The next year was a breathless, nonstop, near-miracle of activity: raising money, finding planes, finding an airport, preparing documents, recruiting and training personnel, selecting routes, and working out schedules. Three people could never have done it, but, as Burr spread the word, more of his Texas International colleagues began signing up. There was Harold "Hap" Pareti, 35, his former legal counsel, now managing officer for flight operations and legal and government affairs; Lori Dubose, 31, managing officer who is in charge of recruitment and training and in-flight service; and Bob McAdoo, 38, his former controller and now chief financial officer. By December of 1980, some 15 former Texas International executives and managers had joined the People Express startup team, and Burr, at 39, was the oldest member.
In July, People Express became the first airline to apply to the CAB for permission to form a new airline since the passage of the 1978 Airline Deregulation Act. Although the 200-page required document filed with the CAB stated that the company intended to raise roughly $5 million and lease a few planes to fly out of Newark ontil it had made enough money to buy planes, Burr had already begun work on a larger concept.
People Express chose to fly its planes in a configuration known as the "hub and spoke." All flights would make round trips between a single point (the "spokes") and a single terminal (the "hub"). "Among other advantages," Burr says, "a good hub-and-spoke operation is like a fortress because you can control the traffic at that terminal and shut out competition." But with only three leased planes as outlined to the CAB, People Express could hardly boast of being impregnable. Burr wanted to establish a large and immediate presence in the marketplace, and it would cost a lot more than $5 million. Fortunately, in August 1980, Bill Hambrecht of Hambrecht & Quist, the San Francisco -- based investment firm, took Burr to lunch at the University Club in New York City.
Hambrecht was eager to meet Don Burr. He had heard about Burr's plans through a mutual friend and had already done some research on his own. Burr, on his side, intended to ask Hambrecht to take People Express public immediately even though no airline had ever gone public to raise start-up money. They lunched amiably for about 45 minutes, swapping stories about finance and Wall Street. Then Hambrecht announced that he had to leave for an appointment, and Burr choked on his food. "I was horrified," Burr says. "We'd been doing all this talking, and I hadn't even described my proposal. So I blurted it out. He asked me a few questions and agreed. I nearly fell off my chair." Says Hambrecht, "The whole thing made a lot of sense to me -- fast turnaround, low fares. I've always felt that in a climate of deregulation, low-cost newcomers have a great opportunity because the old companies usually hate to give away their price monopoly, they're slow to adjust to the new competition." Burr was ecstatic. "When I walked out of there," he says, "I could've touched the moon."
Later that month, Burr showed up at Newark International Airport for the first time. Although Burr had designated Newark as the People Express airport, he had only read that space was available; the actual details were far from certain. "I didn't know Newark from my elbow," he says. "Actually, I kinda liked San Francisco."
John J. Dickerson Jr., the general manager of New Jersey airports, had already heard the story many times before Burr ever knocked on his door. Deregulation had spawned a small army of would-be airline operators Some had only great ambitions and never showed up, but some had great ambitions and planes and never showed up. "We were almost going to put up a scorecard," Dickerson says. One operator had even gotten so far as to move into the office Burr now occupies. He went bust so fast that he left his furniture behind.
Dickerson explained that the first airport terminal constructed by the Port Authority of New York and New jersey, the North Terminal, had been largely vacant since 1973, when the airlines quartered there moved to two newly built terminals. When he saw it, Burr's normal effervescence temporarily went flat. "It was a ghost town," he says. "What didn't fall on your head bit you in the ankle." But it was right in the heart of the brisk airline traffic of the New York/Newark metropolitan area. Burr said he would take it.
No sooner had Burr left Dickerson's office than he was hit by a crushing anxiety attack, and he rushed to a phone booth to call Bill Hambrecht. "I know it was foolish," Burr says, "but everything hit me all at once. There I was at Newark airport renting space. I mean, I was really starting an airline. I guess I panicked about the money." "We shook hands," Hambrecht told him. "We'll do our best."
