Posted on: 07 June 2010 by Mark Howells
ExpressJet Holdings, parent company of regional and charter airline operator, ExpressJet Airlines, has announced the details of the first step of its multi-phase Operation Green Light through which it expects the initial step of the 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,” explained Tom Hanley, the company’s new president and CEO. “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 key elements of the plan’s initial phase include: reducing corporate overheads, including implementation of a hiring freeze for all current management openings; increasing the company’s focus on “safety at work” to reduce worker 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 has already begun implementing Operation Green Light 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."