ExpressJet Reports Fourth Quarter and Full-Year 2009 Financial Results

In fourth quarter 2009, ExpressJet generated 2 billion revenue passenger miles on 2.6 billion available seat miles producing a load factor of 78.2% under its agreement with Continental.

For the full-year 2009, ExpressJet flew 656,790 block hours as Continental Express compared to 686,684 during the same period in 2008. Full-year results for the Continental Express operation totaled 7.8 billion revenue passenger miles and 10.1 billion available seat miles equating to a load factor of 77.4%.

Corporate Aviation (charter)

ExpressJet flew 2,402 block hours during the fourth quarter, which is historically a seasonally weaker quarter for Corporate Aviation (charter). Utilization (calculated as percentage of days the aircraft is used for customers) declined from an average of 38% during third quarter 2009 to 33% during fourth quarter 2009. ExpressJet expects this trend to improve as aircraft transition from the Corporate Aviation (charter) operation to higher utilization flying as United Express. During the quarter, ExpressJet operated 30 aircraft within its Corporate Aviation (charter) division, including eight 41-seat aircraft.

Block hours generated within Corporate Aviation (charter) for the twelve months ending December 31, 2009 totaled 18,871, including 9,622 block hours flown for United during a short-term summer flying arrangement.

Aviation Services

During the quarter, ExpressJet added two new ground handling contracts and now has a total of 42 contracts at 30 stations. Total activity during the quarter as measured by aircraft turns was 19,137. ExpressJet also began an aircraft cleaning contract for Continental operations within Terminal B at George Bush Intercontinental Airport during December.

All Flying

ExpressJet operated a total of 244 aircraft during 2009. ExpressJet expects its 2010 fleet to equal 244 fifty-seat aircraft allocated as follows:

Financial Overview

ExpressJet generated $168.8 million in revenue during the three months ended December 31, 2009 versus $160.5 million for the three months ended December 31, 2008. This 5.1% improvement stems primarily from increases in both block hours and utilization of approximately 7%.

Under the capacity purchase agreement, Continental paid ExpressJet $148.6 million in block hour revenue and pass-through expense reimbursements for fourth quarter 2009 versus $142 million in fourth quarter 2008. The fourth quarter 2009 payment is net of a $1.1 million incentive to Continental for increased utilization during the quarter. ExpressJet expects to incur an additional $8.9 million in settlement revenue payments to Continental during 2010 and 2011 as utilization improves. ExpressJet also experienced additional pressure from the block hour revenue adjustment on the first anniversary of the amended capacity purchase agreement with Continental. The block hour revenue rate Continental pays ExpressJet increased by only 2% versus the historical inflationary increase of 3% seen over the last five years.

Revenue earned during the fourth quarter 2009 in the Corporate Aviation (charter) division totaled $9.8 million. This revenue does not include revenues generated from the United Express operation. Revenue earned by operating as United Express during December 2009 was recorded as passenger revenue due to the anticipated execution of the multi-year arrangement with United that occurred on February 17 and had an effective date of December 1, 2009. Fourth quarter revenue from aviation services (ground handling and other) totaled $8.1 million versus $9.4 million in fourth quarter 2008 primarily because ExpressJet sold a composite business during 2009.

For the full-year 2009, ExpressJet earned $688.2 million in revenue, including $597.4 million in passenger revenue for scheduled flying, $56.7 million through Corporate Aviation (charter) flying and $34.1 million in aviation services.

ExpressJet ended 2009 with $107.8 million in cash, cash equivalents and short-term investments. The cash balance included $17.7 million in restricted cash and $9.1 million in short-term investments, primarily auction rate securities, after accounting adjustments to impair the value of these assets.