ExpressJet Retains 69 Planes, Set 2006 Rates

ExpressJet will pay higher lease payment to keep RJs as its only fleet. Last month, Continental had picked Chautauqua to fly these same planes.


HOUSTON -- ExpressJet Holdings on May 5 announced that it delivered notice to Continental Airlines that ExpressJet would retain all of the 69 aircraft being released from the company's capacity purchase agreement with Continental. The company previously announced in December 2005 that Continental elected to reduce the number of aircraft covered by the agreement and that ExpressJet could elect either to retain aircraft or return them to Continental.

The transition of these aircraft from the capacity purchase agreement is scheduled to begin in December 2006 and to be complete by June 2007. The company intends to utilize the 25 ERJ-145LR aircraft and 44 ERJ-145XR aircraft to pursue various strategic options outside the capacity purchase agreement.

The company also announced that in April it concluded negotiations with Continental to revise the scheduled block hour rates for 2006 under the capacity purchase agreement. Consistent with the 2005 rates, ExpressJet will continue to receive payment for each scheduled block hour in accordance with a formula designed to provide it with an operating margin of 10 percent for its Continental Express operations. The rates are retroactive to January 1, 2006.


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