ExpressJet suspends commercial operations
NEW YORK (Reuters) - ExpressJet Holdings Inc XJT.N, the parent of ExpressJet Airlines, said on Tuesday it would suspend branded commercial operations as of September 2, blaming high fuel costs.
"If we had any other choice, we would not take this difficult action," Jim Ream, ExpressJet's president and chief executive, said in a statement. "However, rising fuel prices has made the operation impossible to sustain."
The announcement comes a week after the Houston-based airline said it would terminate agreements with Delta Air Lines Inc (DAL.N) by mutual consent as of September 1 and return aircraft to its lessors within a year.
ExpressJet is the latest U.S. airline to suffer from higher costs such as fuel, along with heavy competition.
The company said it would continue flying 205 aircraft branded as Continental Express to more than 150 destinations, as well as continue its charter flight operations with a fleet of 30 aircraft through ExpressJet Corporate Aviation.
ExpressJet began flying under its own brand last year to put a quarter of its fleet to use after former parent Continental Airlines Inc CAL.N canceled a capacity purchase agreement.
ExpressJet rejected an unsolicited $3.50-a-share bid from SkyWest Inc (SKYW.O) in April, saying the fair value of its stock was substantially higher than that.
ExpressJet shares last closed at $1.05 on June 20.
ExpressJet said last month it was reviewing strategic alternatives to boost shareholder value amid "macroeconomic headwinds."
ExpressJet said it would continue to sell tickets prior to September 2.
(Reporting by Dane Hamilton and Michael Erman; Editing by Braden Reddall)
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