XJT agrees to new 7 year CPA with CAL

[cybourg10]

HOUSTON, June 5 /PRNewswire-FirstCall/ -- Continental Airlines (NYSE: CAL - News) today announced that it has reached a new seven-year capacity purchase agreement with ExpressJet Airlines, Inc. to provide regional jet service for Continental Airlines at rates that are lower than rates under its current agreement and more competitive with those offered by other regional service providers. The new agreement is effective July 1, 2008.
The new contract enables Continental to continue to benefit from the excellent service and substantial feed traffic provided by ExpressJet. The base agreement covers flying by ExpressJet of a minimum of 205 regional jets in the first year and a minimum of 190 regional jets thereafter.

In addition, ExpressJet has the right to return to Continental 39 Embraer 50-seat regional jets that ExpressJet currently uses for non-Continental contract flying. Continental plans to add the returned aircraft to the new agreement and withdraw from the agreement up to 30 of its Embraer 37-seat regional jets currently flown by ExpressJet for Continental. Continental will then sublease or ground all of the withdrawn Embraer 37-seat regional jets to better align regional capacity with current market conditions. Additionally, the agreement reduces the rent Continental charges ExpressJet on 30 other regional jets that ExpressJet will retain for seven years to fly at its own revenue risk.

Continental and ExpressJet also entered into a settlement agreement and release of all the parties' claims relating to payments and rates under the original capacity purchase agreement, including all disputes previously disclosed as possible matters for arbitration.

 

[ReverseSensing]

Congratulations, XJT.

 

[Lazy8]

Well done. Nice to see you can have an industry leading contract and secured flying. Too bad PNCL can't get it straight.

 

[JetLinkin Park]

Great news.

That is all.

 

[TNPILOT]

Good thing we didn't fall for the Skywest kool aid!

 

[waterski45]

A bit of good news for one pilot group amidst all of the doom and gloom in the rest of the industry.

 

[General Lee]

"Continental plans to add the returned aircraft to the new agreement and withdraw from the agreement up to 30 of its Embraer 37-seat regional jets currently flown by ExpressJet for Continental. Continental will then sublease or ground all of the withdrawn Embraer 37-seat regional jets to better align regional capacity with current market conditions."


So, does that mean CAL will take 30 of the 37 seat ER3s and park them? They can't be making that much money if a 50 seater can't. Eagle has the same problem. I think Delta got rid of the CHQ ER3s, or will soon. They really DRAIN revenue during high oil.


Bye Bye--General Lee

 

[cybourg10]

We will shut down branded and put the newer 50 seaters back in the COEX system and let CAL park or sub lease the 135s. Overall we lose about 30 planes in our fleet but sometime in 2009 COEX will not have any 135s. This is a good sign that CAL management realized they were not going to get CAL ALPA to give in on scope.

 

[WalterSobchak]

Congrats to all over at XJet...

 

[OPECJet]

Glad to hear this good news!