SkyWest puts the screws to Expressjet

[~~~^~~~]

Exhibit #1: SkyWest already has negotiated to whack Expressjet's contract with Continental and Continental is fully on board:

Exhibit 99.3​

[Continental Airlines Logo]​

CONFIDENTIAL
April 7, 2008
Mr. James B. Ream
Chief Executive Officer and President
ExpressJet Holdings, Inc.
700 North Sam Houston Parkway, Suite 200
Houston, TX 77067​

Mr. George R. Bravante, Jr.
Chairman
ExpressJet Holdings, Inc.
700 North Sam Houston Parkway, Suite 200
Houston, TX 77067​

Dear Jim and George:​

We understand that SkyWest, Inc. (“SkyWest”) has delivered to you an offer to acquire ExpressJet Holdings, Inc. (“ExpressJet”). In connection with your consideration of such offer, we wanted to inform you of our understanding with SkyWest regarding a new capacity purchase agreement (“CPA”) and our intentions regarding our existing contractual relationship.​

First, we confirm that we have negotiated a new CPA with SkyWest, which would become effective if SkyWest is successful in acquiring ExpressJet (which, in turn, is subject to due diligence, among other things), and that we would consent to the change of control that would occur upon such an acquisition.

Second, absent our entering into a new CPA with savings of the magnitude we have negotiated with SkyWest, we currently expect to deliver to ExpressJet on June 28, 2008, a notice to withdraw 51 of the existing 205 Covered Aircraft from the current CPA, beginning in December 2009. Further, although we have the right to terminate the existing CPA at any time, we currently anticipate we will not extend the term of the current CPA (which we must do, if at all, by December 31, 2008), and thus the current CPA would simply expire in accordance with its terms beginning on December 31, 2010, with the expectation that all aircraft would be removed from the current CPA by the end of 2012.​

We hope this information is helpful to you.​

Sincerely,​

Jeffrey J. Misner
Executive Vice-President and Chief Financial Officer
Continental Airlines, Inc.​

 

[flyboyzz1]

sorry but this is already been posted.

 

[~~~^~~~]

Exhibit #2: Jerry Atkin insists on breaking ALPA's contract. Read the seventh paragraph, if nothing else:
[skywest, inc. logo]

Confidential

April 7, 2008​

Mr. James B. Ream
Chief Executive Officer and President
ExpressJet Holdings, Inc.
700 North Sam Houston Parkway, Suite 200
Houston, Texas 77067

Mr. George R. Bravante, Jr.
Chairman
ExpressJet Holdings, Inc.
700 North Sam Houston Parkway, Suite 200
Houston, Texas 77067

Dear Jim and George:
I enjoyed speaking with each of you by phone earlier today regarding this letter. On behalf of the Board of Directors of SkyWest, Inc., I am writing to express our interest in acquiring ExpressJet Holdings, Inc. (“ExpressJet”) and to make a proposal for such a transaction. This transaction would represent a compelling combination and excellent strategic fit for our companies, and create superior value for our respective stockholders.
We are prepared to acquire all of the outstanding shares of ExpressJet common stock at a purchase price of $3.50 per share in cash. This represents a significant 59% premium over ExpressJet’s closing price today and a 63% premium over ExpressJet’s average closing price for the last 30 days. We believe that $3.50 per share is a full and fair price for ExpressJet’s common stock and provides an attractive opportunity for your stockholders to maximize the value of their investment in ExpressJet. This transaction would not be subject to a financing condition or approval by our stockholders. We would finance the purchase price with existing cash on hand and, if appropriate, other readily available financing.
We have negotiated a new capacity purchase agreement with Continental Airlines, Inc., which will become effective upon satisfactory completion of due diligence and consummation of the proposed transaction. In connection with that agreement, Continental would consent to the change of control that would occur upon the consummation of the proposed transaction. For your information, Continental has informed us that they are not in discussions with any other carrier regarding a Capacity Purchase Agreement.
We believe that our proposal would be in the best interests of ExpressJet and its stockholders, particularly given the uncertainty in the airline sector, the high price of oil and, as outlined in your public filings, the risks of your business related to your relationship with Continental. We also believe that our proposal would be beneficial to other ExpressJet constituencies. Additionally, we believe our proposal is compelling given your current cash burn rate and the need to satisfy the redemption of approximately $130 million of convertible notes this summer.
We have engaged Raymond James as our financial advisor and Parr Waddoups and Skadden Arps as legal counsel to advise us in this transaction. We and our advisors are ready to meet with you and your advisors at any time to discuss all aspects of our proposal and to answer any questions you or they may have about the proposal.
This proposal is subject to reaching a mutually satisfactory definitive acquisition agreement, our completion of due diligence, the completion by Continental of due diligence and final approval of the transaction and Capacity Purchase Agreement by our Board of Directors. We would like to commence the due diligence and negotiation of an acquisition agreement as soon as possible. Given our familiarity with your business and the industry, we are confident that once our management team and legal and financial advisors are given access to ExpressJet’s books and records, they will be able to complete their due diligence on an expeditious and accelerated basis. Continental will coordinate its due diligence efforts with you.
This proposal is also conditioned upon ExpressJet obtaining a clarification and/or amendment, satisfactory to us, to the collective bargaining agreement (the “CBA”) between ExpressJet Airlines, Inc. and the pilots in the service of ExpressJet Airlines, as represented by the Air Line Pilots Association, International (“ALPA”), dated December 1, 2004. First, we need clarification that nothing in the CBA (including, but not limited to, Section 1.D.3) would obligate us to merge the operations of ExpressJet Airlines with those of any or all of our currently-owned airline subsidiaries, or any airline subsidiaries we may acquire in the future, or otherwise apply to us or any of our subsidiaries or affiliates (other than ExpressJet and its subsidiaries). Secondly, we need the agreement of ALPA that the certain undated letter among ExpressJet, XJT Holdings, Inc., ALPA and the ExpressJet MEC, appended as pages 223 through 226 of the CBA, shall be revoked and deemed null and void, prior to the conclusion of the acquisition.
To effect this transaction, we and a newly-formed wholly owned subsidiary would enter into a definitive acquisition agreement with ExpressJet. Assuming that the conditions relating to the amendment of ExpressJet’s CBA discussed in the preceding paragraph has been fulfilled, we would be prepared to structure the transaction as a first-step tender offer followed by a second-step acquisition. The tender offer would be conditioned on the tender of a majority of the fully-diluted shares of ExpressJet’s common stock, the receipt of all necessary regulatory approvals, the absence of a material adverse change and other customary conditions. In order to allow for a second-step “short form” acquisition, we also would anticipate receiving a customary “top up option” to purchase an amount of ExpressJet common stock that, when added to the number of shares owned by SkyWest at the time of exercise of the option, constitutes one share more than 90% of the fully diluted shares of ExpressJet common stock. We and our legal counsel have completed a preliminary review of the transaction in light of regulatory approvals and do not foresee any impediments to the completion of the transaction.
Subject to events as they may develop, and depending upon ExpressJet’s response to our proposal, we hope to be able to discuss this with you and your Board on a non-public basis. We ask that you advise us of any plan by you to make our proposal public prior to doing so.
We hope you share our enthusiasm for the proposed transaction and we look forward to hearing from you. Please contact me as promptly as possible to discuss how we may best proceed, and in any event, please respond by next Monday, April 14th.
Sincerely yours,


Jerry C. Atkin
Chairman and Chief Executive Officer
SkyWest, Inc.

 

[XPOO]

Yeah, that was posted already, as well.

 

[homerjdispatch]

THIS JUST IN >>> Click here

 

[SilverandSore]

THIS JUST IN >>> Click here

Classic!

 

[Terry Hunter]

THIS JUST IN >>> Click here

http://www.youtube.com/watch?v=EeQKMpEoW70

LOL

 

[jws717]

THIS JUST IN >>> Click here

very nice

 

[CFI2766]

Can Jerry do an end-around on ALPA like this? Seems like he really doesn't want (no suprise, granted) XJT to continue to be ALPA.

Seems as though the stage would be set for 'new' group to step in and take the flying from the established XJT group. That is, if the XJT guys won't do the flying for what he, Jerry, wants, then a new group could then be created to fill the void.

Isn't this kinda how Freedom originated?

 

[Andy Neill]

Yeah, just like he did with ASA.....oh wait....he didn't do that after all....never mind.

 

[Superpilot92]

Can Jerry do an end-around on ALPA like this? Seems like he really doesn't want (no suprise, granted) XJT to continue to be ALPA.

Seems as though the stage would be set for 'new' group to step in and take the flying from the established XJT group. That is, if the XJT guys won't do the flying for what he, Jerry, wants, then a new group could then be created to fill the void.

Isn't this kinda how Freedom originated?

They would have to shut XJT down to pull that off because XJT has a scope clause to protect against that. Mesa didn't at the time hence Freedom. Either way it sucks. Skywest mgmt has a big force to work against with XJTALPA if its going to attempt to undermine the pilots. XJT has a solid pilot group who i have no doubt wont take any BS. Good luck guys.

 

[flatspin7]

THIS JUST IN >>> Click here

Actually it went down more like this......

http://members.shaw.ca/rlongpre01/moon.html

 

[JoeMerchant]

Hey Fins...I'll take Jerry over ALPA any day of the year....Who would you rather have at the table?

After all he negotiated more scope for ASA than ALPA even thinks it is allowed to negotiate...How's that for ironic....ALPA says they can't negotiate DAL flying for ASA pilots....and Jerry does negotiate it....

Jerry has credibility with many of us....ALPA not so much.....

 

[B.T.Justice]

Theres two thing I can count on everyday.

1. The sun coming up.
2. Pilots find something to b##ch about.


Before you say that Jerry is trying to get rid of ALPA, or replace the current group of pilots; Do you know what pages 223 to 226 dictate? There may be a change of control provision or something that isn't in the best interest of SKYW. I doubt they are seeking financial concessions, it's not their style. They know that to be a successful company, the employees need to be happy.

I don't think XJT has many options. It would have been better to bow to Continentals demands. I've been through the FLYi experience, so I can tell you how this one ends; if they stay on the same track.

I think it says alot about SKYW, that they are only interested in acquiring top tier airlines. Airlines already on there game, but in need of a change of course. Hey they could have gone after Mesa. How would you like to have those guys working for your holding company. No thanks.

 

[jehtplane]

They would have to shut XJT down to pull that off because XJT has a scope clause to protect against that. Mesa didn't at the time hence Freedom. Either way it sucks. Skywest mgmt has a big force to work against with XJTALPA if its going to attempt to undermine the pilots. XJT has a solid pilot group who i have no doubt wont take any BS. Good luck guys.

Yeah right.

 

[Superpilot92]

Yeah right.

Thanks for your substantial contribution to the thread.

 

[veneratio]

Those pages in the contract are very important and I doubt ExpressJet pilots will allow for them to become void.

 

[doh]

Hey Fins...I'll take Jerry over ALPA any day of the year....Who would you rather have at the table?

After all he negotiated more scope for ASA than ALPA even thinks it is allowed to negotiate...How's that for ironic....ALPA says they can't negotiate DAL flying for ASA pilots....and Jerry does negotiate it....

Jerry has credibility with many of us....ALPA not so much.....

Joe, ALPA sucks! They have done everything in their power, at least at the national level, to Eff the regionals over. BUT, Jerry is an even bigger POS than ALPA. He is a cancer on this industry. I am sorry for anyone who has to choose between these two worst case scenarios.

 

[JoeMerchant]

Joe, ALPA sucks! They have done everything in their power, at least at the national level, to Eff the regionals over. BUT, Jerry is an even bigger POS than ALPA. He is a cancer on this industry. I am sorry for anyone who has to choose between these two worst case scenarios.

He has helped us here at ASA....He negotiated more job protection for ASA than ALPA did....He made changes in our GO that the previous owners couldn't do over the past 29 years....

So far I am impressed....

In a way...he has more leverage than ALPA....Think about it....Like him or not he is good at what he does....I'm not looking for a friend...I'm looking for an effective leader that is good at what they do...

If you want a friend....get a dog....

 

[~~~^~~~]

He has helped us here at ASA....He negotiated more job protection for ASA than ALPA did....

In a way...he has more leverage than ALPA..../quote]Well, duh. He runs the place, Uncle's business, owns a chunk of it....

Job protection? At Jerry's pleasure. It pleased Jerry to strip 26 jets from ASA. It was a violation of status quo.

Your loyalty is not reciprocated. Ask Jerry who you work for.

All a matter of perspective, I guess....