Of beggars and choosers

Sometimes, beggars can be choosers, but should they be? With all this airline consolidation going on, and airlines falling like Eos from the sky, one would think, wouldn’t one, that a money-losing little operation would be glad of a buyer or an offer to buy. But no, that’s not the case. ExpressJet, which has Xjet.bmp been bleeding red ink badly, said no to an offer from SkyWest, the big regional group. ExpressJet lost $70 million last year, in large part through its independent or branded flying, which it undertook after Continental Airlines cut back on the flying that it was paying ExpressJet to do. SkyWest, which owns SkyWest (that was predictable) as well as ASA, the former Delta subsidiary, had offered about $185 million for ExpressJet – a 63% premium over the closing price of ExpressJet shares. This was not good enough for the guys in Houston, who said no. Well, sort of. ExpressJet said that it really thought it was worth a little bit more, considering what it would bring to the combined entity, although SkyWest said it was “dismayed that ExpressJet did not honor SkyWest’s request to begin due diligence at the time SkyWest made its proposal. SkyWest intends to review its alternatives with respect to its proposal to acquire ExpressJet.” Given ExpressJet’s precarious position, one wonders.
SkyWest says that it is looking at other opportunities besides ExpressJet, and that it did not need the little carrier. And the little carrier, once owned by Continental, said it was talking to other possible purchasers.

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