People Express Airlines Case Study

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...