SkyWest Closes on ExpressJet Acquisition
St. George, Utah-based SkyWest announced today that it has completed its acquisition of Houston-based ExpressJet Holdings. Under the terms of the $133 million transaction, ExpressJet Airlines becomes a wholly owned subsidiary of Atlanta-based Atlantic Southeast Airlines (ASA), itself a unit of SkyWest.
SkyWest confirmed its intention to combine the operations of ExpressJet and Atlantic Southeast, subject to receipt of the necessary regulatory approvals, and use ASA’s existing facilities in Atlanta as the operating headquarters of the combined company. SkyWest said the airlines will maintain separate operating certificates until the regulatory process for combining them closes. Pending receipt of the single operating certificate, ASA and SkyWest Airlines will assume certain support functions now performed by ExpressJet.
ASA has negotiated a 10-year capacity purchase agreement with Continental Airlines, which became active upon the consummation of the merger. ExpressJet now flies 206 Embraer regional jets for Continental, 32 for United Airlines and six in its charter unit, while ASA flies 160 Bombardier CRJs as a Delta Connection and United Express carrier. Including SkyWest Airlines’ 294 airplanes, the combined fleet totals 698 aircraft–by far the largest in the regional airline industry.
Soon after the companies announced they had reached a merger agreement on August 4, SkyWest CFO Brad Rich said the company expected to complete the integration of ExpressJet into ASA in 12 to 18 months, at which point, he added, SkyWest will begin to fully benefit from the merger. Rich estimated that the transaction would result in a 45- to 50-cent earnings per share benefit once the company combines the two airlines' operating certificates.