Tag Archives: Delta Connection-ExpressJet Airlines

ExpressJet expands its relationship with United and American, drops Delta

Delta Connection-ExpressJet Airlines Bombardier CRJ900 (CL-600-2D24) N307PQ (msn 15307) ATL (Jay Selman). Image: 403371.

ExpressJet Airlines, a wholly-owned subsidiary of SkyWest, Inc. has announced the initiation of a clearly defined long-term strategy:

  •  Long-term agreement secured with United Airlines. As part of this plan, ExpressJet has secured a new, five-year extension of its United Airlines ERJ 145 contract, effective January 1, 2018 through Dec. 31, 2022. The new agreement enhances ExpressJet’s United partnership and provides long-term stability to its model. It also provides ExpressJet pilots with continued access to United’s Career Pathway Program. Financial terms of the agreement were not disclosed.
  •  Early termination of Delta CPA. Additionally, ExpressJet and Delta Air Lines mutually agreed to initiate the wind-down of its remaining dual-class flying agreement under the Delta Connection brand, allowing ExpressJet opportunities to place aircraft with other partners. The agreement, which includes 28 CRJ900s and 33 CRJ700s, was previously scheduled to expire beginning in 2019. The aircraft financed by Delta, including all CRJ900s, will be returned to Delta beginning in fourth quarter 2017; ExpressJet expects to transition other aircraft previously operated under its Delta agreement to other major partners throughout 2018.
  •  Agreement with American for eight additional CRJ700s. As part of this realignment, ExpressJet has secured an agreement with American Airlines to transition eight additional CRJ700s to its American Eagle operation. That transition is expected to take place during second quarter 2018.

Copyright Photo: Delta Connection-ExpressJet Airlines Bombardier CRJ900 (CL-600-2D24) N307PQ (msn 15307) ATL (Jay Selman). Image: 403371.

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SkyWest’s ExpressJet to retire its CRJ200 fleet over the next year

ExpressJet to retire its CRJ200 fleet in late 2017

SkyWest, Inc. has announced additional fleet transitions and contract updates designed to reduce SkyWest’s long-term fleet risk and enhance its ability to respond to changing partner needs.

Specifically, SkyWest’s ExpressJet operation expects to transition to flying primarily dual-class aircraft in its CRJ operation by removing its Bombardier CRJ200 aircraft from service over the next year.

The removal of the CRJ200 aircraft reduces ExpressJet’s future required investment in its 50-seat fleet and is expected to improve the airline’s operating efficiency by eliminating an aircraft type from its platform.

SkyWest also announced ExpressJet and American Airlines have agreed to place 12 dual-class CRJ700s into service under a multi-year term. These CRJ700s had been scheduled to be removed from service under a previously-disclosed early lease return arrangement.

Additionally, SkyWest and Bombardier entered into a termination agreement covering Bombardier’s residual value guarantee (“RVG”) agreements on 76 CRJ200 aircraft owned by SkyWest Airlines and ExpressJet. Bombardier agreed to pay SkyWest $90 million by January 2017 along with certain other consideration in exchange for the release. Both the required sale of each aircraft and the cost to SkyWest of returning the aircraft to mid-time condition were points of risk and uncertainty for SkyWest that this termination agreement eliminates.

As a result of the expectation to remove ExpressJet CRJ200s from service and the Bombardier RVG termination agreement, SkyWest is evaluating its total 50-seat CRJ200 fleet and related long-lived assets for impairment in Q4 2016. SkyWest currently anticipates it will record a non-cash impairment charge in Q4 2016 estimated to be in the range of $440 million to $490 million (pre-tax) on its CRJ200 aircraft and other 50-seat aircraft assets, net of the $90 million in cash proceeds from the Bombardier termination agreement.

Copyright Photo: Delta Connection-ExpressJet Airlines Bombardier CRJ200 (CL-600-2B19) N923EV (msn 7826) ATL (Jay Selman). Image: 403333.

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