First Quarter Financial Highlights

� Reported an $11.4 million loss for the first quarter 2009 versus a $35.7 million loss in first quarter 2008 - a 68% improvement year-over-year;
� Incurred large year-over-year variances from expense items, such as aircraft rent and fuel associated with the 214 aircraft we are currently flying for Continental being removed from our income statement as part of the Amended Continental CPA;
� Experienced increased wage pressure due to the seniority of our workforce;
� Increased revenues within our corporate aviation division by 26.6% year-over-year, excluding fuel, because it is treated as a pass-through expense:
� Used $10.1 million in cash flows from operations, versus $36.8 million in first quarter 2008, offset by investing and financing activities including:
- Repurchasing $2.8 million in equity and $1.8 million in par value of 11.25% Convertible Secured Notes due 2023;
- Borrowing $5.0 million under a revolving line of credit (the "Citigroup Credit Facility"), from Citigroup Global Markets, Inc. ("Citigroup") using a portion of our auction rate securities ("ARS") as collateral; and
- Selling $9.2 million on non-core assets to increase the strength of our balance sheet.

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First Quarter Operational Highlights

� Experienced decreased utilization of 12.3% percent based on lower utilization under our Amended Continental CPA;
� Continued to streamline operations to recognize efficiencies in our operations;
� Began a modification line of interior upgrades to add ovens, power and upgraded sidewalls and panels on our 41-seat aircraft;
� Scheduled two additional aircraft for conversion to our 41-seat configuration which will bring the total 41-seat fleet to eight aircraft; and
� Added 3 stations to our aviation services division bringing the total to 31 stations ground handled by us for Continental as well as other operators.

Outlook

As ExpressJet completes its transition from the restructuring initiated in 2008, we will continue to focus on three core areas: contract flying for mainline partners; long-term charter agreements and ad-hoc charter arrangements for customers seeking customizable travel solutions (corporate aviation) and aviation services. As we now generate revenue for actual hours flown, as opposed to hours scheduled, in our contract flying operations, our reported results will more closely follow the general trends of the aviation industry.

Currently, the industry is experiencing a significant decrease in demand due to the global economic recession. If demand declines further, the number of block hours we fly for mainline partners could decrease. However, those reductions could be somewhat offset by our partner's capability to utilize our smaller aircraft to economically serve markets that may not otherwise be viable in this reduced demand environment. We will continue to focus on providing the most economically efficient and reliable service possible to best position ourselves for potential opportunities and to weather challenges within the airline industry.

We will also continue to market our unscheduled charter services to customers seeking customizable travel solutions. The corporate aviation market has recently suffered from negative media due to public scrutiny in the current economic climate with government bailouts occurring in many industries. Contrary to this trend, our corporate aviation division is experiencing growth because we have a large fleet of dedicated aircraft and offer a greater number of seats than most of our competitors. We also provide one of the most reliable products in the industry and we have never experienced a controllable cancellation in this operation. We expect our revenues to continue growing in this division as we enter into additional contracts and continue to generate brand awareness.

We also continue to leverage our aviation services segment. This segment includes providing customer and ramp ground-handling services to Continental and other operators, interior and seat refurbishments and aircraft painting. The ground handling operations allows us to generate additional income that helps to offset the cost we incur to perform these services in support of our other operations and provide a seamless product to our partner's customers.

Remember how I said on Friday that regional carriers were having trouble placing their 50 seat jets? Apparently, that doesn’t apply to ExpressJet. The airline will be putting 10 of its Embraer ERJ-145 aircraft into service with United this summer.

It’s an interesting agreement in that it’s not very short term (as they did during Spring Break for United last year), but it’s not long term either. ExpressJet’s Director of Communications Kristy Nicholas told me in an interview that the airline will start flying for United at the beginning of June and it will go through the summer until early September. There will be 10 aircraft dedicated to the operation during that time and they will fly primarily out of the Washington/Dulles and Chicago/O’Hare hubs.

The flying will be done under an ACMI lease (that’s Aircraft, Crew, Maintenance, and Insurance), so it’s effectively the same as the cost plus flying that has traditionally been done by regionals with their jets. These planes will actually be aircraft used in their charter division, since the rest are flying with Continental. It seemed like a very large chunk of airplanes to be devoting (a third of their fleet), but Kristy informed me that the summer is actually their slow charter season. They do a lot of college sports charters and those obviously aren’t happening much when school is out.

Interesting, however, that SkyWest is doing prorate work beginning the same time this temporary gig starts for ExpressJet. So is this replacing some SkyWest flying? According to United spokeswoman Megan McCarthy, no.

United signed a short-term contract with ExpressJet Airlines to provide 10 Embraer ERJ145 aircraft for peak demand summer flying. ExpressJet approached United with the opportunity to operate flights with extremely competitive costs for flying we would not be able to provide for our customers otherwise.

This flying will have a minimal impact on our capacity for the year, representing an increase of less than one-tenth of one percent.

Sounds like a win-win for everyone here. United gets some cheap flying that can probably make them some money and ExpressJet gets to prevent their planes from sitting on the ground all summer.