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Airline Buccaneer Donald Burr: People Express Founder Ready to Make A Move

April 2, 1989 GMT

NEW YORK (AP) _ Donald C. Burr built one of the biggest airlines from scratch using ultra- cheap fares to draw millions of customers, only to see his empire collapse six years later. Now he could be ready to make a comeback.

Burr, 47, founder of defunct People Express Airlines, has started to talk to the press after two years of shunning public view. He has re-emerged at a time when Eastern Airlines, paralyzed by a strike and in bankruptcy protection from creditors, is tottering on extinction.

Could Burr be putting himself forward as a ″white knight″ manager to help rescue Eastern, or gearing up to start a new airline to replace it? He’s dodging the question, but circumstantial evidence indicates the answer is yes.

Burr’s formal agreement not to compete against former boss Frank Lorenzo has just effectively expired. Lorenzo, steely chairman of Texas Air Corp. which controls Eastern, bought a battered People Express from Burr in September 1986 for $300 million.

At its zenith in 1985, Newark, N.J.-based People Express was a wildly successful product of airline deregulation, offering discount fares to 150 cities and pulling in more than $1 billion a year in revenue.

″I’m trying to find a way to reinvent the (airline) product again,″ Burr said in an interview.

Besides lecturing at universities and writing a book about People Express during the past two years, Burr said he has informally looked at a few potential new airline deals.

Industry sources say he spoke with Lorenzo before the Eastern strike about the possibility of running the carrier. Burr would only say that he’s had ″conceptual″ talks with the Texas Air chief. Lorenzo has refused to comment.

What if the rebellious unions at Miami-based Eastern approached him to help take over or run the airline? ″I’d have to consider it,″ he said.

Burr talks with evangelical enthusiasm about the airline industry, whether he’s reminiscing about triumphs and travails of People Express or looking forward to the next chapter of deregulation. It’s a talent he’s honed on the lecture circuit, where he commands $10,000 a speech.

″The airlines are on the verge of unprecedented profitability,″ he said, perched on the edge of a chair at the Harvard Club in midtown Manhattan. ″I would love to see the airline industry evolve toward high-commitment service organizations.″

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Burr’s career path, and life, have been closely intertwined with Lorenzo’s -- he even served as best man at Lorenzo’s wedding in 1972. They are only a year apart in age and were both born in May under the sign of Taurus, the bull. Yet their personalities seem poles apart.

With his boyish good looks and disarming ebullience, Burr is a study in contrasts with the gaunt, fierce-looking Lorenzo, who has become a leading target of organized labor because of his avowed anti-union strategies.

Burr, born in suburban South Windsor, Conn., has been described by people in the industry as a preppie entrepreneur. Lorenzo, 48, grew up in tough, street-wise Queens, N.Y.

People familiar with the two personalities find it difficult to imagine Burr working for Lorenzo, which he did twice, and fencing with him in one of the most brutally competitive businesses of the 1980s.

They both attended Harvard Business School, where Lorenzo got his MBA in 1963 and Burr received his in 1965. Burr then went to work as a financial analyst for National Aviation Corp., a New York investment company, while Lorenzo was an analyst for Trans World Airlines Inc. and later for Eastern.

Burr was elected president of National Aviation in 1971 - two years after Lorenzo created Jet Capital Corp., the aircraft leasing company that was to become the core of Texas Air. In 1973, after Lorenzo acquired ailing Texas International Airlines, he recruited Burr, whose National Aviation had been an investor in Lorenzo’s takeover.

Burr became president of Texas International, where he helped Chairman Lorenzo introduce discount ″Peanut Fares″ that revolutionized the industry and made the airline the fastest-growing U.S. carrier.

In January 1980, Burr left Texas International to take advantage of the 1978 deregulation of the industry that let airlines set their own fares and fly where they wished.

He started his own low-cost airline, People Express, which created an enormous new market of air travelers with a pay-on-board, lug-your-own bags approach that made his planes the Greyhound buses of the sky.

After a quick takeoff and supersonic growth, People Express eventually crashed as big competitors undercut Burr’s discount fares to prevent him from taking away their customers. After it was sold to what was now Texas Air in September 1986, Burr went back to work for Lorenzo, but not for long.

He is careful not to join the Lorenzo-bashing that has become so popular. The strongest thing Burr will say about Lorenzo is he’s a ″low-cost warhound.″

Burr says he’s too busy thinking about what he calls ″reinventing the product″ to dwell on the past. But as for whether he’s preparing to fill a void created if Eastern disappears, Burr is evasive.

″I’m after the same thing I’ve been after my whole lifetime,″ he said.

End adv for Sunday, April 2