlines continued to
entice customers away with low fares and more amenities”, (Pg18,
Holland). People Express (PE)’s low fare and economy strategy did
change in the speed of corporate growth and in other vital strategic
decisions, like implementing a hub and new network and giving service
to major airports but later it went down as PE try to grow faster and
merge with other airlines.

Could people express have been saved? Why or why not?

People Express (PE) was the first airline that was opened in the time
of US airline deregulation back in 70'. People Express was one of the
most impressive business success stories in airlines business, growing
to the nation's fifth largest air carrier by mid 80’s, “In 1985, its
revenue were nearly $1 billion. By the end of...

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