Continental Airlines has selected Chautauqua Airlines to operate up to 69 regional jets that will be withdrawn from its capacity purchase agreement with ExpressJet Airlines and parent, ExpressJet Holdings, should ExpressJet choose to return those aircraft to Continental. By an agreement with Continental, ExpressJet is required to notify Continental by Sept. 28, whether it will return any or all of the aircraft to Continental, or continue to sublease the aircraft at increased lease rates from Continental and fly them outside of Continental's hubs under a brand other than Continental Express, as permitted by the capacity purchase agreement. Chautauqua, a subsidiary of Republic Airways Holdings, would operate any aircraft returned by ExpressJet as a second Continental Express carrier at each of Continental's domestic hubs in Newark Liberty, Houston and Cleveland. Continental Airlines said it would continue to schedule and market all its regional jet service as it does today.
