Continental Airlines and ExpressJet agree to modify regional jet deliveries

Continental Airlines today announced that, as a result of current conditions in the U.S. air travel market, Continental, ExpressJet Airlines, Inc. and Embraer have agreed in principle to reschedule the delivery of Embraer regional jet aircraft. ExpressJet is expected to now take delivery of 36 regional jets in 2003, instead of 48, and 21 regional jets in 2004, instead of 36. The remaining 29 regional jets on firm order under the aircraft purchase agreement with Embraer will be delivered in 2005 and 2006. Continental purchases all of ExpressJet’s regional jet capacity, which operates as Continental Express.

The rescheduling of regional jet deliveries are subject to execution of definitive documentation and the approval of the board of directors of Continental.

“Continental’s strong relationships with both Embraer and ExpressJet allow us to reschedule these deliveries to better match our capacity needs resulting from current market conditions,” said Larry Kellner, Continental’s president.

Continental estimates that these aircraft delivery changes will not affect Continental Express’ estimated year-over-year capacity increases for the first and second quarters of 2003 of 25.5 and 29 percent, respectively. However,  Continental Express’ year-over-year capacity increase is now estimated at 31 percent for the third quarter of 2003 and 30 percent for the fourth quarter of 2003, with a 29 percent increase for the full year 2003.

Continental currently operates a fleet of 366 jets, and Continental Express, operated by ExpressJet Airlines, Inc., currently flies 196 regional jets.