Continental Airlines to Withdraw 69 Aircraft From ExpressJet Airlines, Inc.

[Paul]

Continental Airlines (NYSE: CAL) today announced that it has given notice it will withdraw 69 of 274 regional jet aircraft from its capacity purchase agreement with ExpressJet Holdings, Inc. (NYSE: XJT) and ExpressJet Airlines, Inc. (ExpressJet). ExpressJet is currently the exclusive operator of regional jet services for Continental Airlines.

Continental will request proposals from numerous regional jet operators to provide regional jet service to replace the withdrawn capacity. The transition of service from ExpressJet to a new operator is expected to begin in January 2007 and be completed during the summer of 2007.

Continental is withdrawing the 69 aircraft under its capacity purchase agreement with ExpressJet, as permitted under that agreement, because Continental believes the rates charged by ExpressJet to Continental for regional capacity are above the current market.

News Release

 

[coolflyingfool]

Doesn't CO own a vast majority of Expressjet?

 

[jimntx]

No. According to Yahoo-Reuters article this morning (see link below), Continental now owns only 8.6% of the common stock. They sold off their majority owner interest a year or two ago.

Related article

 

[USAir757]

Anyone know how much of Continental's capacity is flown by ExpressJet?

 

[BoeingBoy]

In Dec, CAL flew 9 billion consolidated ASM's while ExpressJet flew just over 1 billion ASM's, or approximately 11%.

Jim

 

[Borescope]

Anyone know how much of Continental's capacity is flown by ExpressJet?

It seems that this is just a way to force Expressjet to renegotiate the capacity agreement. They don't want to have to lay off all those people, so I would bet they will reach some agreement. Unfortunately that will probably mean coming out of the hides of the employees. If not, Cal will just find some other carrier to fill the vacant capacity.

 

[FWAAA]

It seems that this is just a way to force Expressjet to renegotiate the capacity agreement. They don't want to have to lay off all those people, so I would bet they will reach some agreement. Unfortunately that will probably mean coming out of the hides of the employees. If not, Cal will just find some other carrier to fill the vacant capacity.

Well, maybe you're right. Then again, Atlantic Coast probably thought that UAL was bluffing and it was pretty confident it could find a profitable use for all those stupid 50 seaters. B)

 

[Borescope]

Well, maybe you're right. Then again, Atlantic Coast probably thought that UAL was bluffing and it was pretty confident it could find a profitable use for all those stupid 50 seaters. B)

You may be right. Express may just give up the jets. In that case Cal just gives the airplanes back to the lease company and find some other carrier like Mesa who is willing to throw some fresh paint on some of their planes. If that's the case the small end of the senority list will see their "dream" job go up in smoke and end up back at the local FBO as an instructor.

 

[coolflyingfool]

I am thinking that with all of FLYI's Rjs sitting around, now would be a good time to try and negotiate a lower lease rate on these RJs. just my thoughts.........