Houston-based regional operator ExpressJet reached tentative deals with its four labour groups to enact cost savings management deems necessary to operate under a new capacity purchase agreement it reached with long-time partner Continental Airlines in June.
In August carrier CEO Jim Ream warned that posting profits under the new Continental deal would be a challenge, noting ExpressJet gave significant economic concessions to its major partner to secure long term business.
One element of the new deal is lower block hour rates charged by ExpressJet, but in return restrictions in the previous deal are lifted - including those prohibiting ExpressJet from flying for other airlines.
ExpressJet management in August launched discussions with its unions and suppliers, with Ream warning that he was not sure ExpressJet would have a sustainable business if those talks weren't successful.
The carrier said it needed $36 million in wage and benefit concessions, and on 15 July $10.8 million in cuts were initiated for management and clerical staff.
Tentative agreements with pilots, mechanics, flight attendants and dispatchers should result in an additional $20 million in savings, with the remaining $5 million supplied through wage and benefit concessions and productivity increases in the company's airport services division.
"If ratified, every employee group at ExpressJet will have participated in concessions better enabling us to weather the current economic downturn and focus on developing strategic objectives and conserving cash," says Ream.
Voting by the labour groups is scheduled to end 1 November.
Source: Air Transport Intelligence news
