In the end this is probably better for both sides. The animosity and bad blood between the two sides of SkyWest Inc. has gone on for way too long. SkyWest can refocus on one airline and ExpressJet can hopefully have a good future with United. Sometimes I wonder how different history of the regional airlines in the US could have been if XJT hadn't had such arrogant and poor management after they were spun off from CO.
We had just finished a new long term CPA of 7 years... when SKW attempted in 2008 to get us.. they failed.. in 2010 they tried again, had a 10 year CPA in place lined up with CO behind XJT's back, and then succeeded in the transaction as at that point CO basically told XJT they would do the deal or at the end of the current contract they had they would be COMAIR'd... soooooo hello SKW, ASA, XJT cluster f that transpired...
I thought the 7 year CPA was the result of SkyWest trying to buy ExpressJet.
If I remember my history correctly, XJT had already learned they were losing 69 aircraft worth of flying as allowed by the old CPA. CO expected XJT would return them and they could then be leased to Republic to do flying for CO. XJT shocked CO by exercising their first right to keep the lease on the airplanes and used them to start up the aquafresh painted money incinerator. Republic added CRJs to their certificate for a while to cover the flying.
When it became clear the branded operation would take down the whole company, XJT then turned around and signed a deal to fly some frames for DL, below cost, out of LAX and SLC. They had to pay the leases either way so they chose the DL CPA because it burned cash more slowly than the branded operation. That lowball contract led to a reset on rates in the ASA CPA with DL, which is when SkyWest management went to work. They negotiated the CO CPA to be flown with XJT. When XJT agreed to a new CPA at similar rates to the OO deal, the buyout offer was rescinded and SkyWest walked away with millions from Continental for terminating their agreement.
Then SkyWest bought XJT two years later for less than the first offer, eliminating a major competitor in bidding on new CPAs, and getting DL flying on the west coast back under SkyWest control.
Sort of correct but not really.... your timeline and circumstances are slightly off
The 7 Year XJT CPA was formally announced June 5, 2008. - the original press release:
"HOUSTON, June 5 /PRNewswire-FirstCall/ -- Continental Airlines (NYSE: CAL - News) today announced that it has reached a new seven-year capacity purchase agreement with ExpressJet Airlines, Inc. to provide regional jet service for Continental Airlines at rates that are lower than rates under its current agreement and more competitive with those offered by other regional service providers. The new agreement is effective July 1, 2008.
The new contract enables Continental to continue to benefit from the excellent service and substantial feed traffic provided by ExpressJet. The base agreement covers flying by ExpressJet of a minimum of 205 regional jets in the first year and a minimum of 190 regional jets thereafter.
In addition, ExpressJet has the right to return to Continental 39 Embraer 50-seat regional jets that ExpressJet currently uses for non-Continental contract flying. Continental plans to add the returned aircraft to the new agreement and withdraw from the agreement up to 30 of its Embraer 37-seat regional jets currently flown by ExpressJet for Continental. Continental will then sublease or ground all of the withdrawn Embraer 37-seat regional jets to better align regional capacity with current market conditions. Additionally, the agreement reduces the rent Continental charges ExpressJet on 30 other regional jets that ExpressJet will retain for seven years to fly at its own revenue risk.
Continental and ExpressJet also entered into a settlement agreement and release of all the parties' claims relating to payments and rates under the original capacity purchase agreement, including all disputes previously disclosed as possible matters for arbitration."
----- This was done RIGHT around the time SkyWest tried to get XJT the first time... The 69 plane fleet reduction was already in full swing at this point and things didn't go the way CO had intended, XJT exercised their right to retain the aircraft (KNOWING it was going to be at a loss) as a chess move against the plan by CO at the time to bring in CHQ to have a whipsaw regional bidder (UA isn't in the picture back then)... CO also even went after XJT to give up our proprietary W&B program on the 145 to CHQ... we refused... this started a period of a massive Pi$$ing match between XJT and CO management... The purpose of branded and DL contracts were to prove points and simply minimize loss while denying CO the ability to use those aircraft against ourselves. In addition, The BIGGEST failure of CO in the chess move was they released the most expensive lease rate 145's without regard to which aircraft of the 274 they were... the 69 they released ended up being the newest nicest 145XR's and 145LR's... the sudden loss of the most capable 145 in the world (XR) crippled CO in ways they didn't foresee... no other RJ that could fly for CO at the time (50 seats or less) could do what the XR could with payload and range... so you saw the shut down of IAH-BOI, IAH-BFL, etc... Hence why when 2010 came around... bad blood was running strong between CO and XJT
CO had basically stated to XJT Management if you do NOT go through with our back door negotiated new deal (10 year CPA for less planes) with SKW to acquire you; we will not renew your 7 year CPA when it runs out (5 years away) and you will cease to exist. The final chess move.
So there ya go... the real original CPA (7 Year XJT negotiated with CO) and the sale to SKW 10 Year CPA for XJT/ASA acquisition from 2010... Despite what SKW always tried to say and how XJT was sinking them... reality is much different. SKW negotiated that 10 year loss making XJT contract from day one. It was NOT our CPA at all... so cue the shooting star "The More You Know"