XJT Margin Down by Two Thirds

ExpressJet Holdings, Inc. today reported first quarter net income of $10.2 million, or $0.18 diluted earnings per share. First quarter operating revenue increased 1.5 percent to $412.1 million, versus $405.8 million in the first quarter of 2006. ExpressJet’s first quarter 2007 operating income reflected a 3.5 percent operating margin, as compared with an operating margin of 9.2 percent for the first quarter 2006. Three main factors contributed to the company’s decreased year-over-year operating margin: ExpressJet continued to be paid under the 2006 rate structure while in arbitration, but incurred costs at 2007 rates; higher than expected pilot training costs that are not reimbursable under the capacity purchase agreement with Continental; and expenses associated with the company’s transition of 36 aircraft from the Continental capacity purchase agreement. For a complete report see the May 14 issue of Regional Aviation News.