As a "JetSetter", I received this email from ExpressJet Airlines last Tuesday.
As you may have heard, ExpressJet will be flying as a commercial airline on our ExpressJet branded routes only through September 1, 2008.
Due to fuel prices and other market conditions, it's a difficult time for commercial airlines and we've had to make some tough decisions. Naturally, that will affect your JetSet membership and the points you've earned.
This is your official notice that the JetSet Program will be discontinued on September 2, 2008. You will continue to earn through September 1, 2008 for all qualified travel on Expressjet. All Travel Awards and JetSet Points that you've earned will be valid for use through September 1, 2008, but will hold no cash value and will not be valid for travel on ExpressJet or other airlines as of September 2, 2008.
If you have any questions about your JetSet Membership, we'll be here to help. You can reach us at the JetSet Desk...or email us... We've also posted FAQs about the program termination on expressjet.com.
We've really enjoyed serving our customers and getting to know many of you as JetSet members and friends. On behalf of everyone here at the airline, thanks for flying ExpressJet. We will miss serving you.
President and CEO
Too bad ... I actually liked them and even blogged about ExpressJet in February.
I did a little digging and one travel blogger wrote that aside from the high fuel prices, ExpressJet were hit by 2 other issues that resulted to low cash.
- Its credit card company imposed a 100% holdover on sales, so ExpressJet only receives funds after the passenger flies (not when the passenger buys a ticket).
- It parked its cash to some illiquid investment that ExpressJet cannot get its money right away, now that they needed it.
Wow, if these were true, then I think those are 2 bad business decisions. On the credit card company, it would have been wise to review/negotiate upfront the conditions of holdover when they signed up with them. On the illiquid investment, I am guessing that the company did not diversify and thus tying down its assets to one investment, and an illiquid asset at that as well. Asset allocation or diversification is basic - I wonder who adviced them on that?
Meanwhile, it was interesting to note that based on the reactions on this news, there are people just like me who appreciated ExpressJet. Well, I hope some other companies rise up to fill that niche that ExpressJet was serving.