United buying minority stake in ExpressJet

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United buying minority stake in ExpressJet
Photo Credit: Austin Deppe/Shutterstock.com

United Airlines will take a minority stake in regional carrier ExpressJet.

SkyWest will sell its ExpressJet subsidiary to a joint venture company called ManaAir for $70 million. United holds a "significant minority interest" in ManaAir, United spokesman Charles Hobart said. The scheduled closing date is early January. 

Atlanta-based ExpressJet operates a fleet of 147 aircraft, according to Planespotters.net. ExpressJet flies regional routes for major U.S. carriers, including United (under the United Express brand).

In conjunction with the deal, United has awarded ExpressJet the contract to operate 25 Embraer E-175 aircraft on order. Delivery of those 70-seat jets are scheduled to begin next year. The deal coincides with the end of ExpressJet operating regional flights for Delta. 

Martin Rottler, industry relations coordinator for Ohio State University's Center for Aviation Studies, called the deal "an interesting step in the consolidation of smaller regional carriers toward one major airline partner."

Mainline carriers, he noted, are using different methods to facilitate that trend. American has three wholly-owned subsidiaries, Delta has one wholly-owned subsidiary, and United has none but has made investments in Commutair, Air Wisconsin and now ExpressJet. 

"We believe this is going to provide our customers with a better travel experience. It is going to help us further align our product," Hobart said of the strategy. 

Under the purchase agreement, SkyWest will retain ownership of the Bombardier CRJ aircraft that ExpressJet currently flies, primarily for American Eagle flights. ExpressJet operates 34 CRJs, according to Planespotters. 

ManaAir will take ownership of the remainder of ExpressJet's fleet -- 50-seat Embraer ERJ-145s. ExpressJet uses those planes on United Express routes. 

As part of the deal, SkyWest also has agreed to lease 20 CRJ-200 50-seat aircraft to ExpressJet for up to five years.

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