Houston-based regional airline ExpressJet announced here at NBAA’06 that it planned to open a new division to fly corporate charter services using 10 Embraer ERJ 145XRs scheduled for removal from its Continental Express feeder network. Plans call for the new unit, called ExpressJet Corporate Aviation, to start operations in December and absorb all 10 ERJ 145s by next May. The airplanes will continue to hold their standard complement of 50 passenger seats but with amenities such as XM Satellite radio through an agreement with LiveTV.

ExpressJet plans to fly the airplanes under its Part 121 operating certificate and gear the service toward corporations, aircraft brokers, sports teams, hospitality companies and schools.

In April, Continental Airlines accepted a bid from Indianapolis-based Chautauqua Airlines to fly at least 69 regional jets slated for withdrawal from its capacity purchase agreement with ExpressJet. Now flying 274 Embraer ERJ 145s and 135s, ExpressJet had to decide by September 28 whether it would return any or all of the aircraft to Continental or continue to sublease them at higher rates. It chose to keep the airplanes, but under the terms of its deal, the interest component of the underlying lease will automatically increase by 200 basis points.

ExpressJet has considered a number of options to compensate for its lost Continental Express capacity, including taking its business all the way to Europe, where it holds a 49-percent stake in JetX Aviation, a start-up enterprise involving former principals of defunct Irish regional airline JetMagic. To operate under the name ExpressJet Europe, the airline would introduce capacity purchase agreement operations to the continent. It also continues to seek new code-share opportunities with U.S. airlines, although its new lease terms do not allow it to fly any of the 69 excess jets to or from any of Continental’s hubs.