ExpressJet Holdings, Inc. (NYSE: XJT), parent company of regional and charter airline operator, ExpressJet Airlines, Inc., today announced the details of the first step of its multi-phase Operation: Green Light. ExpressJet expects the initial step of this Plan to provide up to $40 million in run-rate cost savings.
“The Board presented me with the challenge of returning ExpressJet to sustained profitability when I joined the company in April,” said Tom Hanley, President and Chief Executive Officer. “After a thorough review of ExpressJet’s cost structure, the ExpressJet team is launching our Operation: Green Light Plan. We believe this Plan will allow the Company to move forward and all ExpressJet stakeholders to benefit from a company that possesses a solid, financial foundation and sustainable profits.”
The Plan was developed in coordination with ExpressJet’s advisors, including Goldman Sachs & Co. and Seabury Securities LLC, an investment banking and consulting firm. The key elements of the Plan’s initial phase include:
* Reducing corporate overhead, including implementation of a hiring freeze for all current management openings;
* Increasing the Company’s focus on “safety at work” to reduce worker’s compensation claims and lower restricted cash requirements;
* Collecting revenue-related amounts currently owed under third-party contracts;
* Improving crew planning procedures to increase productivity and lower related travel expenses; and
* Increasing maintenance productivity while lowering vendor costs.
ExpressJet began implementing the Operation: Green Light during second quarter 2010 and expects to achieve up to $40 million in run-rate savings by 2012. As ExpressJet completes the implementation of the Plan’s initial step, it will begin detailing the next phase of cost savings opportunities, which will include a competitive review of all salaries and benefits. Hanley added, “The first phase of the Plan focuses on initiatives that will stem the losses ExpressJet incurred in the recent quarters. The next phase of the Plan will be designed to provide ExpressJet with a competitive cost structure and a stronger balance sheet to support growth and new, profitable opportunities.”
ExpressJet will provide an overview of its Operation: Green Light at the 2010 Bank of America Merrill Lynch Global Transportation Conference on June 16, 2010 at 8:45 am Eastern. A detailed presentation of the plan, as well as a webcast of remarks will be available on www.expressjet.com – Investors. Both items will be archived until July 2, 2010.