HOUSTON, Jan. 24 -- ExpressJet Airlines, a unit of ExpressJet Holdings, plans to launch it own service this spring, apart of the flying is has been doing for Continental Airlines.
In April it will begin service to the first of 24 West, Midwest and Southeast cities. Branded as ExpressJet Airlines, the carrier will begin selling tickets on Feb. 1.
The carrier will use 44 Embraer 145 to markets that are sized appropriately for these aircraft and typically do not have direct flight options today. It has not disclosed the markets it will serve.
Product features on the 50-seat regional jets will include free XM Satellite radio with over 100 channels of programming, advanced seat assignments with no middle seats and complimentary snacks and meals on longer flights.
"With 80% of our fleet committed to capacity purchase agreements, allocating 20% into markets that offer more strategic control and a greater potential for future growth is the right mix for ExpressJet," said CEO Jim Ream
In addition, to its new branded service, the company launched a Corporate Aviation division. It operated its inaugural charter flight on Dec. 31 and to date has flown 205 segments and 276 block hours. Six aircraft are currently operating in the Corporate Aviation division, and the company intends to grow the charter fleet to 15 aircraft.
With its flying for Continental now limited, ExpressJet continued discussions with a prospective U.S. partner to operate ten EMB-145XR aircraft under a capacity purchase agreement. ExpressJet expects to complete these negotiations during first quarter 2007 and to make an announcement once definitive agreements are executed.
During the fourth quarter, ExpressJet finalized its plans for the 69 aircraft that will be released from its capacity purchase agreement with Continental Airlines in 2007.
ExpressJet and Continental have been unable to agree on rates for 2007 and are submitting their disagreements to binding arbitration in accordance with the terms of the capacity purchase agreement. The agreement sets forth procedures and a schedule that will likely result in a hearing and issuance of a final decision by the arbitration panel in the late second or early third quarter of 2007.
ExpressJet will continue to be paid under the 2006 block hour rates during the arbitration and expects the decision setting the revised rate structure to be retroactive to January 1, 2007. ExpressJet does not intend to issue any reports on the progress of the arbitration until the panel issues its final decision.
ExpressJet reported fourth quarter net income of $22.8 million, or $0.39 diluted earnings per share. For the year ended December 31, 2006, net income totaled $92.6 million, or $1.56 diluted earnings per share.
ExpressJet turned in outstanding operating results during the quarter as evidenced by a 100% completion rate on eight days during the busy holiday travel season, and ended the quarter with a total controllable completion factor of 99.9%, excluding cancellations for weather and air traffic control.
SOURCE ExpressJet Holdings, Inc.
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