While conducting regional operations for partner Continental Airlines remains ExpressJet's primary concern, the carrier is aggressively building its charter and corporate business as revenues for 2008 are expected to reach $45 million.
Houston, Texas-based ExpressJet operates 12-13 Embraer ERJ-145s of 30 aircraft dedicated to that segment.
Key to ExpressJet's favourable economics in its charter and corporate flying is a 50% reduction it pays to Continental on aircraft rents. ExpressJet negotiated the cut with its long-time partner and former parent company in July when the two airlines brokered a new capacity purchase agreement.
ExpressJet entered charter and corporate and operations in 2006 after Continental cut 69 ERJs from its regional flying. Those operations survived, but ExpressJet was forced to dissolve its commercial branded flying business in summer after an unprecedented spike in oil prices. Under the new deal with Continental, ExpressJet returned 39 ERJs to its mainline partner.
ExpressJet chief executive Jim Ream says the company's charter and corporate business fills a niche between 12-14 seat aircraft and those in the 100-plus seat category.
He says the carrier is generating business with sport teams, brokers and business shuttles. But the ERJ is a huge hit in the entertainment business, "where you have folks that can't quite squeeze into a Gulfstream because they can't get their entourages below 12 any more".
To tailor the 50-seat ERJs specifically to corporate customers, ExpressJet is removing two rows of seats from the aircraft, resulting in 41 seats that "give you a first-class pitch", Ream says. Other amenities include AC power, XM Radio and ovens on board.
ExpressJet's chief executive stresses that the carrier plans to grow the business further in 2009, applying lessons learned during the last two years in its corporate business using "a function of cost engineering and automation to make this a very profitable operation for us as we build this revenue base".
Source: Flight International
