Expressjet flies solo: Will secondary routes and dollar beer spell success?

— -- If you've flown into Albuquerque, Jacksonville or San Diego lately you might have noticed a new airline in town: Expressjet. But despite the new branding and livery, Expressjet isn't really a new airline at all. Previously a regional carrier operating 37- and 50-seat regional jets under the Continental Express and Delta Connection brands, Expressjet decided to strike out on its own earlier this year, flying select routes under its own brand name.

For the most part, regional airlines have enjoyed a period of unprecedented prosperity in the post-9/11 world, even while their mainline network airline partners struggled and downsized their domestic operations. Regional airlines receive guaranteed revenue for feeding passengers from smaller cities into the larger network airline hub airports, while network airlines bear the costs for marketing, reservations and ticket sales. As network airlines reduced domestic capacity they offloaded many unprofitable routes to these burgeoning regional players who stand a better chance turning a profit by flying smaller aircraft between those city pairs.

With a guaranteed revenue stream and a successful business model, one may wonder why Expressjet decided to pursue a new course. Business travelers don't have to dive too far back in history to recall the saga of Independence Air, which ceased operations in early 2006 less than two years after the airline's transition from a regional feeder carrier at United Airlines' Washington Dulles hub to an independent airline. While the jury was still deciding the fate of Independence Air, I wrote a column questioning the airline's long-term survival. But I also predicted it was only a matter of time before other regional airlines struck out on their own and that one would eventually be successful as a standalone regional airline. Could that airline be Expressjet?

Trish Winebrenner, Expressjet's vice president of marketing, is determined to avoid the pratfalls that precipitated the demise of Independence. Independence's greatest mistake was that they tried to be a hub-and-spoke airline, Winebrenner told me. With the carrier's entire operation at Washington Dulles, one of United's biggest hubs, Independence Air was thus competing directly with United in many markets. "We chose to go a different direction," says Winebrenner, citing Expressjet's strategy to identify underserved markets capable of filling a 50-seat jet.