XJT agrees to new 7 year CPA with CAL

[cybourg10]

HOUSTON, June 5 /PRNewswire-FirstCall/ -- Continental Airlines (NYSE: CAL - News) today announced that it has reached a new seven-year capacity purchase agreement with ExpressJet Airlines, Inc. to provide regional jet service for Continental Airlines at rates that are lower than rates under its current agreement and more competitive with those offered by other regional service providers. The new agreement is effective July 1, 2008.
The new contract enables Continental to continue to benefit from the excellent service and substantial feed traffic provided by ExpressJet. The base agreement covers flying by ExpressJet of a minimum of 205 regional jets in the first year and a minimum of 190 regional jets thereafter.

In addition, ExpressJet has the right to return to Continental 39 Embraer 50-seat regional jets that ExpressJet currently uses for non-Continental contract flying. Continental plans to add the returned aircraft to the new agreement and withdraw from the agreement up to 30 of its Embraer 37-seat regional jets currently flown by ExpressJet for Continental. Continental will then sublease or ground all of the withdrawn Embraer 37-seat regional jets to better align regional capacity with current market conditions. Additionally, the agreement reduces the rent Continental charges ExpressJet on 30 other regional jets that ExpressJet will retain for seven years to fly at its own revenue risk.

Continental and ExpressJet also entered into a settlement agreement and release of all the parties' claims relating to payments and rates under the original capacity purchase agreement, including all disputes previously disclosed as possible matters for arbitration.

 

[ReverseSensing]

Congratulations, XJT.

 

[Lazy8]

Well done. Nice to see you can have an industry leading contract and secured flying. Too bad PNCL can't get it straight.

 

[JetLinkin Park]

Great news.

That is all.

 

[TNPILOT]

Good thing we didn't fall for the Skywest kool aid!

 

[waterski45]

A bit of good news for one pilot group amidst all of the doom and gloom in the rest of the industry.

 

[General Lee]

"Continental plans to add the returned aircraft to the new agreement and withdraw from the agreement up to 30 of its Embraer 37-seat regional jets currently flown by ExpressJet for Continental. Continental will then sublease or ground all of the withdrawn Embraer 37-seat regional jets to better align regional capacity with current market conditions."


So, does that mean CAL will take 30 of the 37 seat ER3s and park them? They can't be making that much money if a 50 seater can't. Eagle has the same problem. I think Delta got rid of the CHQ ER3s, or will soon. They really DRAIN revenue during high oil.


Bye Bye--General Lee

 

[cybourg10]

We will shut down branded and put the newer 50 seaters back in the COEX system and let CAL park or sub lease the 135s. Overall we lose about 30 planes in our fleet but sometime in 2009 COEX will not have any 135s. This is a good sign that CAL management realized they were not going to get CAL ALPA to give in on scope.

 

[WalterSobchak]

Congrats to all over at XJet...

 

[OPECJet]

Glad to hear this good news!

 

[BeachBummer]

Glad to see CAL finally removed head from a$$. XJT was a blast keep it goin!

 

[Captain Morgan]

Yes, congrats XJT and CAL for a win-win decision.

 

[MJG]

Good news for all my friends still at XJT. Hope there won't be any furloughs though if branded gets axed.

 

[Stifler's Mom]

We will shut down branded and put the newer 50 seaters back in the COEX system and let CAL park or sub lease the 135s. Overall we lose about 30 planes in our fleet but sometime in 2009 COEX will not have any 135s. This is a good sign that CAL management realized they were not going to get CAL ALPA to give in on scope.

Can you guys abosrb that many pilots back into the fold without furloughing?

 

[veneratio]

30 planes is around 300 pilots. Attrition, No-Fly lines, COLA's, and making more lines (reducing them to 75) will take care of some of the layoffs.

Also, CAL removed the most-favored-nation clause and will also allow XJT to fly into CAL's hub airports this allows XJT to secure other CPA's or pro rate deals with Major Carriers. Perhaps United??? XJT also has 80 or 100 options for the XRJ.

The 30 or so aircraft that XJT will lease from CAL will be at cheaper rates than before. Perhaps all in all XJT can be profitable again???

 

[cybourg10]

Hopefully....with SWA hiring again and DAL possibly hiring later we could with the help of COLAs and no fly lines. Management has historically done anything and everything to avoid furloughs but if it is needed I don't see more than 200 being on the street for a short amount of time.

 

[SkyBoy1981]

Probably not many furloughs.. but if ONT closes I would expect LAX to go super senior. As a west coaster I would rather bid back to the right seat than commute across the country to a COEX base. I guess we'll have to hang on and see what happens.

 

[Chuck Steak]

way to stick it to those skywest queers!!!!

 

[homerjdispatch]

way to stick it to those skywest queers!!!!

Guess SkyWest will move on to purchasing MESA!!!!

Oh and maybe still get expressJet and the new contract with CAL....

 

[cybourg10]

Guess SkyWest will move on to purchasing MESA!!!!

Oh and maybe still get expressJet and the new contract with CAL....

SKW has every right to still buy XJT but our scope hasn't changed, they would still have to create 1 list with one contract (most likely represented by ALPA). The whole reason the deal didn't go thru before was because we would not give up on our scope language. Your Uncle J does not want that, how hard is it to understand this?