ExpressJet Reports Loss

Citing the transition of 30 aircraft into both its new Delta Connection operation which began June 1 and the continued building of its branded network, ExpressJet reported a second quarter loss of $26.4 million. President and CEO Jim Ream called the quarter “one of our biggest challenges as a company. Even though we reported a loss this quarter, we successfully executed our market launches...While the challenges in building a network as quickly as we did are enormous, we are pleased with the progress of that effort and fully expect our branded service to be successful.”
Second quarter net revenue totaled $395.2 million, consisting of: $360.1 million from its Continental and Delta operations as well as charter flying; $28.2 million from the ExpressJet branded service, launched April 2; and $9.3 million from the provision of third-party ground handling and maintenance services. During the quarter, ExpressJet continued to transition aircraft from Continental: 14 aircraft were painted, modified and placed on its branded network; 10 placed under the Delta capacity purchase agreement; and six, marketed for ad-hoc charter opportunities pending the start of Delta pro-rate flying on July 1. As of June 30, 66 of the 69 formerly Continental aircraft have been transitioned. The final three planes are expected to transition in August and will be placed in branded service. After the final transition from Continental, the expected aircraft allocation will be 224 aircraft dedicated to contract flying and 50 aircraft to branded flying, including the eight allocated to the Delta pro-rate agreement.