SkyWest Inc has agreed to sell ExpressJet Airlines to United Airlines joint venture ManaAir for some $70 million in cash.
St George, Utah-based SkyWest expects the transaction to close in early 2019. United owns a minority stake in ManaAir, with the remaining share held by KAir Enterprises.
United describes KAir as an airline investment company "founded by seasoned airline managers", and says more information will be shared on ManaAir after it receives approvals from the US Department of Transportation and Federal Aviation Administration.
Based in Atlanta, ExpressJet operates regional jet services for United and American Airlines with a fleet of 128 aircraft, comprising 105 Embraer ERJ-145s, 14 Bombardier CRJ700s, eight CRJ200s and one CRJ100, Flight Fleets Analyzer shows. However, it is in the process of winding down flying for American, which has said that the contract with ExpressJet will not be renewed on expiry in April 2019.
As part of the sale to ManaAir, SkyWest says it will retain ownership of ExpressJet's CRJ aircraft, but lease 20 CRJ200s to ExpressJet for up to five years. ManaAir will take on the majority of the assets and assume the liabilities of ExpressJet for about $70 million in cash. Any assets excluded from the sale will be utilised or liquidated by SkyWest.
United has awarded ExpressJet additional flying following a competitive bid, says United. "Under the new agreement, the company will operate 25 United-owned Embraer 175 aircraft, which feature a special, 70-seat configuration versus the current 76-seat E175 configuration that's currently flying."
These aircraft will replace older jets, with the transition set to begin in the second quarter of 2019.
The sale of ExpressJet to ManaAir includes certain protections around flying by SkyWest Airlines, the other regional airline under SkyWest Inc, as well as priority to add 25 dual-cabin aircraft with United "should those opportunities arise", says SkyWest.
"Today's announcement provides further clarity and focus for the future," states SkyWest president and chief executive Chip Childs.
ExpressJet posted a loss of $32.5 million in 2017, improving upon a loss of $302 million in 2016, SkyWest financial filings show. In the third quarter of this year, it reported a loss of $230,000, compared with a loss of $9.99 million in the corresponding period a year ago.
The sale of ExpressJet to a United joint venture marks a return of sorts to the United-Continental group. ExpressJet was a wholly owned Continental subsidiary before it was sold in 2002. SkyWest disclosed plans to purchase ExpressJet in 2010 and closed on the deal later that year.
Source: Cirium Dashboard