UPDATE 2-ExpressJet reports second-quarter loss
Reuters - August 08, 2007 7:36 AM ET
NEW YORK, Aug 8 (Reuters) - ExpressJet Holdings Inc. (
XJT), which provides regional air service for Continental Airlines (
CAL), on Wednesday reported a quarterly loss that widely missed estimates, burdened by costs from starting up its own scheduled service.
ExpressJet, which began flying under its own brand in April, said it had lost $26.4 million, or 49 cents per share, compared with a year-earlier profit of $23.3 million, or 39 cents per share.
Wall Street analysts on average were expecting a loss of 15 cents per share, according to Reuters Estimates.
Operating revenue fell 5.8 percent to $395.2 million.
ExpressJet, which was in a fee dispute with former parent Continental over 2007 rates, said a panel had decided that the rates originally presented by ExpressJet should be reduced by $14.2 million. The decision resulted in a $6.5 million decrease in the second-quarter's operating income, ExpressJet said.
The company was forced to find new ventures for 69 planes, or about a quarter of its fleet, after Continental canceled a capacity purchase agreement last year.
Its largest, and perhaps riskiest venture, is to fly its own scheduled service with about 42 of its 50-seat aircraft, connecting secondary cities such as Oklahoma City and San Diego.
The company also flies corporate air charters and has reached agreements with Delta Air Lines Inc. (
DAL) to provide the carrier with regional service. (Reporting by Aarthi Sivaraman)