The Circle is Complete: ExpressJet’s Long Journey Ends Where It Began
It has been a long road for the regional carrier ExpressJet, but the recent announcement that ExpressJet would be acquired by United (through a subsidiary) brings the airline right back to where it started. It returns to its roots as a partner-owned regional airline flying only for that partner, Continental’s corporate successor.
ExpressJet began life as many regional airlines did… by rolling up a bunch of different operators into one bigger one. In this case, it was the doing of Frank Lorenzo.
For those who remember Frank Lorenzo (I can’t believe I even have to say that, but time marches on), you’ll remember that he took a bunch of airlines and tried to squeeze financial success out of them at all costs. Eventually what remained of Texas International, Continental, People Express, Frontier, and Eastern were all rolled up into a miserable airline under the Continental name. (It wasn’t until after he was gone that Continental turned itself around under Gordon Bethune and Greg Brenneman.) But through this long, painful, process, Lorenzo also picked up a bunch of regional airlines.
Britt Airways began in Indiana and flew around the Midwest. It was bought by People Express in 1985.Provincetown-Boston Airlines (PBA) had its start in New England, but it also flew around Florida in later days. In early 1986, it was acquired out of bankruptcy by People Express.Denver-based Rocky Mountain Airways flew where you’d expect it to fly with a name like that. It was acquired by Texas Air Corporation (Lorenzo’s holding company) in 1986.Like PBA, Bar Harbor was also New England-based with some Florida flying. It was partially-acquired by Texas Air Corporation in 1987.In 1987, Texas Air Corporation completed its purchase of People Express, so all of these airlines came together. Bar Harbor purchased PBA in 1987. In 1991, Britt and Rocky Mountain were merged. During the very early 1990s, when both Continental and Eastern were operating separately, these airlines did double duty. But once Eastern failed, everything was consolidated under the Britt Airways certificate and the whole thing was named Continental Express.
Through the 1990s, Continental Express grew, acquiring dozens of Embraer regional jets and fortifying the Continental hub operations. In 1996, it was spun out into its own company, ExpressJet Airlines, Inc. It remained owned by Continental.
After 9/11, Continental looked to ExpressJet as a way to raise cash. It spun the airline off in 2002, and that’s when things started to get dark.
Within a couple of years, Continental decided to start cutting the ExpressJet-operated Continental Express fleet. It told the airline that it would eliminate 69 airplanes from the contract. ExpressJet made a really poor decision and decided to keep the airplanes and try to branch out. It started flying charters, but then in 2007, it opted to create its own short-lived, branded operation.
ExpressJet announced it would try to become Southwest Airlines with smaller planes on smaller routes. I loved the idea (and the $1 beers). But the airplanes weren’t the right ones to make it work. And the company started the operation just before the fuel spike of 2007 and the Great Recession. Timing could not have been worse.
That same year, ExpressJet branched out and began flying as Delta Connection from Los Angeles. By the summer of 2008, both the branded operation and the Delta Connection flying was gone. ExpressJet had to figure out a plan, but all it could muster on its own was a small contract flying for United around the time it merged with Continental.
Fellow-regional SkyWest had begun sniffing around ExpressJet, and it took two years before the airline was willing to commit. Through its Atlantic Southeast subsidiary that it had bought off Delta during its darkest days in 2005, SkyWest acquired ExpressJet. The airlines were merged under the ExpressJet name that year. (This was after a really terrible idea to rename the combined carrier SureJet was shelved.)
With the merger, ExpressJet now had large contracts with both Delta and United/Continental. It eventually ended up flying for American as well. It might sound like all was well, but there was one minor problem… it was never able to make any money. Every quarter, SkyWest would be optimistic about the airline eventually posting a real, full-year profit. It never happened.
In 2018, both the dwindling Delta contract and the small American one were canceled. By 2019, ExpressJet would again only be flying for United, the corporate successor to Continental.
Meanwhile, United remained the only airline not to have a wholly-owned regional subsidiary. After shutting down its Atlantic Southeast regional when it needed cash in the mid-2000s, and shutting down Comair a few years later, Delta had turned around and picked up Pinnacle (now Endeavor) in 2013. It now operates more than 150 CRJ-family aircraft for Delta.
Meanwhile at American, Envoy, Piedmont, and PSA are all wholly-owned. They operate over 300 regional combined with both Piedmont and PSA seeing rapid growth.
United had been interested in having a wholly-owned subsidiary of its own, but its flight attendant agreement forbid it. It had purchased a piece of Commutair previously, and now, through a complex transaction, it has brought ExpressJet back into the fold as well.
After years of bouncing around, hopelessly trying to create a sustainable, profitable model, ExpressJet is right back where it began in the 1990s.
