ExpressJet Offering Service to 24 New Cities

The carrier has not announced which cities it will service. However, it did say they would be in the West, Midwest and Southeast cities.

One lesson from Independence Air is that there is a market for used 50-seat RJs, Abbey said. ExpressJet should be able to adequately price its service since it is an experienced operator of the Embraer. There is no indication that ExpressJet intends to run its new service as a low-cost carrier, Abbey noted.

The ExpressJet fleet will have a range of about 2,000 miles. The ExpressJet aircraft will be refurbished to include free XM Satellite radio with more than 100 channels of programming, advanced seat assignments with no middle seats and complimentary snacks and meals on longer flights.

The 44 aircraft should become available to ExpressJet over the next six months. Continental has hired Republic Airways' Chautauqua to replace ExpressJet on some routes. Chautauqua will provide the Continental Express service using 44 of its own RJs -- both Embraers and Bombardier CRJs.

Continental subleases to ExpressJet all 274 Embraers that the regional carrier has been flying.

Apart from its new solo service, ExpressJet continues discussions with a prospective U.S. partner to operate 10 Embraer 145XRs 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.

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