The company was started by Don Burr, who resigned from Frank Lorenzo's Texas International in order to do so. Terminal space was leased at Newark Airport's long abandoned North Terminal. The terminal upper levels were used as corporate headquarters in order to save money.
People Express was launched on April 30, 1981 with service from Newark to Buffalo, NY, Columbus, OH and Norfolk, VA.
The airline grew rapidly and by 1986 was the United States' fifth largest airline. In 1985 Frontier Airlines was aquired.
However the airline had overexpanded and lost focus. Other airlines were now matching the company's low fares. Texas International purchased the company February 1, 1987 and merged its operations into Continental Airlines.