When the announcement came out that the PeoplExpress brand was looking to get back into the skies it also included an announcement about a loyalty program, Club Travelati. Customers could sign up as a lifetime member for only $19. In addition to other benefits (including a souvenir pin), the Club promised access to super discounted sales and deals from the carrier once they actually started flying. It turns out that the DoT isn’t so keen on such a marketing approach; the carrier agreed to a $10,000 fine based on the effort.
The company settled with the DoT, admitting no fault, and pulled all content relating to the Club off their website. At issue is whether selling access to discounts is permissible given that the airline cannot actually legally operate flights yet. By enticing customers with discounts for fares that they cannot actually sell the DoT felt that the company violated a couple CFRs. The company has stated they disagree with that position but that they are choosing to avoid litigation in an effort to not derail their pending operational certificate application.
The company has pulled the offer to buy in to the Club from their web site, showing only this now:
Club Travelati is an exciting new club by PEOPLExpress™ for people just like you! We can’t tell you all the details just yet, since we are not yet a certificated airline. But we can tell you it will be fun! Stay tuned here for more details.
Oh, and they apparently only sold about 130 of the $19 memberships since they launched the product per the DoT claim.
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