Tuesday, August 10, 2010

SkyWest to acquire ExpressJet

A couple of months ago, we learned the unfortunate news that Houston-based Continental Airlines would be merging with United. The Continental name will disappear, and the merged airline's corporate headquarters will be located in Chicago. Now comes word that Houston's other hometown airline, ExpressJet, is set to vanish as well:
Consolidation in the U.S. airline industry has trickled down to the nation's regional carriers. The USA's largest regional operator -- SkyWest -- today announced that it plans to acquire Houston-based ExpressJet, another regional carrier.

The Houston Business Journal writes that "as per the agreement, ExpressJet will be folded into SkyWest subsidiary Atlantic Southeast Airlines, based in Atlanta. It is expected that ExpressJet will move its corporate headquarters to Atlanta, but maintain an operational support structure in Houston."

ExpressJet was once a Continental Airlines subsidiary known as Continental Express. It later became an independent company but has continued to serve as Continental's regional carrier under the Continental Express brand. It also provides regional services for United Airlines under the United Express brand, operates charter services, and provides the aircraft for Branson AirExpress, an airline serving the Missouri entertainment hub from several cities. ExpressJet attempted to operate some services as a stand-alone carrier in 2007 but ended that experiment the following year.

This is SkyWest's second attempt at an ExpressJet takeover; the first attempt in 2008 was rejected. However, given the ongoing trend towards airline consolidation in general and the United-Continental merger in particular, this time the acquisition made sense from a business perspective.

Nevertheless, it's another blow for Houston, which will lose another corporate headquarters as well as some jobs. For example, a friend of mine who works for ExpressJet has indicated that he expects to be relocated to Atlanta sometime in the future.

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