Defunct ExpressJet seeks to return as independent airline

ExpressJet, which shut down, filed documents to begin operating as an independent carrier.
Caption
ExpressJet, which shut down, filed documents to begin operating as an independent carrier.

Credit: Source: ExpressJet

Credit: Source: ExpressJet

A former Delta Connection and United Express carrier that shut down operations last year is seeking to return as a small independent airline flying to underserved communities.

ExpressJet, formerly known as Atlantic Southeast Airlines or ASA, was a Delta Connection carrier for decades. It lost its Delta contract to operate regional flights for the Atlanta-based airline in 2018, then last year lost its last remaining contract with United Airlines to operate United Express flights.

But the College Park-based carrier filed an application with the U.S. Department of Transportation this month seeking to resume airline service.

ExpressJet’s filing says its plans are to launch “point-to-point flying to small and medium sized cities that have lost service in recent years as a result of U.S. airline industry consolidation and COVID-19 driven route reductions.” It kept confidential its plans for specific routes and fares.

“There’s a ton of these cities...that no longer have non-stop service, that used to have a lot of nonstop service,” said ExpressJet CEO Subodh Karnik. That’s partly the result of airline mergers and acquisitions over the last decade and a half, he said. To fill flights, Karnik plans to target a combination of leisure travelers and business travelers.

However, ExpressJet has only one remaining plane, an Embraer ERJ-145 regional jet.

It hopes within the first year to lease at least 9 more of the 50-seat Embraers. At one point, ExpressJet operated about 250 of them. The availability of hundreds of planes parked during the pandemic has lured startups to the airline industry.

ExpressJet said it plans to “avoid needless overlap with the major airlines, the ‘ultra low-cost carriers,’ and even the new airline industry entrants.”

That would likely mean flights between smaller cities, rather than hubs like Atlanta.

But the company acknowledges there are risks, including uncertain demand and whether it can add planes and employees and strike deals to restart service. Karnik expects a response from the DOT later this month, which could be followed with a public comment period then a decision from the agency.

“We’re going to try our best to make a go of it,” Karnik said. “There’s a huge legacy here,” he said, adding that the airline furloughed thousands of employees and plans to call some of them back to work if it restarts operations.

Karnik said he hopes to start flying by June 2021. The airline’s proposed operating schedule calls for starting with about 75 employees and fewer than 15 flights a day, ramping up to 261 employees and an average of about 50 flights a day by April 2022. It listed proposed average fares over a one-year period of $155 per flight averaging 543 miles long.

In spite of shutting down last year, ExpressJet said it has maintained its active Federal Aviation Administration certification and retained the same ownership and a management team with “very few changes to key personnel” since 2019. Karnik, a longtime airline executive, is the majority investor in ManaAir LLC, which acquired ExpressJet from regional carrier SkyWest two years ago.

ExpressJet’s headquarters with its operational system center is near Hartsfield-Jackson, while its maintenance operations are based in Houston, Texas, where its United Express operation was.

Its filing proposes that its first year of operating expenses would be $61.3 million with operating revenues of $62 million. It says its current balance sheet has a negative working capital balance of $8.8 million, but that it expects to have a $28.5 million cash balance available, including $10 million from the federal Paycheck Protection Program for small businesses.

The company also applied in January for millions of dollars in airline stimulus funding from the second round of the CARES Act, hoping for as much as $67 million.

“If we get that money, we will be able to grow way faster,” Karnik said.

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