Making money as a standalone ERJ145 operator is not easy. Doing it from tertiary markets in the US is even harder. And so, for the second time in its history, ExpressJet is pulling the plug on standalone operations.
The aha! brand will halt operations immediately as the company seeks Chapter 11 bankruptcy protection.
Despite the valiant efforts of our employees to overcome challenges, and despite great support by our cities and airports – especially Reno-Tahoe and the community there, we arrived at a point where termination of operations was in the best interest of our stakeholders.– Subodh Karnik, Chairman and CEO of ExpressJet
The company cited several factors that impeded its ability to grow as planned. Interestingly, none of them were tied to an inability to recruit or retain pilots. Instead, the company saw issues with:
- Lack of available aircraft (which is hard to believe, as no one else really wants them – apparently tied to engine overhaul challenges)
- Difficulty ramping up operations at new airports (easier to believe, particularly with staffing issues)
- High fuel costs
- Limited demand because COVID-19 is still very much a real thing
- Inability to establish the hotel partnerships that were key to its business model
The last item on that list – inability to secure hotel partnerships – is perhaps the most surprising. But with demand for rooms across the country generally outstripping supply and rates higher than normal, it is not too hard to believe that hotels in the company’s target leisure markets did not feel compelled to cut a deal with the airline to drive additional bookings.
The airline will not assist displaced passengers with onward travel arrangements. It is also referring them to their credit card company for refund of any unused tickets rather than directly issuing the refunds.
And, while the company chose a Chapter 11 filing that allows for reorganization under the US Bankruptcy code, it expects to enter into an orderly, court-supervised liquidation in the weeks ahead.
More on aha!’s history:
- aha! to launch with Reno base, eight destinations
- ExpressJet aims to fly as aha!
- ExpressJet secures approval for independent re-launch
- ExpressJet plans comeback this Spring
- ExpressJet to wind down operations on 30 September
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