The IPO of ExpressJet occured in April 2002. Continental held on to about 50% of the stock until early 2004, at which point they gradually sold the rest of it off to the point where they are today (less than 5%). The rest is best summarized below:
Understanding Our History (2/01)
By Capt. Bret Hinkie
Bret Hinkie is a Houston-based CALEx RJ captain. He is the volunteer coordinator for the CALEx pilots’ STARTeam (see p. 6).
It was a Monday, the morning of April 29, 1996. I was on my way to the airport for another day of cheating death for eight bucks an hour while trying to keep the sweat out of my eyes. A friend had encouraged me to fax a resume to some carrier called Continental Express, which I did just before running out the door. Continental has a commuter airline? The following Monday morning I was trying to wrap my brain around concepts like drift-down, PMR, and “slam-clicker.” I’m willing to bet a lot of the pilots at CALEx have a similar story. I hate to admit it, but I found out what the logo and paint scheme looked like when I showed up at MLU airport to hitch a ride for the interview. I didn’t understand the present, much less the past! Today, if I’m trying to put a flight plan into the FMS computer, it must have a beginning waypoint. Likewise, we as a pilot group, must know our beginning waypoint if we are to chart our course for the future.
The Past
The history of Continental Express is not as easy to trace as the history of Continental Airlines. Volumes are written about the major airlines, but very little is written about the commuter/feeder/regional carriers that have served them. In my own research, I have found the best information in bits and pieces. This shouldn’t surprise any of us, since Continental Express operated in “bits and pieces” for so many years. Our airline literally began as a rag-tag collection of assorted aircraft and companies in the mid-to-late ’80s. To put our past in perspective, let me first start with an extremely brief history of Continental.
Continental Airlines entered into the aviation arena as Varney Speed Lines in 1926, later becoming Continental Airlines in 1937, and flourishing for many years under the leadership of Robert F. Six. In 1978, the Airline Deregulation Act was passed, beginning more than a decade of turmoil at Continental. The infamous Frank Lorenzo used his self-created holding company of Texas Air Corporation to gain control of several airlines struggling in the post-deregulation era. These included Texas International, Continental, Frontier, People Express, Eastern, and Lorenzo’s own start-up, New York Air. The saga chronicling these transactions and Lorenzo’s negative impact on aviation in the United States has been studied and analyzed in numerous books. Rather than re-write history and risk getting it wrong, I suggest you look at our “must-read list” featured on the first page of this publication.
Following deregulation, major airlines abandoned many smaller cities when they could not fill the seats of larger jet aircraft. Airlines began to rely on the hub-and-spoke system using independent carriers to feed passengers from the smaller cities using profitable propeller-driven aircraft.
Many of these commuter or “feeder” carriers were eventually purchased by the major they served, but not all. Several independent carriers flying under the Continental Express name were never absorbed. These included Pioneer in Denver, Royale Airways in Houston, and Presidential Airways. Using BAe 146s, Presidential was the first carrier to fly jet aircraft under the Continental Express name from Washington. The first company to place the title of Continental Express on its aircraft was Air New Orleans using BE-99s (see photo). But the present-day Continental Express can trace its roots to the purchases of Texas Air Corporation.
When Frank Lorenzo went airline shopping, he inherited many of the commuter airlines that had code-share deals with the majors he acquired. People Express, based in Newark, owned a small northeastern commuter called Provincetown-Boston Airline (PBA), and Eastern had a code-share agreement with another northeastern commuter, Bar Harbor Airlines. Bar Harbor merged with PBA to create a feeder system at Newark. People Express also owned a Midwest commuter, Britt Airways. When Texas Air Corporation purchased People Express, Britt Airways’ fleet became the core of the Continental Express system in Houston and Cleveland. (Some of Britt Airways’ F-27 aircraft were also used to create a Continental Express operation in Guam feeding Air Micronesia!)
Continental had a large hub in Denver, CO. Rocky Mountain Airways, purchased by Texas Air Corp., provided CAL’s primary feed there. When Continental closed the Denver hub, Rocky Mountain’s operations and aircraft were moved to Houston.
The Present
Continental Express finally became a single corporate entity operating under the Britt Airways certificate in April 1993. You probably noticed the letters BTA next to your flight number on PDCs and flight plans. When I first came here to work in May 1996, Continental Express was an all-turboprop fleet consisting of BE-1900Ds, EMB-120s, and ATR 42/72s. The route structure consisted mainly of out-and-back flying from the hubs to destinations within 500 miles (see route map).
In September 1996, Continental Express placed the first orders for 200 ERJ-145s. The first revenue service flight took place in April 1997 from Cleveland. Originally, these jets were portrayed as replacements for the turboprop fleet. It has become very obvious, however, that the ERJ-135/145s have been used to expand the fleet at an unprecedented rate – about 40% in 2000. The company now predicts that all turboprops will be off the property by 2004.
With a 1,000-nm range, the ERJ-135/145s are not only being used on new destinations (long and thin routes), but also to supplement and even assume what were once Continental routes. Today, Continental Express operates a fleet of 164 aircraft carrying more than 8 million customers each year with more than 1,000 daily departures to more than 105 cities (see route map).
From our humble beginnings as a hodge-podge of various airlines thrown together and struggling to survive, Continental Express has grown into a large, viable, and profitable business. Today’s Continental Express is totally different from the early days. It is also vastly different from just a few years ago when we negotiated our present contract. Like the aviation industry generally and our company, the pilot contract must evolve to keep up with the times and meet our pilot groups’ needs. An industry-leading airline should provide and can afford a contract that reflects its standing.
