ExpressJet cancels Upgrade classes....

[flyboy06]

Press ReleaseSource: ExpressJet Holdings, Inc.

ExpressJet Reports Second Quarter 2007 Results
Wednesday August 8, 6:34 am ET
HOUSTON, Aug. 8 /PRNewswire-FirstCall/ -- ExpressJet Holdings, Inc. (NYSE: XJT - News) today reported a second quarter loss of $26.4 million, or $0.49 diluted earnings per share.

SECOND QUARTER REVIEW
Operational Review
Second quarter net revenue totaled $395.2 million, consisting of: $360.1 million from the company's capacity purchase agreements with Continental Airlines and Delta Air Lines (which began June 1) and charter flying; $28.2 million from the ExpressJet branded operation that commenced on April 2; and $9.3 million from the provision of third-party ground handling and maintenance services.
During the quarter, ExpressJet continued to transition aircraft from its capacity purchase agreement with Continental: 14 aircraft were painted, modified and placed into the ExpressJet branded network; ten aircraft were painted, modified and placed under the Delta capacity purchase agreement; and six, were marketed for ad-hoc charter opportunities pending the start of Delta pro-rate flying on July 1. As of June 30, 66 aircraft had been transitioned from the company's capacity purchase agreement with Continental. The final three planes are expected to transition in August and will be placed in branded service. After the final transition from Continental, the expected aircraft allocation will be 224 aircraft dedicated to contract flying and 50 aircraft dedicated to branded flying, including the eight allocated to the Delta pro-rate agreement.
Available seat miles under the contract flying ExpressJet performed for Delta and Continental totaled 2.8 billion and represented 196,799 block hours across both systems. During the first month of operations under the Delta capacity purchase agreement, ExpressJet operated at a perfect 100% completion factor. ExpressJet also flew 756 charter segments during the second quarter.
ExpressJet began its ExpressJet Airlines branded operation on April 2 and completed the roll-out on June 12. The ExpressJet network consists of 42 dedicated aircraft serving 24 cities in the West, Central and Southeast regions of the United States. Traffic continued to build during the quarter to a load factor of 50% in June, and the company ended the quarter with 200.3 million revenue passenger miles and had a load factor of 39%.
During July, the first full month of branded flying, including the ExpressJet network and Delta pro-rate operations, ExpressJet flew 193.7 million revenue passenger miles on capacity of 297.1 million available seat miles for a load factor of 65%.
Subsequent to quarter end, ExpressJet and Continental received the final decision for their arbitration regarding 2007 block hour revenue rates under the companies' capacity purchase agreement. The panel determined that the 2007 budgeted rates originally presented by ExpressJet should be reduced by a total of approximately $14.2 million (which includes the margin of 10% the company earns on its expenses under the agreement). This revenue reduction resulted in a $6.5 million decrease in operating income recorded in the second quarter. This adjustment reflects the variance between the 2006 rates used to book revenue prior to the arbitration decision plus arbitration fees and expenses.
Financial Review
ExpressJet's second quarter 2007 operating income reflected a (10.8%) operating margin, compared with an operating margin of 8.5% for the second quarter 2006. The principal factors contributing to the company's negative operating margin were its continued transition of 30 aircraft from the Continental capacity purchase agreement; start-up expenses associated with branded flying (including Delta pro-rate flying which began on July 1) and the Delta capacity purchase agreement and the Continental arbitration ruling.
ExpressJet ended the second quarter of 2007 with $294 million in cash and cash equivalents, including $14.5 million in restricted cash, down $8.9 million from the $302.9 million reported at year-end.
Capital expenditures totaled $20.6 million for the second quarter 2007 compared to $3.5 million during the same period in 2006. ExpressJet anticipates capital expenditures totaling approximately $12 million for the remainder of 2007.
During the second quarter, Holdings did not make any purchases under its previously announced securities repurchase program. "


You're right, my mistake, three planes were still with CAL. However, they were also making revenue with CAL. So i'd again venture to say most of the expenses were incurred during Q2. Q3 wasn't any better, hopefully Q4 wont be as much in the red. It's a great company and deserves to do well....hopefully XJT can pull into the black sometime in the future....

But they were painted and sat Idle into Q3...I know, I parked a few in LCH waiting for XM installation

 

[unreal]

I hate to dig this thread back up, but according to one of Jim Ream's recent employee voicemails, much of those start-up costs should be drastically reduced by this quarter or next. Remember, those of us who work here do hear more of the real scoop than what the armchair quarterbacks read through Yahoo Finance.

While I'm certain we will see some sort of loss for 4Q 2007, I highly doubt that with the increasing load factors and yields in Branded flying, reduction in startup overhead costs, and lesser training costs for the quarter, that this loss will be nearly as bad as the previous two quarters. Remember, our operating revenue for Branded was a full $34M more than what was expected last quarter. If we can keep up that trend it shouldn't be long before we can at least break even or show a small profit. As was said earlier, we were expected to lose money for a good while as this was all getting underway. Everyone is acting so shocked now that we are, though nobody seems to care that we're actually doing better than expected.

EDIT: Strangely enough, I've noticed that the majority of the really militant anti-XJT posts are from RAH pilots.

 

[unreal]

Ah, and I should mention that in the 8-K released on 10/22 (which is what we should be discussing, not an outdated one from August used to try to force a point), XJT's operating expenses for the 3Q 2007 were $84M more than what they were in 3Q 2006. Fuel costs increased by $39M from 2006, which has to do with higher oil prices in general and higher prices paid by Branded, but what of the other $45M?

Some of that is marketing, some of that is hiring, but the report lists a 61% increase between 2006 and 2007 for "other operating expenses" that include many of these transition costs associated with Branded operations. That's a full $17M that should be brought down in the coming quarters. Considering our last quarterly loss was $22M, I think we're getting somewhere. Add in increasing yields in Branded flying (XJT is starting to play hardball with fares finally), and things aren't looking too bad.

Call me an XJT cheerleader if you'd like. I just have faith in the company by looking at the numbers.

 

[flyguy81]

i don't care one way or the other about xjt's financials. either it works or it doesn't. either way it doesn't effect me any. for the sake of the employees, i just hope the bosses know what they're doing.

 

[CFIse]

Nobody knows if branded flying is making money, and unless you're a restricted employee at ExpressJet it's very unlikely you'll ever find out.

Now ExpressJet may or may not make claims as to the profitability of branded flying, but they can do that by shifting the proportion of fixed expenses assigned to the branded flying thus changing the total expense and manipulating the profitability. They can do that quarter by quarter and manipulate the numbers as they deem appropriate.

All we can do is guess at the likelihood that branded flying is making money, and the smart money says not.