ExpressJet Future

M

meritflyer

Well-Known Member
Given the present facts and future potentials, I think the future of Express has come into question by several friends (pilots for other carriers). All of which think once the branded "two year experiment" as one put it, is over, XJT will see furloughs and massive downfalls with the loss encountered from opening, marketing, and operating (SG&A) their own airline.

Given the facts such as the 69 planes which were "pulled" by CAL, 18 went to DAL, nine went to XJT charter, and 42 went to ExpressJet Airlines branded flying.

Revenue fell over 50% in the first quarter, but profitability was still able to be sustained.

XJT's gross margins are top tier next to SKYW (18.5% v. 21%). Quarterly rev has increased at a rate of 5%, whereas SKYW is around 6%, and MESA is holding at 7% (although they experienced a $200M loss in the first quarter).

Believe it or not, XJT's operating margins are actually at the bottom of the tier (SKYW 10.7%, RJET 18.5%, MESA 5.7%, XJT 8.4%). The higher the number here, the better.

Less the financial mumbo jumbo, guys like Captain_Bob and FlyChicaga see what's going on from a day-to-day view and probably have a very good insight to what is happening with XJT and some of their flying - which I believe some just went to Republic.

Discuss..
 
I expect Continental Airlines to announce that 50+ ERJs will leave Continental Express in the next year or two. The CEO has said the chance is 50/50.

Where those would go, who knows. Or, maybe they wouldn't go. Maybe another regional will lose lots of flying and ExpressJet and others will share its flying.

Delta had zero XJT planes flying for them, then it went to 10, now it is 18. That could increase or decrease.

Or maybe the XJET branded flying will be sold out like CoEx stuff is and XJET will need more planes for that. Would CoEx planes be used? XR options?

XJT charter could land some long-term contracts with sports teams and companies and travel groups and increase its fleet. Or, XJT charter could not do so well.

Somebody needs to find a crystal ball for all this!
 
you trying to convince yourself that you made the right decision? I think what everybody is going to say is that nothing is for certain. As has been said many times on here, todays great place to be is tomorrows Mesa. You just never know.
 
The Republic flying, to the best of my knowledge, was Continental's choice for a replacement of 25% of our flying. They were somewhat cheaper than us, and at any rate Continental wanted diversity in it's regional service as a price bargaining chip, which I suppose is a reasonable business practice. All due respect to the Chautauqua pilot group, but they are somewhat hamstrung by weight restrictions, maintenance issues, and the scheduling hiccups that one would expect with taking on new flying, so I think it remains to be seen whether or not the lower operating costs CAL was hoping for will translate to the bottom line. For the sake of the guys and gals working for Chautauqua, I hope so. Every chitty-kitty guy I've met has been polite, friendly, but feeling a little awkward. For my part I've tried to do my best to be the same, and ameliorate any awkwardess between us. Business is business, and at the end of the day we're all in the same boat and rowing for the same shore. I may have one of those guys as an FO or CA one day. Professionalism pays.

As for ExpressJet, word round the campfire is that Delta is happy with the product we've offered them so far, and more flying from them is on the table. What with all the new airports I've been adding to my Jepps with each new revision, I think this one will bear out. The JetBlue flying was a real windfall-- it came along right when we needed it most, we did a bang-up job by and large (a few hiccups early on-- new flying and all...), JetBlue was happy, we got a much-needed cash injection, and were financially bolstered for a while in a very uncertain time.

The branded flying is the big question mark. Some routes are real money makers, others are rather lackluster performers. Well, what can you expect? "ExpressJet" is not exactly a household name when it comes to airlines, and there will, of course, be the natural massaging of timetables and routes as the business grows in some areas and shrinks in others.The obvious comparison to make is that with FlyI, but the comparison is superficial at best. We have a fantastic infrastructure, diversified busines segments, and, most importantly, we are not attempting to compete with routes dominated by major airlines.

I know there's a bitter little contingent of people who would love to see ExpressJet fold, for a variety of selfish and small-minded reasons. Who knows? It may fold sooner or later, and those little people will happily jump up and down with smug little told-you-so's. But until that day comes: Every time I see an Aqua-Fresh Embraer full of people, every time I put a new airport in my Jepps, and every time I hear managment bribe us to pick up trips because there's more flying than there are pilots to cover it, it's a very satisfying spit in those bitter little faces. I'm willing to bet the spitting lasts longer than the told-you-so's.

So the bottom line is, everything could go tits-up tomorrow, next week, or next decade. But the same is true all over the industry. Our advantges: Excellent leadership, an industry-leading contract, insuperable employee morale, good union representation, and diversity enough to weather quite a few storms. Disadvantges: Uncertainty in an uncertain industry.

So far, so good.
 
**Note: this is from a PM to Merit today based on him asking the same basic thing directly to me. Below was my response.
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Merit... although I can't "guarantee" anything... I can tell you what our CEO has said and what I've personally seen myself.

First of all... The branded flying is gaining ground by leaps and bounds. I've personally never flown so many happy people. Most everyone who flys us is in love with our service, the point to point, the $1 beers, the XM, the food, the pillows, the blankets, the free headsets, the nice seats, etc... In addition... we are not just giving these fares away... we are charging a fair market price since we are not even remotely trying to be a "Discount" Operator.

Seriously... I've never had so many people get off of an RJ after spending 3+ hours on it... who were thrilled, happy, and looking refreshed. A far cry from the "slaveship" aura that other's feel on long distance RJ flights for other mainline carriers who don't even offer food, pillows, etc.

That combined with the fact that our loads have significantly increased over the past two months... in addition to our CEO, and CFO, telling us that we are way ahead of their predictions for the branded flying... tells me that it will be around for a long time.

We've never approached the branded flying as a "Temporary Fix" or a "two year trial". I think you'll see that once you get on board. The folks working on the branded side have put more time and effort into it than most major airlines put into their operations. Remember too... we are only using 16% of our fleet for this operation. It will not sink the mothership even if we loose money on it for several years. What it really does for us, and the industry... is show that a "Regional" Airline does not have to be "beholden" to a Major carrier. Also... it shows future potential customers (other majors) that we can run an efficient operation with world class service... and that will help in gaining the edge in future RFP's.

DAL is a perfect example... They seem to love us. They wanted more of our planes... and were willing to work with us to create a "deal" that wouldn't interfere with our original CPA with CAL in order to get them more aircraft.

In addition... CAL has renegotiated with us to keep extra aircraft on the COEX side due to an increased need caused by a lack of ability of CHQ to fulfill much of the flying they originally intended.

Jim Ream (CEO) has mentioned in more than one all-pilot conference call that he would like to exercise at least 26 of our 100 options for XR's with Embraer to round our fleet out to an even 300. Possibly for expansion on the branded side, a renegotiated deal with CAL, or for future RFP's with the likes of DAL, etc.

Basically... the future is bright at XJT for the forseeable future. Even IF the branded side tanks in two years... you'll be high enough on the seniority list that it wont affect you. But... we have a really great management team that is not only respected by their employees... but also by the industry (No Johnny O. types). They could have already dropped the planes and made more money not flying them... thus eliminating thousands of jobs. Instead... they had a vision for the future of XJT and acted upon a business plan that they've been waiting for years to enact.

Regardless... XJT is still making a profit. They are not in the hole every quarter like many other regionals who fly for negative numbers just to beat out another airline for a contract... nor are they hemoraging like many "majors".

Anyway... we still have our fair share of problems... just like any place else. We still have our "kool-aid" drinkers too... but for some reason... the kool-aid just tastes a bit sweeter over here. ;) That makes everyone "want" to work on the problems vs. just let other's deal with it.

Our union is top notch... we have an industry leading contract with no concessions voted into it... even during the "rough" times... and believe it or not... our union actually has a decent relationship with management & vice versa.

Lastly... we, as a company, are diversified. XJT Services does EMB service and repair for all EMB aircraft, no matter what carrier, in addition to many other types of corporate and charter aircraft. We are the ONLY airline thrust reverser MX facility for EMB in all of North America. Our Training facilities in IAH train not only XJT employees... but also pilots, FA's, ground crew, MX, and managment for other airlines. Also under the umbrella of XJT services is our world class paint facility in Saltillo... We paint aircraft for many airlines as well.

So... as a company... we are diversified and making money in more ways that just hanging on the edge of a cliff waiting to outbid the next "regional" in an RFP in order to "stay alive".

Justin... Don't worry about all of this. Focus on getting through training & passing your checkride. The best thing you can do for your own sanity is to let the "rumors" play out. It's really not worth the stress of trynig to figure out what the "company" is going to do... and how it will affect you today... next month... next year... next decade, etc. The best part about this job is going home... and not taking ANY part of the job with you.

I know that was long... but I hope it helped.

;)

Bob
 
My god Bob, that was excellent!!

That goes right in the Top Ten Best Posts Ever to Grace Jetcareers.

And once again, Bob proves himself to be the go-to guy for the straight dope.

Hell, I was exceted about ExpressJet before, but after reading that I feel like Tyrone in my avatar!
 
I'm not concerned about it. Is there really anything a pilot can do about the financial mumbo jumbo, other than do the best job that they can day in and day out (which most of us are doing regardless of the company's "need"). If I get furloughed so be it, I'll find another job, and hopefully not at a regional this time.


If you're a prospective regional pilot, xjet is probably as safe a choice as any. The regionals are somewhat of a crapshoot in my opinion. It is wise to stay away from places that have had a consitently bad rep over the past decade or fly on certificates specifically created to circumvent a labor agreement. Other than that, it's almost like throwing darts. Sure repbulic may be the uber regional right now because they fly teh shiniest jets and are gobbling up contracts that were perenially held by competitiors, but all it takes is one big cancelled CPA and the tables have turned.
 
Rebublic the uber regional you say?

Well, I wouldn't doubt anything at this point. If, in five years time, Mesa comes out as the top regional to work for in the industry, I will be suprised to find anyone who finds my complete lack of shock remarkable.

Put a winecork in a tide, and place bets on where it will end up on the beach. You now have some idea as to what it's like to make decisions in this industry.
 
Monterey is the only place I've had any exposure to ExpressJet's operation, and that was only to the ramp operation, but I must say that it was quite sad. I witnessed this spectacle while our own passengers were boarding for the long and grueling flight to SFO, last week.

When passengers were boarding, there were no rampers anywhere around the airplane. They must have told the passengers what to do inside, because each passenger with an "oversize" carryon put it on the little cart next to the stairs themself.

After 10 minutes or so of passenger boarding, two rampers came roaring up to the airplane (and I do mean roaring, they were hauling ass) in a tug pulling a cart of bags. They jump out and begin frantically loading the bags into the airplane. One was wearing blue jeans and a white T-shirt, with a radio hanging on to a pocket for dear life, the other was wearing shorts (if I remember correctly) and a black sweatshirt that had some sort of huge design on it (like a band's shirt).

About this time, a second ExpressJet ERJ lands and slowly begins to taxi toward the terminal. Shortly after it lands, two girls come running (literally, full on sprint) out of the terminal gate and toward the airplane. Both were in plain clothes. One stands at the bottom of the stairs and appears to be trying to get the crew to close the door, the other one runs over to the next parking spot to marshall the new plane in. The door on the first one closes, and the girl there frantically (by herself) tugs the stair case back, while the two guys from the tug are frantically moving cones around and closing up shop in the baggage compartment.

Everything, literally, everything I saw the rampers doing was at a breakneck pace, frantic is the best word to describe the scene from start to finish. Not a single person was wearing a safety vest, or any kind of safety equipment whatsoever, except, perhaps, for earplugs as I wasn't close enough to make out such small details.

At this point we fired up and left so that's all I saw. One of our rampers was telling me that ExpressJet has only one set of stairs there, so when one airplane is late, or the other one is early, the second one parks down the ramp a ways and shuts down to wait for the first to leave so they can have some stairs. All the passengers are still on board. Now I didn't witness this myself, as the first was about ready to leave when the second one arrived this day, so take it or leave it. Our rampers also indicated that what we saw that day was pretty standard.

I've seen and heard nothing regarding the flight crews, they have nothing to do with this small tale, so don't try to drag them into it.

That's my first hand account of my only exposure to their operation. I have cast no opinions, made no assumtions, and have not related any of this to any of their other operations anywhere, so don't try to put words in my mouth.
 
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