Bitter Victories

People Express founder Donald Burr has it all: fame, fortune, and the fastest-growing airline in history. But that's old news. Here, Burr talks candidly about the personal price of his triumphs.

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We all have to choose, someone once said, between perfection of life and perfection of work. At People Express Airlines Inc., the founding father wants both -- for everybody.

Of all the legends of recent American entrepreneurship, Donald Burr's is one of the most astonishing. In four years, he has built an airline, the ninth largest in the United States, which last spring reached the $1-billion mark in annualized revenues. Starting with 250 employees, the airline now has about 4,000. Starting with 3 used Boeing 737s, the airline now has 22 737s, 45 727s, and four 747s, which carry a million passengers a month to 39 cities in America and to one abroad, London. Starting with a verminous, empty terminal in Newark, N.J., the carrier now boasts a facility that, if not the most elegant in the industry, is certainly the most colorful, teeming with mobile Americans of every description, all eager to take advantage of Donald Burr's realization of a great idea: the discount airline.

Growth like that would be dizzying in Silicon Valley; in the transportation industry, it approaches the miraculous. Yet even so, the legend of Donald Burr only begins with growth. The rest of it, fittingly, is about people, and the transformation Burr is trying to bring about in the way people work together. People Express has been called an "aerial 'Love Boat," because so many of its employees seem to strike up relationships there, and because so many of its customers seem to be traveling to see their loved ones. Putting it less romantically, one employee recently said of his job with People Express, "This is my road to self-actualization."

Such fervor is unlikely to be stimulated by a no-frills pricing policy, or even by unprecedented success in the marketplace. Where it comes from, Donald Burr believes, is an approach to human resources that enshrines self-management and voluntary cooperation. At People Express, every effort is made to eradicate or suppress the two most sacrosanct characteristics of organized work: hierarchy and specialization. There is no working class at People Express, no executive class. Everyone is a manager, and everyone (even the pilots, who are called "flight managers") does a regularly scheduled turn at everyone else's work. With this policy, called "cross utilization," Burr seems to be trying to reinstate the ancient ideal of the well-rounded man. With the company's stock-participation policy -- every employee is required to purchase some stock, if necessary with a no-interest loan from the company itself -- he seems to be trying to realize the equally ancient ideal of a commonwealth, in which each member acquires the pride and energy of an owner. Thirty-three percent of the airline is employee-owned, and the rags-to-riches stories that its success has made possible among the employees are all part of Burr's legend.

Burr denies that he is conducting a "social experiment" at People Express. "It's a hard-driving, capitalist business," he says to everyone, celebrant and skeptic alike. And there is no reason to doubt his sincerity about this, or his fiercely competitive concern for the bottom line. Yet the adjectives Burr seems to attract are not those favorites of the typical hard-driving capitalist: ruthless, shrewd, or hard-nosed. Much more often, he is called "charismatic," "messianic," or "fervent." And he does nothing to contradict these judgments when he avows (as he did recently in Time magazine's "Man of the Year" profile), "You don't just want to make a buck. You want people to become better people."

The skeptics have become more numerous recently -- in the media, on Wall Street, and even within the great people-centered undertaking of People Express itself. Doubts seem to have been triggered by the late 1984-early 1985 operating losses, followed by a plunge in the company's stock price from a high of 25 to below 10. The setback stemmed in large part from an inevitable ratcheting-up of the competition, as the more traditional airlines learned to slash prices almost as well as People Express. Nevertheless, there was an edge to the skepticism, a note of jeering raillery, that caught INC.'s attention. Contributing editor Lucien Rhodes had written about People Express a year and a half ago, long before Burr achieved the status of a legend (see "That Daring Young Man and His Flying Machines," January 1984); so we felt somewhat solicitous of this new turn in the entrepreneur's reputation. In June -- in the midst of a strike at United Airlines Inc. and intense bidding for Trans World Airlines Inc. -- George Gendron, INC. editor, dropped in on Burr at his Newark, N.J., office. His report follows.

One wall of Burr's office is a large window looking out on the runway. Alone among airline presidents, I imagine, he can actually see his customers lining up for the service he provides. The travelers who fly from Newark must still walk onto the runway before boarding, and some flights still use those old-fashioned ladders that unfold out of the belly of the aircraft. He can even see customers through the other window in his office. It overlooks the lobby of the North Terminal, the scene of those now-famous crowds waiting for the London flight. And far in the distance, beyond the runways, he can see the site of the new People Express terminal that, when finished, will be the largest single-airline facility in the country.

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