SkyWest Divests ExpressJet to United Airlines Joint Venture

 - December 18, 2018, 12:21 PM

About one year after reports surfaced that United Continental Holdings was considering acquiring an ownership stake in ExpressJet Airlines, the regional operator’s parent SkyWest announced it entered into “definitive agreements” to sell ExpressJet Airlines to a newly established United Airlines joint venture, ManaAir, for $70 million.

The transaction is expected to close in early 2019, subject to customary closing conditions, Utah-based SkyWest said today. SkyWest owns two regional scheduled airlines, Atlanta-based ExpressJet and SkyWest Airlines. As of September 30, the airlines operated a fleet 574 regional aircraft on scheduled services in partnerships with United Airlines, Delta Air Lines, American Airlines, and Alaska Airlines. They jointly flew 36.5 million passengers in the first nine months, down 6.1 percent from the year-ago period.

The sale of ExpressJet follows a winding down of its flying agreement with Delta Air Lines and the phasing out of the contract with American Airlines by April next year. Starting in early 2019, ExpressJet will fly exclusively as United Express, with flight operations centered out of Houston, Chicago, Cleveland, and Newark. ExpressJet currently flies Bombardier CRJ200s and Embraer ERJ145s for United Express. As part of the agreement, SkyWest will retain ownership of the CRJ aircraft currently in service at ExpressJet and lease 20 CRJ200s to ExpressJet for up to five years.

The transaction also includes certain protections around existing SkyWest Airlines flying, as well as a priority position to add 25 new dual-cabin aircraft with United should those opportunities arise, the company said without providing details. United placed an order for 25 Embraer E175s at the Farnborough Air Show in July to replace 25 CRJ700s operated by its United Express partners.

In September, ExpressJet Airlines pilots represented by the Air Line Pilots Association agreed to a new three-year collective bargaining agreement, conditional to United Airlines awarding at least twenty 70-seat Embraer E175s to ExpressJet by January 2019.

SkyWest president and CEO Chip Childs said Tuesday’s announcement “provides further clarity and focus for the future.”