Some travelers are eagerly waiting the day that PEOPLExpress starts flying given the positive impact its predecessor by the same name had on cheap airplane tickets and cheap vacation packages. The Department of Transportation (DOT) fined the airline because it violated a ban on premature advertising by soliciting memberships for its Club Travelati.
DOT cited the airline for not complying with regulations prohibiting an applicant for new or amended authority from advertising the air transportation covered by its application until the application has been approved by the Department.
PEOPLExpress sold over 130 Club Travelati memberships before suspending sales on March 21st. Inducements to purchase Club Travelati memberships included the promise to be sent ULTRA-LOW discount offers once the airline started flying and discount certificates that could be used toward the purchase of a PEOPLExpress ticket for any scheduled flight or fare.
The airline thought that it had not violated DOT regulations since it included disclaimers in its offer clearly stating that any discount would be in the future and not become available until after the airline had received all needed regulatory approvals.
PEOPLExpress agreed to pay the fine, without admitting violations, because it wanted to avoid litigation and agreed to immediately eliminate all mention of the Club on its website.
The airline hopes to commence flying later this year, but experts have expressed doubt noting that it is difficult for a start-up to clear all of the regulatory and other launch hurdles so quickly.
www.cheapfares.com