Gregory Polek has spent his entire career in aviation journalism with AIN, starting as a proofreader and assistant to then-managing editor Mary Mahoney in 1995 after serving an internship with&nbsp;New Jersey Monthly&nbsp;magazine and completing his B.A. degree in English/Writing at New Jersey’s William Paterson College. By 1997 Polek accepted a position as an associate editor, covering the regional airline beat for&nbsp;Aviation International News&nbsp;in place of retiring industry veteran Don Anderson. The assignment took Polek across North America and Europe to profile regional airlines varying in size and mission from the likes of floatplane operators Kenmore Air and Chalk’s Ocean Airways to regional jet operators such as SkyWest and American Eagle. Today, in his dual role as Air Transport Editor and International Airshow Editor, Polek writes, edits, and manages AIN’s commercial aviation content while overseeing each of the company’s daily international air show publications in Paris, Farnborough, Singapore, and Dubai. Most recently Polek has assumed oversight of daily coverage of the Helicopter Association International’s annual Heli-Expo convention.

Senior Editor

Gregory Polek

The consolidation of the regional airline industry continued unabated last month, as St. George, Utah-based SkyWest revealed plans to acquire Houston-based ExpressJet. The $133 million transaction will involve a direct purchase by SkyWest's Atlanta-based subsidiary, Atlantic Southeast Airlines (ASA), of all of ExpressJet's common shares for $6.75 each in cash. The boards of directors of both SkyWest and ExpressJet have each unanimously approved the definitive merger agreement, which remains subject to receipt of certain regulatory approvals, approval of ExpressJet stockholders and other customary conditions. The parties expect to close the transaction during this year's fourth quarter.&nbsp;

ASA has negotiated the principal terms of a 10-year capacity purchase agreement with Continental Airlines, which would become active upon the consummation of the ExpressJet merger. ExpressJet now flies 206 Embraer regional jets for Continental, 32 for United Airlines and six in its charter unit, while ASA flies 160 Bombardier CRJs as a Delta Connection and United Express carrier. Including SkyWest Airlines' 292 airplanes, the combined fleet will total 696 aircraft–by far the largest in the regional airline industry.&nbsp;

Upon completion of the merger, ExpressJet would become a wholly owned subsidiary of ASA, whose Atlanta headquarters would serve as the head office of the combined company, while it maintains a so-called operational support structure in Houston. The parties expect both airlines to continue to operate under separate operating certificates until they complete the regulatory process for combining them under a single certificate. Pending receipt of that single operating certificate, Atlantic Southeast intends to move "certain" existing ExpressJet support functions to Atlantic Southeast and SkyWest upon consummation of the transaction.&nbsp;

SkyWest CFO Brad Rich said the company expects to complete the integration of ExpressJet into ASA in 12 to 18 months, at which point, he added, SkyWest will begin to fully benefit from the merger. Rich estimated that the transaction will result in a 45- to 50-cent earnings per share benefit once the company manages to combine the two airlines' operating certificates.&nbsp;

The successful negotiation comes barely two years after SkyWest's previous, <a href="?q=node/16251">failed attempt</a> to acquire ExpressJet. During that 2008 effort, ExpressJet rejected SkyWest's $3.50 per-share offer, then signed a new capacity purchase agreement with Continental that effectively prompted SkyWest to withdraw its bid.&nbsp;

"There were certain factors outside our control back in 2008, when we also expressed interest in ExpressJet," said Rich. "We have been anxious and been looking forward to a relationship with Continental for a long time. We have watched ExpressJet for a long time and when you combine some natural timing, kind of evolution, with the fact that we continue to have great respect for the operation at ExpressJet itself, we just saw an opportunity here to re-engage. We have negotiated a fair contract with Continental, so everything–the timing, the terms and conditions–all of it just kind of came together at this particular time."&nbsp;

News of SkyWest's latest acquisition came barely a month after <a href="?q=node/25245">Delta Air Lines announced that it had agreed to sell two</a> of its wholly owned regional airline subsidiaries to rival regional airlines. The major airline sold Mesaba Airlines to Memphis-based Pinnacle Airlines for $62 million. Simultaneously, it sold its Compass Airlines subsidiary to St. Louis-based Trans States Holdings for $20.5 million.&nbsp;

Cincinnati-based Comair now stands as the last wholly owned regional subsidiary of Delta. Meanwhile, American Airlines continues attempts to divest itself of its American Eagle subsidiary. It first announced the possibility of a sale in 2007, but it suspended its plan the following year due to unfavorable economic and market conditions.&nbsp;

SkyWest to acquire ExpressJet 

The consolidation of the regional airline industry continued unabated last month, as St.

2024 Corporate Aviation Leadership Summit

AIN Products

SUBSCRIPTIONS

RESOURCES

ABOUT AIN