United Airlines is ending its contract with ExpressJet, the regional carrier which operates exclusively for United under the United Express brand.
Following the decision, United will consolidate its Embraer ERJ-145 flying with rival affiliate CommutAir. Both ExpressJet and CommutAir provide feed into United’s hubs.
“We have been communicating for several months that we expect to be a smaller airline in response to the unprecedented impact the COVID-19 pandemic has had on our business,” United said in a July 30 statement. “In February, we took our first step to simplify our partner landscape and consolidate our E145 flying. Today we are taking additional steps to further simplify our operation and right size our capacity for the future.”
CommutAir will therefore become the sole operator of United’s ERJ-145 operations, with the transition expected to take “a number of months.”
The move to drop ExpressJet will come as a huge and potentially lethal blow to the Atlanta-based company, as United was its sole customer. Although it previously operated American Eagle flights for American Airlines, that contract was terminated in May 2018.
ExpressJet is owned by ManaAir, with United holding a minority stake in the parent. Prior to the coronavirus pandemic, the airline operated 3,300 weekly flights for United from bases in Chicago (ORD), Cleveland (CLE), Houston (IAH), Knoxville (TYS) and Newark (EWR) using 50-seat ERJ-145 jets.
Speaking to Aviation Daily sister publication Routes in April, ExpressJet CEO Subodh Karnik warned that the airline would struggle to survive the crisis.
“Unlike the European regional carriers that primarily get paid on a pro-rata and commercial basis, our business model is one where we are basically a private label provider,” Kamik said. “We don’t carry big balance sheets, we don’t carry assets and so all of us are in complete shell shock on what it means, how to carry all our employees ... We’re going a little crazy in terms of figuring out ways to reduce cash burn.”
In a statement to Reuters following United’s decision, ExpressJet said, “We are very disappointed that United Airlines did not select ExpressJet Airlines to be its future ERJ-145 United Express operator.”
The carrier added it would explore all options for the company’s future in 2021, but operations are expected to continue as normal for the remainder of this year.
In a statement, Air Line Pilots Association, International (ALPA) ExpressJet Airlines Master Executive Council (MEC) chairman Joe Mauro said United’s decision was “extremely disappointing” and “devastating news,” noting “just a few short months ago, ExpressJet was positioned to be the foundation for United’s regional consolidation.”
“ExpressJet pilots have shown time and time again that we can adapt to changing circumstances, and this pandemic tested our resolve to take drastic steps to ensure our future,” Mauro said. “Regrettably, our efforts were not enough. Unfortunately, when cost is the only focus, the years of dedication by this pilot group for our mainline partner are overlooked and discredited, and the human element is ignored.”
The Regional Airlines Association (RAA) also weighed in, warning of the exponential economic impact of a potential ExpressJet wind-down and calling on the U.S. Congress to extend the CARES Act Payroll Support Program (PSP) before its Sept. 30 expiration.
“ExpressJet is not the canary in the coal mine; without intervention, this will be the fourth regional airline to fail,” RAA president Faye Malarkey Black said in a July 31 statement. “When an airline shutters, it’s like a negative force multiplier. The airlines’ direct employees are dealt a crushing blow which continues to reverberate as small communities lose air service and those communities in turn lose business and even more job losses follow.”
Earlier this month, United CEO Scott Kirby said the airline expects travel demand to recover over time but plateau at about 50% of 2019 levels until a COVID-19 vaccine is widely available. United cut capacity by 85% during the three months to June 30 and plans to grow it to 35% during Q3.
United Express flights are also operated by Air Wisconsin, GoJet Airlines, Mesa Airlines, Republic Airways and SkyWest Airlines.
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