Wednesday, August 04, 2010

SkyWest moves to acquire ExpressJet and merge it with ASA

by B. N. Sullivan

SkyWest Inc. and Express Jet Holdings, Inc. announced today that they had signed "a definitive merger agreement" whereby SkyWest will acquire ExpressJet and merge it with SkyWest subsidiary Atlantic Southeast Airlines (ASA). The parties hope to close the deal by the end of this year, subject to regulatory approval.

In a press release about the merger deal, George Bravante, Chairman of the ExpressJet Board, said that "the combined airline will be able to provide a stable, platform for growth for ExpressJet employees after this transaction closes."

More from the ExpressJet press release:
It is anticipated that the combined airline will maintain significant operational presence in each of the hubs ExpressJet currently serves, including Continental's current hubs in Houston, Newark/New York and Cleveland, as well as hubs in Chicago O'Hare and Washington Dulles for United Airlines. In addition, it is expected that the vast majority of front-line employee positions will not be impacted by the acquisition.
The Air Line Pilots Association (ALPA), which represents ExpressJet's 2,700 pilots, immediately issued a statement about the merger plans. Capt. Chris Cashmareck, chairman of the ExpressJet pilots’ unit of ALPA, said, "Every transaction presents opportunities and risks. We need to review and evaluate the plan for the combined airline before we can commit to taking a position to support or oppose the sale/merger. What I can state unequivocally is that, just as airline mergers over the past few years have shown us, it will take pilot involvement and support to realize any true measure of success for this or any transaction."

The pilots union for ExpressJet sent a letter to ExpressJet Holdings management stating the fundamental requirements for support of a sale/merger. Among them are the following:
  • the transaction must result in a profitable airline that provides long term stability and progressive career potential for our pilots;
  • the transaction must fully honor the scope and successorship provision of our collective bargaining agreement;
  • management must commit to negotiating a joint collective bargaining agreement with all involved parties that benefits all pilots; and
  • there must be a fair and equitable seniority list integration.
It should be noted that once this merger is realized, SkyWest Inc., the parent of both SkyWest Airlines and ASA, will be the world's largest regional airline company, with a combined fleet of aircraft numbering nearly 700.

SkyWest, Inc. also may be interested in further expansion. According to a Bloomberg article, SkyWest "would consider purchasing Comair from Delta Air Lines Inc. and said U.S. commuter carriers may benefit from further consolidation."