| **UNITED STATES**                      |
|----------------------------------------|
| **SECURITIES AND EXCHANGE COMMISSION** |
| WASHINGTON, D.C. 20549                 |

**Form 10-Q**

| **[X]**                  |                                                           | **Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**  |
|--------------------------|-----------------------------------------------------------|----------------------------------------------------------------------------------------------|
|                          | **For the quarterly period ended September 30, 2003**     |
|                          | **or**                                                    |
| **[   ]** |                                                           | **Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934** |
|                          | **For the transition period from__________ to__________** |

Commission File Number 1-31300**EXPRESSJET HOLDINGS, INC.***(Exact name of registrant as specified in its charter)*

| **Delaware** (*State or other jurisdiction of incorporation or organization)*               | **             ** | **76-0517977***(I.R.S. Employer Identification No.)* |
|---------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------|------------------------------------------------------|
|                                                                                   |                                                                                    |                                                      |
| **1600 Smith Street, Dept. HQSCE Houston, Texas***(Address of principal executive offices)* |                                                                                    | ******77002***(Zip Code)*                            |

**713-324-2639***(Registrant's telephone number, including area code)*

**NOT APPLICABLE***(**Former name, former address and former fiscal year, if changed since last report)*

            Indicate by check mark whether registrant (1) has filed allreports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or forsuch shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days.

|      Yes | **   X    ** | No    |
|-----------------------------------|-------------------------------------------------|----------------------|

            Indicate by check mark whether the registrant isan accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

|      Yes |        | No   **X** |
|-----------------------------------|--------------------------------------|---------------------------|

As of October 14, 2003, 54,164,875 shares of common stock were outstanding.

----

**TABLE OF CONTENTS**

****

| ** **              | ** ** |                                                                                                            |              |          |
|-------------------------|------------|------------------------------------------------------------------------------------------------------------|--------------|----------|
| **PART I.**             |       | **FINANCIAL INFORMATION**                                                                                  |              | **PAGE** |
| Item 1.                 |       | Financial Statements:                                                                                      |              |          |
|                    |       | Consolidated Statements of Operations (Unaudited): Three and nine months ended September 30, 2003 and 2002 |              | 3        |
|                    |       | Consolidated Balance Sheets: September 30, 2003 (Unaudited) and December 31, 2002                          |              | 5        |
|                         |            | Consolidated Condensed Statements of Cash Flows (Unaudited): Nine months ended September 30, 2003 and 2002 |              | 7        |
|                         |            | Notes to Consolidated Financial Statements (Unaudited)                                                     |              | 8        |
| Item 2.            |       | Management’s Discussion and Analysis of Financial Condition and Results of Operations                |    | 16       |
|   Item 3.          |       | Quantitative and Qualitative Disclosure About Market Risk                                                  |              | 29       |
| **** Item 4.            |            | Controls and Procedures                                                                                    |              | 30       |
| **PART II. ** |       | **OTHER INFORMATION**                                                                                      |              |          |
| Item 1.                 |            | Legal Proceedings                                                                                          |              | 31       |
| Item 2.                 |            | Changes in Securities and Use of Proceeds                                                                  |              | 31       |
| Item 3.                 |            | Defaults Upon Senior Securities                                                                            |              | 31       |
| Item 4.                 |            | Submission of Matters to a Vote of Security Holders                                                        |              | 31       |
| Item 5.                 |            | Other Information                                                                                          |              | 31       |
| Item 6.                 |            | Exhibits and Reports on Form 8-K                                                                           |              | 32       |
|                         |            | Signatures                                                                                                 |              | 33       |
|                    |            | Index to Exhibits                                                                                          |              | 34       |

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Table of Contents

****

**PART I - FINANCIAL INFORMATION**

**Item 1.  Financial Statements.**

**EXPRESSJET HOLDINGS, INC., AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)(In thousands, except per share data)**

|                                                                                                                                                     |  |   | **Three Months Ended September 30,** |   |  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--|---|--------------------------------------|---|--|
|                                                                                                                                                     |  |   |                                      |   |
|                                                                                                                                                     |  |   |                                      |   |  |
|                                                                                                                                                     |  |   | **2003**                             |   |  |  | **2002** |  |  |
|                                                                                                                                                     |  |   |                                      |   |  |
| Operating Revenue................................................                                                                                   |  | $ | 343,629                              |   |  | $ | 270,149 |  |  |
|                                                                                                                                                |  |   |                                      |   |  |  |  |  |  |
| Operating Expenses:                                                                                                                                 |  |   |                                      |   |  |  |  |  |  |
|      Wages, salaries and related costs.....................                                                                |  |   | 73,703                               |   |  |  | 58,075 |  |  |
|      Aircraft rentals.................................................                                                     |  |   | 64,205                               |   |  |  | 50,688 |  |  |
|      Aircraft fuel......................................................                                                   |  |   | 38,288                               |   |  |  | 26,046 |  |  |
|      Maintenance, materials and repairs....................                                                                |  |   | 33,508                               |   |  |  | 24,070 |  |  |
|      Other rentals and landing fees...........................                                                             |  |   | 27,267                               |   |  |  | 21,207 |  |  |
|      Ground handling...............................................                                                        |  |   | 23,614                               |   |  |  | 18,429 |  |  |
|      Outside services..............................................                                                        |  |   | 5,829                                |   |  |  | 4,934 |  |  |
|      Depreciation and amortization...........................                                                              |  |   | 5,265                                |   |  |  | 6,088 |  |  |
|      Aircraft related and other insurance....................                                                              |  |   | 1,987                                |   |  |  | 4,678 |  |  |
|      Other operating expenses.................................                                                             |  |   | 22,984                               |   |  |  | 18,549 |  |  |
|                                                                                                                                                |  |   |                                      |   |  |  |  |  |  |
|                                                                                                                                                |  |   | 296,650                              |   |  |  | 232,764 |  |  |
|                                                                                                                                                |  |   |                                      |   |  |  |  |  |  |
| Operating Income..................................................                                                                                  |  |   | 46,979                               |   |  |  | 37,385 |  |  |
|                                                                                                                                                |  |   |                                      |   |  |  |  |  |  |
| Nonoperating Income (Expense):                                                                                                                      |  |   |                                      |   |  |  |  |  |  |
|      Interest expense, net........................................                                                         |  |   | (2,578                               | ) |  |  | (3,153 | ) |  |
|      Interest income................................................                                                       |  |   | 455                                  |   |  |  | 845 |  |  |
|      Capitalized interest...........................................                                                       |  |   | 298                                  |   |  |  | 234 |  |  |
|      Other, net........................................................                                                    |  |   | (15                                  | ) |  |  | 62 |  |  |
|                                                                                                                                                |  |   |                                      |   |  |  |  |  |  |
|                                                                                                                                                     |  |   | (1,840                               | ) |  |  | (2,012 | ) |  |
|                                                                                                                                                     |  |   |                                      |   |  |  |  |  |  |
| Income before Income Taxes and Dividends.............                                                                                               |  |   | 45,139                               |   |  |  | 35,373 |  |  |
| Income Tax Expense.............................................                                                                                     |  |   | 17,328                               |   |  |  | 13,724 |  |  |
|                                                                                                                                                |  |   |                                      |   |  |  |  |  |  |
| Income before Dividends........................................                                                                                     |  |   | 27,811                               |   |  |  | 21,649 |  |  |
|                                                                                                                                                |  |   |                                      |   |  |  |  |  |  |
| Dividends on Mandatorily Redeemable Preferred Stock      of Subsidiary.................................................... |  |   | -                                    |   |  |  | (173 | ) |  |
|                                                                                                                                                |  |   |                                      |   |  |  |  |  |  |
| Net Income...........................................................                                                                               |  | $ | 27,811                               |   |  | $ | 21,476 |  |  |
|                                                                                                                                                |  |   |                                      |   |  |  |  |  |  |
| Basic Earnings per Common Share........................                                                                                             |  | $ | 0.48                                 |   |  | $ | 0.34 |  |  |
|                                                                                                                                                |  |   |                                      |   |  |  |  |  |  |
| Diluted Earnings per Common Share.......................                                                                                            |  | $ | 0.48                                 |   |  | $ | 0.34 |  |  |
|                                                                                                                                                |  |   |                                      |   |  |  |  |  |  |
| Shares Used in Computing Basic Earnings per      Common Share................................................              |  |   | 58,069                               |   |  |  | 64,000 |  |  |
| Shares Used in Computing Diluted Earnings per      Common Share................................................            |  |   | 58,132                               |   |  |  | 64,000 |  |  |

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 

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**EXPRESSJET HOLDINGS, INC., AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)(In thousands, except per share data)**

|                                                                                                                                                     |  |   | **Nine Months Ended September 30,** |   |  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--|---|-------------------------------------|---|--|
|                                                                                                                                                     |  |   |                                     |   |
|                                                                                                                                                     |  |   |                                     |   |  |
|                                                                                                                                                     |  |   | **2003**                            |   |  |  | **2002** |  |  |
|                                                                                                                                                     |  |   |                                     |   |  |
| Operating Revenue................................................                                                                                   |  | $ | 970,494                             |   |  | $ | 805,094 |  |  |
|                                                                                                                                                |  |   |                                     |   |  |  |  |  |  |
| Operating Expenses:                                                                                                                                 |  |   |                                     |   |  |  |  |  |  |
|      Wages, salaries and related costs.....................                                                                |  |   | 209,000                             |   |  |  | 176,142 |  |  |
|      Aircraft rentals.................................................                                                     |  |   | 182,911                             |   |  |  | 145,662 |  |  |
|      Aircraft fuel......................................................                                                   |  |   | 103,841                             |   |  |  | 72,986 |  |  |
|      Maintenance, materials and repairs....................                                                                |  |   | 96,657                              |   |  |  | 72,584 |  |  |
|      Other rentals and landing fees...........................                                                             |  |   | 74,983                              |   |  |  | 64,681 |  |  |
|      Ground handling...............................................                                                        |  |   | 65,824                              |   |  |  | 54,851 |  |  |
|      Outside services..............................................                                                        |  |   | 21,939                              |   |  |  | 16,561 |  |  |
|      Depreciation and amortization...........................                                                              |  |   | 14,911                              |   |  |  | 21,900 |  |  |
|      Aircraft related and other insurance....................                                                              |  |   | 4,076                               |   |  |  | 13,850 |  |  |
|      Security fee reimbursement...............................                                                             |  |   | (3,034                              | ) |  |  | - |  |  |
|      Other operating expenses.................................                                                             |  |   | 63,974                              |   |  |  | 56,551 |  |  |
|                                                                                                                                                |  |   |                                     |   |  |  |  |  |  |
|                                                                                                                                                |  |   | 835,082                             |   |  |  | 695,768 |  |  |
|                                                                                                                                                |  |   |                                     |   |  |  |  |  |  |
| Operating Income..................................................                                                                                  |  |   | 135,412                             |   |  |  | 109,326 |  |  |
|                                                                                                                                                |  |   |                                     |   |  |  |  |  |  |
| Nonoperating Income (Expense):                                                                                                                      |  |   |                                     |   |  |  |  |  |  |
|      Interest expense, net........................................                                                         |  |   | (6,770                              | ) |  |  | (11,294 | ) |  |
|      Interest income................................................                                                       |  |   | 1,493                               |   |  |  | 2,937 |  |  |
|      Capitalized interest...........................................                                                       |  |   | 846                                 |   |  |  | 833 |  |  |
|      Other, net........................................................                                                    |  |   | (46                                 | ) |  |  | 108 |  |  |
|                                                                                                                                                |  |   |                                     |   |  |  |  |  |  |
|                                                                                                                                                     |  |   | (4,477)                             |   |  |  | (7,416 | ) |  |
|                                                                                                                                                |  |   |                                     |   |  |  |  |  |  |
| Income before Income Taxes and Dividends.............                                                                                               |  |   | 130,935                             |   |  |  | 101,910 |  |  |
| Income Tax Expense.............................................                                                                                     |  |   | 50,303                              |   |  |  | 39,631 |  |  |
|                                                                                                                                                |  |   |                                     |   |  |  |  |  |  |
| Income before Dividends........................................                                                                                     |  |   | 80,632                              |   |  |  | 62,279 |  |  |
|                                                                                                                                                |  |   |                                     |   |  |  |  |  |  |
| Dividends on Mandatorily Redeemable Preferred Stock      of Subsidiary.................................................... |  |   | (352                                | ) |  |  | (319 | ) |  |
|                                                                                                                                                |  |   |                                     |   |  |  |  |  |  |
| Net Income...........................................................                                                                               |  | $ | 80,280                              |   |  | $ | 61,960 |  |  |
|                                                                                                                                                |  |   |                                     |   |  |  |  |  |  |
| Basic Earnings per Common Share........................                                                                                             |  | $ | 1.29                                |   |  | $ | 1.03 |  |  |
|                                                                                                                                                |  |   |                                     |   |  |  |  |  |  |
| Diluted Earnings per Common Share.......................                                                                                            |  | $ | 1.29                                |   |  | $ | 1.03 |  |  |
|                                                                                                                                                |  |   |                                     |   |  |  |  |  |  |
| Shares Used in Computing Basic Earnings per      Common Share................................................              |  |   | 62,001                              |   |  |  | 60,081 |  |  |
| Shares Used in Computing Diluted Earnings per      Common Share................................................            |  |   | 62,005                              |   |  |  | 60,081 |  |  |

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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**EXPRESSJET HOLDINGS, INC.,**** AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands)**

| **ASSETS**                                                                                                 |  |   | **September 30,** |   |   | **December 31,** |   |
|------------------------------------------------------------------------------------------------------------|--|---|-------------------|---|---|------------------|---|
|                                                                                                            |  |   | **2003**          |   |   | **2002**         |   |
|                                                                                                            |  |   |                   |   |
|                                                                                                            |  |   | (Unaudited)       |   |   |                  |   |
| Current Assets:                                                                                            |  |   |                   |   |   |                  |   |
|      Cash and cash equivalents.........................                           |  | $ | 168,283           |   | $ | 120,930          |   |
|      Restricted cash.........................................                     |  |   | 3,200             |   |   | -                |   |
|      Accounts receivable, net............................                         |  |   | 2,911             |   |   | 1,526            |   |
|      Amounts due from Continental Airlines, Inc.                                  |  |   | 2,746             |   |   | 17,419           |   |
|      Spare parts and supplies, net.....................                           |  |   | 25,750            |   |   | 26,842           |   |
|      Prepayments and other..............................                          |  |   | 13,129            |   |   | 10,775           |   |
|      Deferred income taxes...............................                         |  |   | -                 |   |   | 2,299            |   |
|                                                                                                            |  |   |                   |   |   |                  |   |
|         Total Current Assets...............................        |  |   | 216,019           |   |   | 179,791          |   |
|                                                                                                            |  |   |                   |   |   |                  |   |
| Property and Equipment:                                                                                    |  |   |                   |   |   |                  |   |
|      Owned property and equipment:                                                |  |   |                   |   |   |                  |   |
|         Flight equipment.....................................      |  |   | 189,545           |   |   | 188,366          |   |
|         Other..................................................... |  |   | 99,488            |   |   | 89,859           |   |
|                                                                                                       |  |   |                   |   |   |                  |   |
|                                                                                                            |  |   | 289,033           |   |   | 278,225          |   |
|         Less:  Accumulated depreciation.............     |  |   | (57,110           | ) |   | (68,130          | ) |
|                                                                                                            |  |   |                   |   |   |                  |   |
|                                                                                                            |  |   | 231,923           |   |   | 210,095          |   |
|                                                                                                            |  |   |                   |   |   |                  |   |
|      Capital Leases:                                                              |  |   |                   |   |   |                  |   |
|         Flight equipment.....................................      |  |   | 10,643            |   |   | 10,643           |   |
|         Other..................................................... |  |   | 4,342             |   |   | 4,358            |   |
|                                                                                                            |  |   |                   |   |   |                  |   |
|                                                                                                            |  |   | 14,985            |   |   | 15,001           |   |
|         Less:  Accumulated amortization.............     |  |   | (3,303            | ) |   | (2,518           | ) |
|                                                                                                            |  |   |                   |   |   |                  |   |
|                                                                                                            |  |   | 11,682            |   |   | 12,483           |   |
|                                                                                                            |  |   |                   |   |   |                  |   |
|         Total Property and Equipment..................             |  |   | 243,605           |   |   | 222,578          |   |
|                                                                                                            |  |   |                   |   |   |                  |   |
| Deferred Income Taxes...................................                                                   |  |   | 11,077            |   |   | 8,835            |   |
| Reorganization Value In Excess of Amounts                                                                  |  |   |                   |   |   |                  |   |
|      Allocable to Identifiable Assets, net.............                           |  |   | 12,789            |   |   | 12,789           |   |
| Airport Operating Rights, net...........................                                                   |  |   | 4,505             |   |   | 4,693            |   |
| Note Receivable.............................................                                               |  |   | 5,000             |   |   | 5,000            |   |
| Other Assets, net...........................................                                               |  |   | 4,567             |   |   | 462              |   |
|                                                                                                       |  |   |                   |   |   |                  |   |
|         Total Assets..........................................     |  | $ | 497,562           |   | $ | 434,148          |   |
|                                                                                                       |  |   |                   |   |   |                  |   |

(continued on next page)

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Table of Contents

****

**EXPRESSJET HOLDINGS, INC.,**** AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands, except for share data)**

| **LIABILITIES AND**                                                                                                                                                                                                                                                                   |  |   | **September 30,** |   |        |   | **December 31,** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|---|-------------------|---|--------|---|------------------|---|
| **STOCKHOLDERS' EQUITY**                                                                                                                                                                                                                                                              |  |   | **2003**          |   |        |   | **2002**         |   |
|                                                                                                                                                                                                                                                                                       |  |   |                   |   |        |   |                  |   |
|                                                                                                                                                                                                                                                                                       |  |   | (Unaudited)       |   |        |   |                  |   |
| Current Liabilities:                                                                                                                                                                                                                                                                  |  |   |                   |   |   |   |                  |   |
|      Current maturities of long-term debt and          Capital leases....................................................                                                                                       |  | $ | 2,864             |   |        | $ | 2,174            |   |
|      Current maturities of note payable to         Continental Airlines, Inc........................................                                                                                                 |  |   | 66,722            |   |        |   | 73,551           |   |
|      Accounts payable...................................................                                                                                                                                                                                     |  |   | 3,752             |   |        |   | 8,153            |   |
|      Accrued payroll and related costs............................                                                                                                                                                                                           |  |   | 36,069            |   |        |   | 18,260           |   |
|      Accrued other liabilities...........................................                                                                                                                                                                                    |  |   | 52,810            |   |        |   | 45,648           |   |
|      Deferred income taxes............................................                                                                                                                                                                                       |  |   | 48,620            |   |        |   | -                |   |
|                                                                                                                                                                                                                                                                                       |  |   |                   |   |        |   |                  |   |
|         Total Current Liabilities.........................................                                                                                                                                                                    |  |   | 210,837           |   |        |   | 147,786          |   |
|                                                                                                                                                                                                                                                                                       |  |   |                   |   |        |   |                  |   |
|                                                                                                                                                                                                                                                                                       |  |   |                   |   |        |   |                  |   |
| Long-term Debt and Capital Leases...............................                                                                                                                                                                                                                      |  |   | 24,385            |   |        |   | 9,394            |   |
|                                                                                                                                                                                                                                                                                       |  |   |                   |   |        |   |                  |   |
| Note Payable to Continental Airlines, Inc.......................                                                                                                                                                                                                                      |  |   | 153,064           |   |        |   | 251,961          |   |
|                                                                                                                                                                                                                                                                                       |  |   |                   |   |        |   |                  |   |
| 4.25% Senior Convertible Notes due 2023......................                                                                                                                                                                                                                         |  |   | 137,200           |   |        |   | -                |   |
|                                                                                                                                                                                                                                                                                       |  |   |                   |   |        |   |                  |   |
| Other Long-term Liabilities............................................                                                                                                                                                                                                               |  |   | 10,295            |   |        |   | 9,705            |   |
|                                                                                                                                                                                                                                                                                       |  |   |                   |   |        |   |                  |   |
| Stockholders’ Equity (Deficit):                                                                                                                                                                                                                                                 |  |   |                   |   |        |   |                  |   |
|      Special Voting Preferred stock - $.01 par, one         share authorized, issued, and outstanding.............                                                                                                   |  |   | -                 |   |        |   | -                |   |
|      Preferred stock - $.01 par, one share         authorized, issued, and outstanding......................                                                                                                         |  |   | -                 |   |        |   | -                |   |
|      Common stock - $.01 par, 200,000,000 shares         authorized, 54,164,875 and 64,000,000 shares         issued and outstanding........................................ |  |   | 542               |   |        |   | 640              |   |
|      Additional paid-in capital..........................................                                                                                                                                                                                    |  |   | 159,807           |   |        |   | 159,743          |   |
|      Accumulated deficit................................................                                                                                                                                                                                     |  |   | (198,568          | ) |        |   | (145,081         | ) |
|                                                                                                                                                                                                                                                                                       |  |   |                   |   |        |   |                  |   |
|         Total Stockholders’ Equity (Deficit)........................                                                                                                                                                                    |  |   | (38,219           | ) |        |   | 15,302           |   |
|                                                                                                                                                                                                                                                                                       |  |   |                   |   |        |   |                  |   |
|         Total Liabilities and Stockholders’ Equity

           (Deficit)............................................................                                             |  | $ | 497,562           |   |        | $ | 434,148          |   |
|                                                                                                                                                                                                                                                                                  |  |   |                   |   |        |   |                  |   |

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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**EXPRESSJET HOLDINGS, INC., ****AND SUBSIDIARIESCONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)(In thousands)**

|                                                                                                                                                                                                           |  |   | **Nine Months Ended September 30,** |   |                        |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|---|-------------------------------------|---|------------------------|
|                                                                                                                                                                                                           |  |   | ****                                |   |                        |
|                                                                                                                                                                                                           |  |   | **2003**                            |   | **   ** |  | **2002** |  |  |
|                                                                                                                                                                                                           |  |   | ****                                |   |                        |
|                                                                                                                                                                                                           |  |   |                                     |   |                        |  |  |  |  |
| Net Cash Flows from Operating Activities.......................                                                                                                                                           |  | $ | 170,756                             |   |                        | $ | 129,890 |  |  |
|                                                                                                                                                                                                      |  |   |                                     |   |                        |  |  |  |  |
| Cash Flows from Investing Activities:                                                                                                                                                                     |  |   |                                     |   |                        |  |  |  |  |
|      Capital expenditures................................................                                                                                                        |  |   | (38,168                             | ) |                        |  | (38,513 | ) |  |
|      Proceeds from the transfer of flight equipment to         Continental Airlines, Inc. ......................................         |  |   | 1,621                               |   |                        |  | 15,341 |  |  |
|      Proceeds from disposition of equipment.....................                                                                                                                 |  |   | 145                                 |   |                        |  | 1,424 |  |  |
|                                                                                                                                                                                                           |  |   |                                     |   |                        |  |  |  |  |
|         Net cash used in investing activities.......................                                                                                              |  |   | (36,402                             | ) |                        |  | (21,748 | ) |  |
|                                                                                                                                                                                                           |  |   |                                     |   |                        |  |  |  |  |
| Cash Flows from Financing Activities:                                                                                                                                                                     |  |   |                                     |   |                        |  |  |  |  |
|      Gross proceeds from convertible debt offering.............                                                                                                                  |  |   | 137,200                             |   |                        |  | - |  |  |
|      Repurchase of common stock..................................                                                                                                                |  |   | (133,770                            | ) |                        |  | - |  |  |
|      Proceeds from long-term debt...................................                                                                                                             |  |   | 17,297                              |   |                        |  | - |  |  |
|      Gross proceeds from issuance of common stock.......                                                                                                                         |  |   | -                                   |   |                        |  | 160,000 |  |  |
|      Payments related to IPO underwriting discounts         and other expenses..............................................             |  |   | (34                                 | ) |                        |  | (14,612 | ) |  |
|      Payments on note payable to Continental Airlines,         Inc...................................................................... |  |   | (105,726                            | ) |                        |  | (176,800 | ) |  |
|      Payments on capital lease obligations.......................                                                                                                                |  |   | (1,616                              | ) |                        |  | (1,506 | ) |  |
|      Dividends paid on mandatorily redeemable preferred         stock................................................................... |  |   | (352                                | ) |                        |  | (319 | ) |  |
|                                                                                                                                                                                                      |  |   |                                     |   |                        |  |  |  |  |
|         Net cash used in financing activities.......................                                                                                              |  |   | (87,001                             | ) |                        |  | (33,237 | ) |  |
|                                                                                                                                                                                                      |  |   |                                     |   |                        |  |  |  |  |
| Net Increase in Cash and Cash Equivalents....................                                                                                                                                             |  |   | 47,353                              |   |                        |  | 74,905 |  |  |
|                                                                                                                                                                                                           |  |   |                                     |   |                        |  |  |  |  |
| Cash and Cash Equivalents – Beginning of Period...........                                                                                                                                          |  |   | 120,930                             |   |                        |  | 71,877 |  |  |
|                                                                                                                                                                                                           |  |   |                                     |   |                        |  |  |  |  |
| Cash and Cash Equivalents – End of Period ...................                                                                                                                                       |  | $ | 168,283                             |   |                        | $ | 146,782 |  |  |
|                                                                                                                                                                                                      |  |   |                                     |   |                        |  |  |  |  |
| Supplemental Cash Flow Information:                                                                                                                                                                       |  |   |                                     |   |                        |  |  |  |  |
|      Interest paid............................................................                                                                                                   |  | $ | 5,717                               |   |                        | $ | 11,294 |  |  |
|      Income taxes paid...................................................                                                                                                        |  | $ | 144                                 |   |                        | $ | 8,107 |  |  |
|                                                                                                                                                                                                           |  |   |                                     |   |                        |  |  |  |  |
|                                                                                                                                                                                                           |

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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**EXPRESSJET HOLDINGS, INC.,**** AND SUBSIDIARIES****NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

            We are a regional U.S. air carrier engaged in the business oftransporting passengers, cargo and mail.  Our principal asset is all of the issued and outstanding shares of capital stock ofXJT Holdings, Inc., the sole owner of the issued and outstanding shares of common stock of ExpressJet Airlines, Inc., whichoperates as Continental Express (together, "ExpressJet", "we", "us" and "our").  We are economically dependent uponContinental Airlines, Inc. (“Continental”) for our operations and cash flows as all of our flying is currentlyperformed on behalf of Continental pursuant to a capacity purchase agreement, and substantially all of our revenue is receivedunder such agreement.  In addition, this capacity purchase agreement covers all of our existing fleet and our regional jetscurrently subject to firm aircraft orders.  As of September 30, 2003, Continental owned 30.9% of our outstanding common stockand one share of our series of preferred stock designated special voting preferred stock. Pursuant to its rights, Continental haselected three directors to our board of directors (“Board”), and thus can indirectly influence many of our corporatedecisions.

            We have prepared the unaudited quarterly consolidatedfinancial statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission.  Somerequired information and footnote disclosures normally included in financial statements prepared in accordance with accountingprinciples generally accepted in the United States have been condensed or omitted pursuant to these rules and regulations.  Inour opinion, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly ourfinancial position, the results of our operations and our cash flows for the periods indicated.  These adjustments are of anormal, recurring nature.  All intercompany transactions have been eliminated in consolidation.  The accompanyingconsolidated financial statements should be read in conjunction with the consolidated financial statements and the notes theretocontained in our Annual Report on Form 10-K for the year ended December 31, 2002 (the “2002 10-K”).  The resultsof operations for the periods presented are not necessarily indicative of the results to be expected for the full year endingDecember 31, 2003.

            Certain reclassifications have been made in the priorperiod’s financial statements to conform to the current year presentation.

**Note 1 *–* Earnings Per Share**

            The following table sets forth the computation of basic anddiluted earnings per share for the three and nine months ended September 30, 2003 and 2002:

|                                                                                                                                           |              |   | **Three Months Ended September 30,** |        |   | **Nine Months Ended September 30,** |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------------|---|--------------------------------------|--------|---|-------------------------------------|
|                                                                                                                                           |              |   |                                      |        |
|                                                                                                                                           |              |   | ****                                 |        |   | ****                                |
| (In thousands)                                                                                                                            |              |   | **2003**                             |        |   | **2002**                            |  |  | **2003** |  |  | **2002** |
|                                                                                                                                           |              |   | ****                                 |        |   | ****                                |  |  | **** |  |  | **** |
| Numerator for basic earnings per share – net      income.................................................. |    | $ | 27,811                               |   | $ | 21,476                              |    | $ | 80,280 |   | $ | 61,960 |
|                                                                                                                                           |              |   |                                      |        |   |                                     |  |  |  |  |  |  |
| Denominator for basic earnings per share -      weighted average shares.........................                 |              |   | 58,069                               |        |   | 64,000                              |  |  | 62,001 |  |  | 60,081 |
| Employee stock options...............................                                                                                     |              |   | 63                                   |        |   | -                                   |  |  | 4 |  |  | - |
|                                                                                                                                           |              |   |                                      |        |   |                                     |  |  |  |  |  |  |
| Denominator for diluted earnings per share -      adjusted and assumed conversions..........                     |              |   | 58,132                               |        |   | 64,000                              |  |  | 62,005 |  |  | 60,081 |
|                                                                                                                                           |              |   |                                      |        |   |                                     |  |  |  |  |  |  |

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            Options to purchase 971,000 and 975,500 shares of our commonstock were not included in the computation of diluted earnings per share for the three and nine months ended September 30, 2003 and984,500 shares for the three and nine months ended September 30, 2002.  These options' exercise prices were greater than theaverage market price of the common shares.  Furthermore, we also excluded approximately 7.5 million shares of potential commonstock equivalents related to our senior convertible notes (see Note 8 – 4.25% Senior Convertible Notes due 2023) from ourcomputation of diluted earnings per share for the three and nine months ended September 30, 2003 as these shares are not currentlyconvertible in accordance with the terms of the notes.

**Note 2 – Income Taxes**

            At December 31, 2002, we had federal net operating losscarryforwards of approximately $105.2 million, which expire between 2004 and 2020.

            In conjunction with our initial public offering(“IPO”) completed on April 23, 2002, the tax basis of our tangible and intangible assets was increased to fairvalue.  The increased tax basis should result in additional tax deductions being available to us over a period of 15 years. Inaccordance with our tax agreement with Continental, to the extent we generate taxable income sufficient to realize the additionaltax deductions, we will be required to pay Continental a percentage of the amount of tax savings actually realized, excluding theeffect of any loss carrybacks. We will be required to pay Continental 100% of the first third of the anticipated tax benefit, 90%of the second third, and 80% of the last third. However, if the tax benefits are not realized by the end of 2018, we will beobligated to pay Continental 100% of any benefit realized after that date. Since these future payments are solely dependent on ourability to generate sufficient taxable income to realize these deferred tax assets, they are recorded as an obligation toContinental within the deferred tax accounts, and the portion we may retain in the future is offset by a valuation allowance. This valuation allowance and the long-term portion of the obligation to Continental offsets the step-up in basis of assets in ourlong-term deferred tax asset account. 

            Our tax agreement with Continental provides that Continentalwill reimburse us for any net increase in our cash tax payments resulting from any decreased availability of net operating losscarryovers related to the basis increase at the time our payment occurs. The resulting receivable and/or payable with Continentalrelated to the impact on net operating losses resulting from the basis increase is recorded within the deferred tax accounts sinceits performance is dependent on our ability to generate taxable income.

            No valuation allowance was established on our net operatingloss carryforwards, or on our receivable from Continental for reimbursing carryforward losses utilized resulting from the basisincrease, because we believe our taxable income will be sufficient to utilize substantially all of these assets within the nextseveral years.

            We believe that our IPO created a change in ownershiplimitation on the utilization of our carryforward tax attributes, primarily net operating losses. This limitation, underSection 382 of the Internal Revenue Code, will limit our utilization of these attributes to offset up to approximately$43.3 million of post-change taxable income per year. We do not expect this limitation to have any impact on our financialcondition.

            Our tax agreement with Continental increases our exposure toContinental’s financial health.  If it is determined that any of the tax benefits related to the basis increase shouldnot have been available at the time of utilization and, as a result, we are required to pay additional taxes and/or penalties, thenwe could be adversely affected if Continental were insolvent, bankrupt, or otherwise unable to pay us under its indemnification forthese amounts.

****

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****

**Note 3 *–* Stock Plans and Awards**

           We account for our stock-based compensation arrangements using theintrinsic value method in accordance with the provisions of Accounting Principles Board Opinion No. 25 - "Accounting for StockIssued to Employees" ("APB 25"), and related interpretations.  Under APB 25, if the exercise price of our employee stockoptions equals the market price of the underlying stock on the date of grant, no compensation expense is recognized.  Sinceour stock options have all been granted with exercise prices at market price on the date of grant, no compensation expense has beenrecognized under APB 25. 

           The following tables illustrate the effect on net income andearnings per share assuming the compensation costs for our stock option and purchase plans had been determined using the fair valuemethod at the grant dates amortized on a pro rata basis over the vesting period as required under Statement of Financial AccountingStandard No. 123 – “Accounting for Stock-Based Compensation” for the three and nine months ended September 30,2003 and 2002 (in thousands, except for per share data):

****

|                                                                                                        |   | **Three Months Ended September 30,** |   |
|--------------------------------------------------------------------------------------------------------|---|--------------------------------------|---|
|                                                                                                        |   |                                      |
|                                                                                                        |   |                                      |   |
|                                                                                                        |   | **2003**                             |   |  | **2002** |  |
|                                                                                                        |   |                                      |   |  |  |  |
| Net income as reported................................................                                 | $ | 27,811                               |   | $ | 21,476 |  |
| Deduct:  Total stock-based employee compensation                                             |   |                                      |   |  |  |  |
|      expense determined under fair value based method                         |   |                                      |   |  |  |  |
|      for all awards, net ...................................................  |   | (616                                 | ) |  | (815 | ) |
|                                                                                                        |   |                                      |   |  |  |  |
| Pro forma....................................................................                          | $ | 27,195                               |   | $ | 20,661 |  |
|                                                                                                        |   |                                      |   |  |  |  |
|                                                                                                        |   |                                      |   |  |  |  |
| Basic earnings per share                                                                               |   |                                      |   |  |  |  |
|      As reported ...........................................................  | $ | 0.48                                 |   | $ | 0.34 |  |
|      Pro forma............................................................... | $ | 0.47                                 |   | $ | 0.32 |  |
|                                                                                                        |   |                                      |   |  |  |  |
| Diluted earnings per share                                                                             |   |                                      |   |  |  |  |
|      As reported ...........................................................  | $ | 0.48                                 |   | $ | 0.34 |  |
|      Pro forma............................................................... | $ | 0.47                                 |   | $ | 0.32 |  |

|                                                                                                        |   | **Nine Months Ended September 30,** |   |
|--------------------------------------------------------------------------------------------------------|---|-------------------------------------|---|
|                                                                                                        |   |                                     |
|                                                                                                        |   |                                     |   |
|                                                                                                        |   | **2003**                            |   |  | **2002** |  |
|                                                                                                        |   |                                     |   |  |  |  |
| Net income as reported................................................                                 | $ | 80,280                              |   | $ | 61,960 |  |
| Deduct:  Total stock-based employee compensation                                             |   |                                     |   |  |  |  |
|      expense determined under fair value based method                         |   |                                     |   |  |  |  |
|      for all awards, net ...................................................  |   | (2,080                              | ) |  | (1,712 | ) |
|                                                                                                        |   |                                     |   |  |  |  |
| Pro forma....................................................................                          | $ | 78,200                              |   | $ | 60,248 |  |
|                                                                                                        |   |                                     |   |  |  |  |
|                                                                                                        |   |                                     |   |  |  |  |
| Basic earnings per share                                                                               |   |                                     |   |  |  |  |
|      As reported ...........................................................  | $ | 1.29                                |   | $ | 1.03 |  |
|      Pro forma............................................................... | $ | 1.26                                |   | $ | 1.00 |  |
|                                                                                                        |   |                                     |   |  |  |  |
| Diluted earnings per share                                                                             |   |                                     |   |  |  |  |
|      As reported ...........................................................  | $ | 1.29                                |   | $ | 1.03 |  |
|      Pro forma............................................................... | $ | 1.26                                |   | $ | 1.00 |  |

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            The pro forma effect on net income per share is notrepresentative of the pro forma effects in future periods.

            On May 7, 2003, our stockholders approved the 2003 ExpressJetHoldings, Inc. Employee Stock Purchase Plan (“ESPP”), which authorized the sale of one million shares of our commonstock in accordance with the ESPP.  Under the plan, all of our employees are eligible to purchase shares of our common stockat 85% of the lower of the fair market value on the first or last day of the purchase period.  Our first purchase period beganon July 1, 2003.  Employees may sell shares obtained under the ESPP six months after the end of the plan period in which theshares were purchased. 

**Note 4 – Security Fee Reimbursement**

            On April 16, 2003, President Bush signedinto law the Emergency Wartime Supplemental Appropriation Act 2003 (“Wartime Act”), which was included as part of alarger bill to fund the war in Iraq.  Highlights of the Wartime Act affecting us are as follows:

| · |     | $2.3 billion for reimbursement of airline security fees that had been paid or collected by airlines as of date ofenactment.  This means reimbursement for fees paid from February 1, 2002 through April 16, 2003, as well as prospective relieffrom June 1 to September 30, 2003. |
|----------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · |                    | $100 million was authorized to reimburse carriers for installing fortified flight deck doors.                                                                                                                                                                                          |
| · |                    | Aviation war risk insurance was extended for one year to August 2004.                                                                                                                                                                                                                  |

            In May 2003, we received $3.0 million pursuant to thereimbursement of security fees under the Wartime Act.  However, as the reimbursement for expenses received under this reliefpackage represent fully reconciled costs under the capacity purchase agreement, we distributed 100% of the funds received toContinental.  For detailed discussion of fully reconciled costs, please see Note 2, “Capacity Purchase Agreement withContinental Airlines”, in Item 8 of the 2002 10-K.  The net impact of this reimbursement was immaterial to our resultsof operations.  In September 2003, we also received $0.6 million for reimbursement of costs related to installation of thefortified flight deck doors pursuant to the Wartime Act.  The amount received was used to reduce our property and equipmentwhere the costs were capitalized.

**Note 5 – Commitments and Contingencies**

***Purchase Commitments***

******

            As shown in the following table, our aircraft fleet consistedof 218 regional jets at September 30, 2003.  Our aircraft purchase orders and options as of September 30, 2003 are also shownbelow.

| **Type**                                          |              | **Total Aircraft** |              | **Leased** |              | **Firm Orders** |              | **Options** |              | **Seats in Standard Configuration** |
|---------------------------------------------------|--------------|--------------------|--------------|------------|--------------|-----------------|--------------|-------------|--------------|-------------------------------------|
|                                                   |              |                    |    |            |    |                 |    |             |    |                                     |
| Regional Jets:                                    |    |                    |              |            |              |                 |              |             |              |                                     |
|   ERJ-145XR.............                |              | 48                 |              | 48         |              | 56              |              | 100         |              | 50                                  |
|   ERJ-145.................              |              | 140                |              | 140        |              | -               |              | -           |              | 50                                  |
|   ERJ-135.................              |              | 30                 |              | 30         |              | -               |              | -           |              | 37                                  |
|                                                   |              |                    |              |            |              |                 |              |             |              |                                     |
|     Total.................... |              | 218                |              | 218        |              | 56              |              | 100         |              |                                     |
|                                                   |              |                    |              |            |              |                 |              |             |              |                                     |

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            We anticipate taking delivery of 36 Embraer regional jetaircraft in 2003 (30 of which were delivered during the nine months ended September 30, 2003) and the remainder of our 56 firmorders through the second quarter of 2006. 

            As of September 30, 2003, the estimated aggregate cost of ourfirm commitments for Embraer regional jets was approximately $1.1 billion.  In addition, we expect to purchase up to 11 spareengines for approximately $30.8 million related to the 56 remaining aircraft on firm order.  These spare engines aredeliverable through the second quarter of 2006.  We also have options to purchase an additional 100 Embraer regionaljets.  We will not have any obligation to take any of the aircraft under firm commitments if they are not financed by a thirdparty and leased to either Continental or us.  Furthermore, we currently do not have any financing in place for the 11 spareengines and would have no obligation to acquire the spare engines if for any reason the firm order aircraft were not delivered tous.

***General Guarantees and Indemnifications***

            We are a party to many contracts in which we agree toindemnify third parties for liabilities that arise out of or relate to the subject matter of the contract.  We cannot estimatethe potential amount of future payments under these indemnities until events arise that would trigger a liability under theindemnities.  However, we expect that we would be covered by insurance for any such liabilities, subject to deductibles.

**Note 6 – Long-term Debt and Capital Leases**

            As of September 30, 2003, long-term debt and capital leases,including current maturities, totaled $27.2 million, which consisted of $17.3 million of secured debt owed to Export DevelopmentCanada (“EDC”), mandatorily redeemable preferred stock of subsidiary of $5.0 million and capital leases of $4.9million.

            We are party to a loan agreement in which EDC advanced to us$10.7 million on May 23, 2003 and $6.6 million on September 30, 2003.  The loan is secured by certain of our flightsimulators, flight data software and other equipment related to the simulators.  We utilized all of the proceeds from theadvances to reduce the principal under our note payable to Continental.  The amount due to EDC accrues interest at the forwardsix-month London interbank offered rate (“LIBOR”) plus 1.75% per annum.  The term of each advance to us is 96months.  The financing arrangement has customary representations, warranties and covenants.  Additionally, Continental isthe guarantor of this loan, and a default under the guarantee would cause an acceleration of the loan.

**Note 7 – Note Payable to Continental Airlines, Inc.**

            As of September 30, 2003, our note payable to Continental,including current maturities, was $219.8 million.  Our note payable to Continental accrues interest based on the forwardthree-month LIBOR plus 1.25% per annum, subject to a cap of 5.4% in 2003 and 6.7% in 2004.  There is no interest rate capafter 2004.  Our quarterly payment on our note payable to Continental for principal and interest is $27.9 million, to be paidthrough the earlier of March 31, 2007 or until the principal balance and any accrued unpaid interest are paid in full.  Duringthe nine months ended September 30, 2003, we made discretionary principal and interest prepayments of $83.3 million.  We alsomade quarterly principal and interest payments, net of prepayments made in prior periods, to the extent required on March 31, June30 and September 30, 2003.  The note payable to Continental is an unsecured general obligation of our company and issubordinated in right of payment to all of our future senior indebtedness.

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**Note 8 – 4.25% Senior Convertible Notes due 2023**

            During the third quarter of 2003, we completed the privateplacement of $137.2 million senior convertible notes due 2023, which were resold by the initial purchasers to qualifiedinstitutional buyers pursuant to Rule 144A of the Securities Act of 1933. Cash interest is payable on the notes at a rate of 4.25%per year on the principal amount at maturity, payable semiannually in arrears on February 1 and August 1 of each year, beginningFebruary 1, 2004.  The aggregate amount of the principal will be due on August 1, 2023.  ExpressJet Airlines, Inc., ourindirect wholly owned subsidiary, guaranteed the notes on an unsecured senior basis. The notes and the notes guarantee are seniorunsecured obligations and rank equally with our existing and future senior unsecured indebtedness. The notes and the notesguarantee are junior to any of our secured obligations and the secured obligations of our wholly owned subsidiaries to the extentof the collateral pledged.

            The notes are convertible into shares of our common stock ata conversion rate of 54.9451 shares per $1,000 in principal amount at maturity of the notes.  This conversion rate is subjectto adjustment in certain circumstances.  Holders of the notes may convert all or a portion of their notes into shares of ourcommon stock under the following circumstances: (i) at any time during or after any fiscal quarter commencing after September 30,2003 if the closing sale price of our common stock for at least 20 trading days in a period of 30 consecutive trading days endingon the last trading day of the fiscal quarter prior to such quarter is greater than 120% of the conversion price per share ofcommon stock on such last day; (ii) subject to certain exceptions, during the five business day period after any five consecutivetrading day period in which the trading price per $1,000 principal amount of the notes for each of the five trading days was lessthan 98% of the product of the closing sales price of our common stock and the number of shares issuable upon conversion of $1,000principal amount of the notes; (iii) if the notes have been called for redemption; or (iv) upon the occurrence of specifiedcorporate transactions.

            We can redeem the notes, in whole or in part, beginning onAugust 4, 2008, at a redemption price equal to 100% of the principal amount, plus accrued and unpaid cash interest, if any. Theholders of the notes may require us to repurchase the notes on August 1, 2008, August 1, 2013 and August 1, 2018 (“RedemptionDates”) at a repurchase price equal to 100% of their principal amount, plus accrued and unpaid interest, if any.  Whilewe can choose to pay the repurchase price for any such notes in cash, in shares of common stock or any combination thereof, shouldwe be required to redeem the notes at any of the Redemption Dates, we intend to satisfy that requirement in cash.** ** Wefiled a shelf registration statement with the Securities and Exchange Commission, which was declared effective on October 8, 2003,covering the resale of the notes and the underlying common stock for the security holders named therein.

            Proceeds, net of initial purchasers’ fees, from theoffering totaled $133.8 million, which were used to repurchase 9,835,125 shares of our common stock from Continental at$13.60125 per share pursuant to a stock repurchase agreement with Continental.  After this repurchase, Continental’sbeneficial ownership interest of our common stock decreased to below 50%.  See “Note 9 - Stockholders’Deficit” and “Relationship with Continental” in Management’s Discussion and Analysis of Financial Conditionand Results of Operations for detailed discussion of the change in Continental’s beneficial ownership interest of our commonstock during the third quarter of 2003.

            Repayment of the convertible notes is jointly and severallyguaranteed on an unconditional basis by ExpressJet Airlines, Inc., our indirect wholly owned subsidiary. Except as otherwisespecified in the indenture pursuant to which the notes were issued, there are no restrictions on the ability of such subsidiary totransfer funds to us in the form of cash dividends, loans or advances. General provisions of applicable state law, however, maylimit the ability of any subsidiary to pay dividends or make distributions to us in certain circumstances.

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            Separate financial statements of ExpressJet Airlines, Inc.are not included herein because the aggregate assets, liabilities, earnings, and equity of that subsidiary are substantiallyequivalent to our assets, liabilities, earnings and equity on a consolidated basis; ExpressJet Airlines, Inc. is jointly andseverally liable for the repayment of the notes; and the separate financial statements and other disclosures concerning ExpressJetAirlines, Inc. are not deemed by us to be material to investors.

            The amount of all scheduled debt and capital leasematurities, as described in Notes 6, 7 and 8 above, due before December 31, 2003 and over the next five years and thereafter is asfollows (in millions):

| October 1, 2003 through December 31, 2003.................................. | $            | 27.4                                                                                                                                   |
|-----------------------------------------------------------------------------|--------------|----------------------------------------------------------------------------------------------------------------------------------------|
| Year ending December 31,                                                    |              |                                                                                                                                        |
|                                                                             |    | 2004........................................................................................        | $ | 69.4 |
|                                                                             |              | 2005........................................................................................        | $ | 110.2 |
|                                                                             |              | 2006........................................................................................        | $ | 19.5 |
|                                                                             |              | 2007........................................................................................        | $ | 2.5 |
|                                                                             |              | 2008........................................................................................        | $ | 140.9 |
|                                                                             |              | Thereafter...............................................................................                                              | $ | 14.3 |

            The table above assumes the senior convertible notes will bedue on August 1, 2008, the earliest date the holders of the notes may require us to repurchase the notes. 

**Note 9 – Stockholders’ Deficit**

            As discussed in “Note 8 - 4.25% Senior ConvertibleNotes due 2023”, the proceeds, net of initial purchasers’ fees, from our senior convertible notes offering of $133.8million were used to repurchase 9,835,125 shares of our common stock owned by Continental.  The common stock repurchased isrecorded as a reduction to the par value of shares being retired, and retained earnings are reduced by the difference between thecost of the shares and their par value.  As a result of this retirement of our common stock, we recorded a $133.8 millionreduction to our retained earnings and our common stock outstanding was reduced from 64,000,000 shares to 54,164,875 shares. See further discussion at “Relationship with Continental” within Management’s Discussion and Analysis ofFinancial Condition and Results of Operations regarding Continental’s beneficial ownership in our company. 

**Note 10 – New Accounting Pronouncements**

            Financial Accounting Standards Board InterpretationNo. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees ofIndebtedness of Others” (“Interpretation 45”), significantly changed current practice in the accounting for, anddisclosure of, guarantees.  Interpretation 45 requires a guarantor to recognize, at the inception of a guarantee, a liabilityfor the fair value of the obligation undertaken in issuing the guarantee.  Interpretation 45 also expanded the disclosuresrequired to be made by a guarantor about its obligations under certain guarantees that it has issued.  Interpretation45’s disclosure requirements were effective for financial statements of interim or annual periods ending after December 15,2002, while the initial recognition and initial measurement provisions were applicable on a prospective basis to guarantees issuedor modified after December 31, 2002.  We adopted Interpretation 45 effective January 1, 2003, which did not have amaterial impact on our results of operations or financial position.

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            In January 2003, the Financial Accounting Standards Boardissued Interpretation No. 46, “Consolidation of Variable Interest Entities” (“Interpretation46”)*.*  The objective of Interpretation 46 was to improve financial reporting by companies involved with variableinterest entities.  Prior to the effectiveness of Interpretation 46, a company generally included another entity in itsconsolidated financial statements only if it controlled the entity through voting interests.  Interpretation 46 changed thatstandard by requiring a variable interest entity to be consolidated by a company if that company was subject to a majority of therisk of loss from the variable interest entity’s activities or entitled to receive a majority of the entity's residualreturns or both.  The consolidation requirements of Interpretation 46 applied immediately to variable interest entitiescreated after January 31, 2003.  The consolidation requirements applied to older entities in the first fiscal year or interimperiod beginning after June 15, 2003.  Certain of the disclosure requirements applied to all financial statements issued afterJanuary 31, 2003, regardless of when the variable interest entity was established.  Our adoption of Interpretation 46 did nothave a material impact on our results of operations or financial position as we do not have activities with any entities that wouldfall under this interpretation.

            On July 1, 2003, we adopted Statement of Financial AccountingStandard No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity".  Uponadoption, we reclassified our mandatorily redeemable preferred stock of subsidiary of $5.0 million to long-term debt.  We alsobegan to recognize dividends declared related to our mandatorily redeemable preferred stock of subsidiary as interestexpense.  This standard has no other impact on our results of operations or financial condition.

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**Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations.**

            The following discussion may contain forward-lookingstatements. ExpressJet Holdings, Inc., and its wholly owned subsidiaries, XJT Holdings, Inc., and ExpressJet Airlines, Inc., whichoperates as Continental Express (together “ExpressJet”, “we”, “us”, and “our”),rely on this safe harbor in making these disclosures.  These statements are not limited to historical facts, but reflect ourcurrent beliefs, expectations or intentions regarding future events. There are a number of factors that could cause actual resultsto differ materially from those in the forward-looking statements. Some of the known risks that could significantly impact ourresults include, but are not limited to, our dependence on our capacity purchase agreement with Continental Airlines, Inc.(“Continental”); our dependence on Continental’s financial and operational strength; labor costs and relations,including the results of union contract negotiations; flight disruptions as a result of operational matters; deliveries ofadditional aircraft; our ability to implement our growth strategy; regulatory developments and costs, including the costs and othereffects of enhanced security measures and other possible regulatory requirements; our high leverage; and competition and industryconditions. Additional information concerning risk factors that could affect our actual results are described in our filings withthe Securities and Exchange Commission (“SEC”), including our annual report on Form 10-K for the year ended December31, 2002 (the “2002 10-K”).  The events described in the forward-looking statements might not occur or might occurto a materially different extent than described herein.  We undertake no duty to update or revise any of our forward-lookingstatements, whether as a result of new information, future events or otherwise.

            Our website address is www.expressjet.com.  All of ourfilings with the SEC are available free of charge through our website as soon as reasonably practicable after we file them with, orfurnish them to, the SEC.

**RESULTS OF OPERATIONS**

            The following discussion provides an analysis of our resultsof operations and reasons for material changes therein for the three and nine months ended September 30, 2003 as compared to thecorresponding periods ended September 30, 2002.

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***Comparison of Three Months Ended September 30, 2003 to Three Months Ended September 30, 2002***

            The following table sets forth information regarding ouroperating expense components.  Individual operating expense components are expressed as a percentage of our total operatingrevenues and as cents per available seat mile (“ASM”).

|                                                      |   | **Three Months Ended September 30,** |
|------------------------------------------------------|---|--------------------------------------|
|                                                      |   | ****                                 |
|                                                      |   | **2003**                             |  |  | **2002** |
|                                                      |   | ****                                 |  |  | **** |
|                                                      |   |                                      |  | **Percent** |  | **Cents** |  |  |  |  | **Percent** |  | **Cents** |
|                                                      |   |                                      |  | **of** |  | **per** |  |  |  |  | **of** |  | **Per** |
|                                                      |   | **Amount**                           |  | **Revenue** |  | **ASM** |  |  | **Amount** |  | **Revenue** |  | **ASM** |
|                                                      |   |                                      |  |  |  |  |  |  |  |  |  |  |  |
|                                                      |   | **(In thousands)**                   |  |  |  |  | **(In thousands)** |  |  |
|                                                      |   |                                      |  |  |  |  |  |  |  |  |  |  |  |
| Wages, salaries and related costs...                 | $ | 73,703                               |   | 21.4 | % | 3.25 |    | $ | 58,075 |  | 21.5 | % | 3.63 |
| Aircraft rentals..................................   |   | 64,205                               |  | 18.7 | % | 2.83 |  |  | 50,688 |  | 18.8 | % | 3.17 |
| Aircraft fuel....................................... |   | 38,288                               |  | 11.1 | % | 1.69 |  |  | 26,046 |  | 9.6 | % | 1.63 |
| Maintenance, materials and repairs..                 |   | 33,508                               |  | 9.8 | % | 1.48 |  |  | 24,070 |  | 8.9 | % | 1.51 |
| Other rentals and landing fee...........             |   | 27,267                               |  | 7.9 | % | 1.20 |  |  | 21,207 |  | 7.9 | % | 1.33 |
| Ground handling................................      |   | 23,614                               |  | 6.9 | % | 1.04 |  |  | 18,429 |  | 6.8 | % | 1.15 |
| Outside services...............................      |   | 5,829                                |  | 1.7 | % | 0.26 |  |  | 4,934 |  | 1.8 | % | 0.31 |
| Depreciation and amortization...........             |   | 5,265                                |  | 1.5 | % | 0.23 |  |  | 6,088 |  | 2.3 | % | 0.38 |
| Aircraft related and other insurance                 |   | 1,987                                |  | 0.6 | % | 0.09 |  |  | 4,678 |  | 1.7 | % | 0.29 |
| Other operating expenses................             |   | 22,984                               |  | 6.7 | % | 1.00 |  |  | 18,549 |  | 6.9 | % | 1.16 |
|                                                      |   |                                      |  |  |  |  |  |  |  |  |  |  |  |
|                                                      | $ | 296,650                              |  | 86.3 | % | 13.07 |  | $ | 232,764 |    | 86.2 | % | 14.56 |
|                                                      |   |                                      |  |  |  |  |  |  |  |  |  |  |  |

            Although most of the individual expense components haveincreased during the three months ended September 30, 2003 as compared to the same period in 2002, the table above demonstratesincreased efficiencies in our operations.  We have grown by 41.9%, as measured by ASMs, while our costs have not increasedratably as a result of our continuing efforts to reduce costs and to operate as efficiently as possible.  We continuouslyendeavor to provide Continental cost effective services and to remain as competitive as possible compared to other regional aircarriers.

***General***

            We currently receive primarily all of our revenue fromContinental under our capacity purchase agreement, pursuant to which Continental purchases all of our capacity and pays us perscheduled block hour together with certain incentive payments and reimbursements.  Our 13.7% operating margin included thebenefits of productivity savings related to labor and $3.0 million in performance incentive payments derived from the capacitypurchase agreement.  The performance incentive payments were made to us primarily due to our high controllable completionfactor (excluding weather and air traffic control cancellations) of 99.7% for the third quarter 2003 as compared to our historicalcontrollable completion factor of 98.6%.

            Under the capacity purchase agreement, a substantial portionof our costs are reconciled for differences between our actual costs and the expected costs included in our block hour rates toallow us to operate within an operating margin band of 8.5% to 11.5% ("costs within the margin band”).  During the thirdquarter, our actual costs within the margin band were favorable to the estimates used in the block hour rates; thus, our operatingmargin under the capacity purchase agreement before reconciliation payments exceeded 11.5%.  The favorable results wereprimarily due to savings in maintenance, material and repairs, passenger servicing costs and other operating expenses. Consequently, during the three months ended September 30, 2003 and 2002 we made reconciliation payments to Continental totaling$10.0 million and $7.7 million.

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******

***Operating Revenue***

            The increase in our operating revenue during the three monthsended September 30, 2003 as compared to the same period in 2002 was primarily due to a 29.3% increase in actual block hoursflown. 

***Operating Expenses***

            The increase in our wages, salaries and related costs duringthe three months ended September 30, 2003 as compared to the same period in 2002 was due primarily to the following factors:

| · |    | increases in our work force to support the growth in our operations and rate increases for certain employees in accordance withtheir collective bargaining agreements.  The total increase due to these factors was approximately $10.4 million; and |
|----------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · |              | $5.2 million from higher employee benefit costs as a result of increases in medical costs.  We expect the cost to providehealth and medical benefits to our employees will continue to increase for the remainder of the year.                       |

            We are currently engaged in labor negotiations with ourpilots, who are represented by the Air Line Pilots Association, International, in connection with a collective bargaining agreementthat became amendable in October 2002.  We have also begun labor negotiations with our mechanics, who are represented by theInternational Brotherhood of Teamsters, in connection with a collective bargaining agreement that will be amendable in February2004.  At this time, we cannot predict the impact these negotiations will have on our financial results. 

            The increase in aircraft rentals during the three monthsended September 30, 2003 as compared to the same period in 2002 was due to an increase in the number of regional jets in our fleet,which have higher average rental rates than turboprop aircraft.  This increase was offset by $3.0 million as a result of theelimination of turboprop aircraft from our fleet. 

            The increase in aircraft fuel expense during the three monthsended September 30, 2003 as compared to the same period in 2002 was due to a 36.2% increase in fuel consumption and an 8.0%increase in fuel price.  This consumption increase was the result of replacing turboprop aircraft with regional jets, whichhave a higher fuel burn rate, as well as an increase in block hours flown.  Under the capacity purchase agreement and therelated fuel purchase agreement with Continental, we incur a fuel price equal to the lower of the actual cost of fuel or theagreed-upon cap.  Our caps on fuel are 66.0 cents and 61.1 cents for 2003 and 2002.**  The 8.0% fuel price increasewas the result of the difference between our fuel cap in 2003 as compared to 2002.

            The increase in maintenance, materials and repairs during thethree months ended September 30, 2003 as compared to the same period in 2002 was primarily due to a 41.8% increase in jet flighthours and a 5.5% increase in rate per flight hour related to our power-by-the-hour contracts.  The remaining change is due toan increase in general maintenance expense to support the continuing growth of our fleet.

            The increase in other rentals and landing fees during thethree months ended September 30, 2003 as compared to the same period in 2002 was primarily due to a $3.9 million increase inlanding fees as a result of a 20.8% increase in landing weights and a 9.8% increase in rates per landing weight at various airportfacilities.  Additionally, as a result of Cleveland Airport Authority’s annual reconciliation, we recorded a one-timelanding fee expense of approximately $1.2 million in September 2003. 

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            The increase in other operating expenses during the threemonths ended September 30, 2003 as compared to the same period in 2002 was primarily due to the following factors:

| · |              | $0.9 million increase in passenger liability insurance;                                                                                                                                                                    |
|----------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · |    | approximately $0.7 million increase in airport facility related expenses such as cleaning, maintenance, utilities andsupplies;                                                                                             |
| · |              | $0.8 million increase due to higher fuel tax as a result of higher fuel consumption; and                                                                                                                                   |
| · |              | $0.4 million of government grant received in the third quarter of 2002 pursuant to the Air Transportation Safety and SystemStabilization Act (the “Stabilization Act”) that was recorded as an expense credit. |

***Nonoperating Expenses***

            Our interest expense is primarily related to our loanagreement with Export Development Canada (“EDC”), our note payable to Continental and our senior convertiblenotes.  Our loan agreement with EDC accrues interest at the forward six-month London interbank offered rate(“LIBOR”) plus 1.75% per annum.  Our note payable to Continental bore an annual interest rate of 2.4% and 3.1% forthe three months ended September 30, 2003 and 2002.  Under our note payable to Continental, the interest rate was set at thethree-month LIBOR plus 1.25% per annum, subject to a cap of 3.5% in 2002, 5.4% in 2003 and 6.7% in 2004.  There is no interestrate cap after 2004.  The interest rate on our senior convertible notes is 4.25% per annum. The decrease in interest expenseduring the three months ended September 30, 2003 as compared to the same period in 2002 was primarily due to a decrease in our notepayable balance to Continental from $395.5 million at the beginning of the third quarter in 2002 to $227.0 million at the beginningof third quarter in 2003.  This decrease was partially offset by increases in interest expense related to our loan agreementwith EDC and our senior convertible notes.

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******

***Comparison of Nine Months Ended September 30, 2003 and Nine Months Ended September 30, 2002***

            The following table sets forth information regarding ouroperating expense components.  Individual operating expense components are expressed as a percentage of our total operatingrevenues and as cents per ASM.

|                                                     |   | **Nine Months Ended September 30,** |
|-----------------------------------------------------|---|-------------------------------------|
|                                                     |   | ****                                |
|                                                     |   | **2003**                            |  |  | **2002** |
|                                                     |   | ****                                |  |  | **** |
|                                                     |   |                                     |  | **Percent** |  | **Cents** |  |  |  |  | **Percent** |  | **Cents** |
|                                                     |   |                                     |  | **of** |  | **per** |  |  |  |  | **of** |  | **Per** |
|                                                     |   | **Amount**                          |  | **Revenue** |  | **ASM** |  |  | **Amount** |  | **Revenue** |  | **ASM** |
|                                                     |   |                                     |  |  |  |  |  |  |  |  |  |  |  |
|                                                     |   | **(In thousands)**                  |  |  |  |  | **(In thousands)** |  |  |
|                                                     |   |                                     |    |  |  |  |  |  |  |  |  |  |  |
| Wages, salaries and related costs...                | $ | 209,000                             |  | 21.5 | % | 3.42 |   | $ | 176,142 |    | 21.9 | % | 3.87 |
| Aircraft rentals.................................   |   | 182,911                             |  | 18.8 | % | 2.99 |  |  | 145,662 |  | 18.1 | % | 3.20 |
| Aircraft fuel...................................... |   | 103,841                             |  | 10.7 | % | 1.70 |  |  | 72,986 |  | 9.1 | % | 1.60 |
| Maintenance, materials and repairs..                |   | 96,657                              |  | 10.0 | % | 1.58 |  |  | 72,584 |  | 9.0 | % | 1.59 |
| Other rentals and landing fee...........            |   | 74,983                              |  | 7.7 | % | 1.23 |  |  | 64,681 |  | 8.0 | % | 1.42 |
| Ground handling...............................      |   | 65,824                              |  | 6.8 | % | 1.08 |  |  | 54,851 |  | 6.8 | % | 1.20 |
| Outside services..............................      |   | 21,939                              |  | 2.3 | % | 0.36 |  |  | 16,561 |  | 2.1 | % | 0.36 |
| Depreciation and amortization..........             |   | 14,911                              |  | 1.5 | % | 0.24 |  |  | 21,900 |  | 2.7 | % | 0.48 |
| Aircraft related and other insurance                |   | 4,076                               |  | 0.4 | % | 0.07 |  |  | 13,850 |  | 1.7 | % | 0.30 |
| Security fee reimbursement.............             |   | (3,034                              | ) | (0.3 | %) | (0.05 | ) |  | - |  | - |  | - |
| Other operating expenses................            |   | 63,974                              |  | 6.6 | % | 1.05 |  |  | 56,551 |    | 7.0 | %   | 1.25 |
|                                                     |   |                                     |  |  |  |  |  |  |  |  |  |  |  |
|                                                     | $ | 835,082                             |  | 86.0 | % | 13.67 |  | $ | 695,768 |  | 86.4 | % | 15.27 |
|                                                     |   |                                     |  |  |  |  |  |  |  |  |  |  |  |

            Although most of the individual expense components haveincreased during the nine months ended September 30, 2003 as compared to the same period in 2002, the table above demonstratesincreased efficiencies in our operations.  We have grown by 34.1%, as measured by ASMs, while our costs have not increasedratably as a result of our continuing efforts to reduce costs and to operate as efficiently as possible. 

# ******

***General***

            Our operating margin for the nine months ended September 30,2003 was 14.0%.  The operating margin included the benefits of productivity savings related to labor and $10.4 million inperformance incentive payments.  The performance incentive payments were made to us primarily due to our high controllablecompletion factor (excluding weather and air traffic control cancellations) of 99.8% for the nine months ended September 30, 2003as compared to our historical controllable completion factor of 98.4%.

            During the nine months ended September 30, 2003 and 2002, wemade reconciliation payments to Continental totaling $20.7 million and $10.7 million.  These reconciliation payments arecalculated on a quarterly basis as part of our quarterly reconciliation of differences between our actual costs and the costswithin the margin band. 

***Operating Revenue***

            The increase in our operating revenue during the nine monthsended September 30, 2003 as compared to the same period in 2002 was primarily due to a 17.0% increase in actual block hoursflown.  Operating revenue also increased due to a 3.1% increase in the amount paid by Continental per block hour under thecapacity purchase agreement as a result of flying only regional jets in 2003.

# ******

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******

***Operating Expenses***

            The increase in our wages, salaries and related costs duringthe nine months ended September 30, 2003 as compared to the same period in 2002 was due primarily to the following factors:

| · |     | Higher wages for various work groups due to an increase in our work force to support the growth in our operations and rateincreases for certain employees in accordance with their collective bargaining agreements.  The total increase due to thesefactors was approximately $26.2 million; and |
|----------|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · |                    | $7.5 million from higher employee benefit costs as a result of increases in medical costs.  We expect the cost to providehealth and medical benefits to our employees will continue to increase for the remainder of the year.                                                                    |

            We are currently engaged in labor negotiations with ourpilots and mechanics.  At this time, we cannot predict the impact these negotiations will have on our financialresults. 

            The increase in aircraft rentals during the nine months endedSeptember 30, 2003 as compared to the same period in 2002 was due to an increase in the number of regional jets in our fleet, whichhave higher average rental rates than turboprop aircraft.  This increase was offset by $13.1 million as a result of theelimination of turboprop aircraft from our fleet. 

            The increase in aircraft fuel expense during the nine monthsended September 30, 2003 as compared to the same period in 2002 was due to a 30.5% increase in fuel consumption and an 8.9%increase in fuel price.  This consumption increase was the result of replacing turboprop aircraft with regional jets and anincrease in block hours flown.  The 8.9% increase in fuel price was primarily the result of the difference between our fuelcap in 2003 as compared to 2002.

            The increase in maintenance, materials and repairs during thenine months ended September 30, 2003 as compared to the same period in 2002 was primarily due to a 36.6% increase in jet flighthours and a 5.5% increase in rate per flight hour related to our power-by-the-hour contracts.  The remaining change is due toan increase in general maintenance expense to support the continuing growth of our fleet, offset in part by a decrease in turbopropmaintenance as a result of the elimination of such aircraft from our fleet in 2003.

            The increase in other rentals and landing fees during thenine months ended September 30, 2003 as compared to the same period in 2002 was primarily due to a $8.2 million increase in landingfees as a result of a 17.4% increase in landing weights and an 11.8% increase in rates per landing weight at various airportfacilities.  Additionally, as a result of Cleveland Airport Authority’s annual reconciliation, we recorded a one-timelanding fee expense of approximately $1.2 million in September 2003.

**           ** The increase in other operating expenses during thenine months ended September 30, 2003 as compared to the same period in 2002 was primarily due to the following factors:

| · |                    | $2.3 million increase in passenger liability insurance;                                                                        |
|----------|--------------------|--------------------------------------------------------------------------------------------------------------------------------|
| · |     | Approximately $1.5 million increase in airport facility related expenses such as cleaning, maintenance, utilities andsupplies; |
| · |                    | $2.0 million increase due to higher fuel tax as a result of higher fuel consumption; and                                       |
| · |                    | $0.5 million of government grant received in 2002 pursuant to the Stabilization Act that was recorded as expense credits.      |
|          |                    |                                                                                                                                |

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***Nonoperating Expenses***

******

            The decrease in interest expense during the nine months endedSeptember 30, 2003 as compared to the same period in 2002 was primarily due to a decrease in our note payable balance toContinental from $552.3 million at the beginning of 2002 to $219.8 million as of September 30, 2003.  This decrease waspartially offset by increases in interest expense related to our loan agreement with EDC and our senior convertible notes.

***Outlook***

****

            We are dependent on Continental’s financial andoperational strength, as we currently receive substantially all of our revenue from Continental under our capacity purchaseagreement.  Although the domestic economy is showing signs of recovery and global military conflicts have slowed, unexpectedadverse factors such as sudden increase in fuel price, terrorist attacks against the U.S. and destabilization of the U.S. financialmarkets could cause Continental to further downsize their operations and further reduce expenses, including their level ofcommitment or their utilization of our aircraft under the capacity purchase agreement.  Currently, Continental can provide, atany time, 12-months notice of its intention to reduce the number of our regional jets covered by the agreement.  Under thisprovision, Continental is entitled to decline capacity with respect to any regional jets subject to our firm orders that EmpresaBrasileira de Aeronautica S.A. (“Embraer”) has not delivered to us and up to 25%, over any rolling three-year period,of our regional jets that have been delivered under an agreed upon methodology.  If Continental reduced its commitment and itsutilization of our aircraft under the capacity purchase agreement, our results of operations and financial condition could beadversely affected.  While we have no reason to believe that Continental will reduce its commitment or capacity under thecapacity purchase agreement, based on Continental’s continuing efforts to reduce costs and enhance passenger revenues asannounced in their recent press releases, there can be no assurance that such circumstances will not occur in the future.

            Additionally, although a significant portion of our costs,including those relating to fuel, aircraft rent, substantially all regional jet engine maintenance, passenger related facilityrent, administrative fees from Continental and ground handling expenses, are reimbursed by Continental at actual cost plus a 10%margin under the capacity purchase agreement, certain other costs such as labor and related fringe benefit costs, other maintenanceand general and administrative costs provide risk exposure to us.  Furthermore, we are currently engaged in labor negotiationswith our pilots and mechanics.  At this time we cannot predict the outcome of these negotiations.

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**CERTAIN STATISTICAL INFORMATION**

An analysis of certain statistical information for the periods indicated is as follows:

|                                                                                    |  |  | **Three Months Ended September 30,** |                             |  |              |
|------------------------------------------------------------------------------------|--|--|--------------------------------------|-----------------------------|--|--------------|
|                                                                                    |  |  |                                      | **Increase/****(Decrease)** |
|                                                                                    |  |  | **2003**                             | **2002**                    |  |
|                                                                                    |  |  |                                      |
|                                                                                    |  |  |                                      |                             |  |              |  |  |  |
| Revenue passenger miles (millions) (1)...................                          |  |  | 1,605                                |                             |  | 1,037        |  | 54.8 | % |
| Available seat miles (millions) (2)...........................                     |  |  | 2,269                                |                             |  | 1,599        |  | 41.9 | % |
| Passenger load factor (3).......................................                   |  |  | 70.7                                 | %                           |  | 64.9         | % | 5.8 | pts |
| Block hours (thousands) (4)...................................                     |  |  | 159                                  |                             |  | 123          |  | 29.3 | % |
| Operating cost per available seat mile (cents)........                             |  |  | 13.07                                |                             |  | 14.56        |  | (10.2 | %) |
| Operating cost per block hour...............................                       |  |  | 1,864                                |                             |  | 1,891        |  | (1.4 | %) |
| Average fuel cost, excluding fuel taxes,                                           |  |  |                                      |                             |  |              |  |  |  |
|    per available seat mile (cents)............................      |  |  | 1.69                                 |                             |  | 1.63         |  | 3.7 | % |
| Average price per gallon of fuel excluding                                         |  |  |                                      |                             |  |              |  |  |  |
|    fuel taxes (cents).............................................. |  |  | 66.00                                |                             |  | 61.10        |  | 8.0 | % |
| Fuel gallons consumed (millions)..........................                         |  |  | 58.0                                 |                             |  | 42.6         |  | 36.2 | % |
| Average length of aircraft flight (miles)....................                      |  |  | 502                                  |                             |  | 415          |  | 21.0 | % |
| Actual aircraft in fleet at end of period....................                      |  |  | 218                                  |                             |  | 182          |  | 19.8 | % |
| Average daily utilization of each aircraft (5)..............                       |  |  | 8 hrs 4 min                          |                             |  | 7 hrs 26 min |  | 8.4 | % |
| Controllable completion factor (6)...........................                      |  |  | 99.7                                 | %                           |  | 99.9         | % | (0.2 | pts) |
| Completion factor................................................                  |  |  | 97.9                                 | %                           |  | 98.9         | % | (1.0 | pt) |

| (1) |    | Revenue passenger miles is the number of scheduled miles flown by revenue passengers.                                                                                                    |
|-----|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |              | Available seat miles is the number of seats available for passengers multiplied by the number of scheduled miles those seats areflown.                                                   |
| (3) |              | Passenger load factor is revenue passenger miles divided by available seat miles.                                                                                                        |
| (4) |              | Block hours are the hours from gate departure to gate arrival.                                                                                                                           |
| (5) |              | Average daily utilization of each aircraft is the average number of block hours per day that an aircraft in revenue service isoperated (from gate departure to gate arrival).            |
| (6) |              | Controllable completion factor is the actual number of completed flights, excluding cancelled flights due to weather and airtraffic control, divided by the number of scheduled flights. |

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|                                                                                    |  |  | **Nine Months Ended September 30,** |                             |  |              |
|------------------------------------------------------------------------------------|--|--|-------------------------------------|-----------------------------|--|--------------|
|                                                                                    |  |  |                                     | **Increase/****(Decrease)** |
|                                                                                    |  |  | **2003**                            | **2002**                    |
|                                                                                    |  |  |                                     |
|                                                                                    |  |  |                                     |                             |  |              |  |  |  |
| Revenue passenger miles (millions) (1)...................                          |  |  | 4,139                               |                             |  | 2,875        |  | 44.0 | % |
| Available seat miles (millions) (2)...........................                     |  |  | 6,109                               |                             |  | 4,555        |  | 34.1 | % |
| Passenger load factor (3).......................................                   |  |  | 67.8                                | %                           |  | 63.1         | % | 4.7 | pts |
| Block hours (thousands) (4)...................................                     |  |  | 433                                 |                             |  | 370          |  | 17.0 | % |
| Operating cost per available seat mile (cents)........                             |  |  | 13.67                               |                             |  | 15.27        |  | (10.5 | %) |
| Operating cost per block hour...............................                       |  |  | 1,929                               |                             |  | 1,879        |  | 2.7 | % |
| Average fuel cost, excluding fuel taxes,                                           |  |  |                                     |                             |  |              |  |  |  |
|    per available seat mile (cents)............................      |  |  | 1.70                                |                             |  | 1.60         |  | 6.2 | % |
| Average price per gallon of fuel excluding                                         |  |  |                                     |                             |  |              |  |  |  |
|    fuel taxes (cents).............................................. |  |  | 66.00                               |                             |  | 60.58        |  | 8.9 | % |
| Fuel gallons consumed (millions)..........................                         |  |  | 157.3                               |                             |  | 120.5        |  | 30.5 | % |
| Average length of aircraft flight (miles)....................                      |  |  | 482                                 |                             |  | 407          |  | 18.4 | % |
| Actual aircraft in fleet at end of period....................                      |  |  | 218                                 |                             |  | 182          |  | 19.8 | % |
| Average daily utilization of each aircraft (5)..............                       |  |  | 7 hrs 45 min                        |                             |  | 7 hrs 44 min |  | 0.1 | % |
| Controllable completion factor (6)...........................                      |  |  | 99.8                                | %                           |  | 99.9         | % | (0.1 | pts) |
| Completion factor................................................                  |  |  | 98.2                                | %                           |  | 99.0         | % | (0.8 | pts) |

| (1) |    | Revenue passenger miles is the number of scheduled miles flown by revenue passengers.                                                                                                    |
|-----|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |              | Available seat miles is the number of seats available for passengers multiplied by the number of scheduled miles those seats areflown.                                                   |
| (3) |              | Passenger load factor is revenue passenger miles divided by available seat miles.                                                                                                        |
| (4) |              | Block hours are the hours from gate departure to gate arrival.                                                                                                                           |
| (5) |              | Average daily utilization of each aircraft is the average number of block hours per day that an aircraft in revenue service isoperated (from gate departure to gate arrival).            |
| (6) |              | Controllable completion factor is the actual number of completed flights, excluding cancelled flights due to weather and airtraffic control, divided by the number of scheduled flights. |

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**LIQUIDITY AND CAPITAL COMMITMENTS**

            Our primary source of liquidity is cash flow provided fromour operations.  For the three and nine months ended September 30, 2003, our operations provided $63.3 million and $170.8million, respectively, in cash flow.  This compares with $50.6 million and $129.9 million for the same periods in 2002. As of September 30, 2003, we also have $3.2 million of restricted cash, which is used as collateral for our workers’compensation coverage.  Although our operations - as measured by available seat miles (ASM) - have grown over 34.1%(year-to-date), our costs have not increased ratably as a result of our continuing efforts to reduce costs and to operate asefficiently as possible.  We continuously endeavor to provide cost effective services to Continental and to remain ascompetitive as possible compared to other regional air carriers.  However, we cannot ensure that our future costs will notincrease significantly due to factors beyond our control.  For a detailed discussion regarding potential impacts to our futurecosts, please see “Future Costs” included in this section below.

            During the nine months ended September 30, 2003, we spent$38.2 million on flight and ground equipment.  For the remainder of the year, we expect capital expenditures for fleet(primarily relating to spare parts and engines) and non-fleet (primarily relating to software application and automation projects,facility improvements, maintenance and ground equipment) to be approximately $15.3 million, in order to support our planned fleetdeliveries and the increase in our flight schedules under our capacity purchase agreement with Continental.

            We are party to a loan agreement under which EDC advanced tous $10.7 million on May 23, 2003 and $6.6 million on September 30, 2003.  The loan is secured by certain of our flightsimulators, flight data software and other equipment related to the simulators.  We utilized all of the proceeds from theadvances to reduce the principal under our note payable to Continental.  The amount due to EDC accrues interest at the forwardsix-month LIBOR plus 1.75% per annum.  The term of each advance to us is 96 months.  The financing arrangement hascustomary representations, warranties and covenants.  Additionally, Continental is the guarantor of this loan, and a defaultunder the guarantee would cause an acceleration of the loan.

            The balance on our note payable to Continental as ofSeptember 30, 2003 was $219.8 million.  We made the quarterly principal and interest payments on our note to the extentrequired on March 31, June 30 and September 30, 2003, net of prepayments made in prior periods, to reduce the principal balance ofour note payable to Continental.  Additionally, during the first nine months ended September 30, 2003 we made voluntaryprepayments totaling $83.3 million, which reduced our required principal and interest payments for September 30, 2003, March 31,2004, June 30, 2004 and our final principal payment.  We anticipate that we will be able to meet future obligations related tothe terms of this promissory note.  Furthermore, under our promissory note with Continental, there are no restrictions on ourability to incur additional indebtedness in the future.

            During the third quarter of 2003, we completed the privateplacement of $137.2 million senior convertible notes due 2023 which were resold by the initial purchasers to qualifiedinstitutional buyers pursuant to Rule 144A of the Securities Act of 1933. Cash interest is payable on the notes at a rate of 4.25%per year on the principal amount at maturity, payable semiannually in arrears on February 1 and August 1 of each year, beginningFebruary 1, 2004.  The aggregate amount of the principal will be due on August 1, 2023.  ExpressJet Airlines, Inc., ourindirect wholly owned subsidiary, guaranteed the notes on an unsecured senior basis.  See “Note 8 – 4.25% SeniorConvertible Notes due 2023” in Notes to Consolidated Financial Statements for a detailed discussion of the terms of theconvertible notes.  The proceeds, net of initial purchasers’ fees, from our senior convertible notes offering of $133.8million were used to repurchase 9,835,125 shares of our common stock owned by Continental. 

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            As of September 30, 2003, we also had approximately $4.9million (including current maturities) of capital lease obligations.

            Other than the financing activities described above, we donot have any other sources of long-term borrowings or available lines of credit. 

            We expect to fund our future capital commitments throughinternally generated funds together with general financings and aircraft financing transactions.  However, there can be noassurance that sufficient financing will be available for all aircraft and other capital expenditures not covered by firm financingcommitments. 

******

***Relationship with Continental***

            We currently receive substantially all of our revenue fromContinental under our capacity purchase agreement, pursuant to which Continental purchases all of our capacity and pays usspecified rates per block hour flown by our aircraft, together with certain incentive payments and reimbursements.  As aresult, we are dependent on Continental and can be directly affected by its financial and operational strength.  In addition,under the capacity purchase agreement, both Continental and we have the right to “meet and confer” with the otherregarding any material change in the underlying assumptions regarding the cost of providing services under the capacity purchaseagreement and whether the compensation provisions of the capacity purchase agreement should be changed as a result of such changein assumptions.  Neither Continental nor we are required under the capacity purchase agreement to accept any such changes inthe compensation provisions.

            Continental held 30.9% of our outstanding common stock as ofSeptember 30, 2003.  During the third quarter of 2003, we completed the private placement of $137.2 million senior convertiblenotes due 2023.  The proceeds, net of initial purchasers’ fees, from the notes of $133.8 million were used to repurchase9,835,125 shares of our common stock from Continental.  This repurchase reduced our outstanding common stock from 64,000,000shares to 54,164,875 shares.  As a result of this transaction, Continental’s beneficial interest in our common stockdecreased from 53.1% to 44.6% as of September 3, 2003.   In addition, Continental contributed approximately $100 million inshares of our common stock to Continental's defined benefit pension plan on September 9, 2003, which further reduced its ownershipto 30.9%.  As announced previously by Continental, it intends to sell or otherwise dispose of some or all of its interest inour common stock, subject to market conditions.  Based on current information and our capacity purchase agreement withContinental, we do not believe that Continental’s sale of its ownership interest will have an adverse impact on our resultsof operations or financial position.

            Currently, Continental can provide at any time a 12-monthsnotice of its intention to reduce the number of our regional jets covered by our capacity purchase agreement with them.  Underthis provision, Continental is entitled to decline capacity with respect to any regional jets subject to our firm orders thatEmbraer has not delivered to us and up to 25%, over any rolling three-year period, of our regional jets that have been deliveredunder an agreed upon methodology.  If Continental reduces its commitment and its utilization of our aircraft under thecapacity purchase agreement, our results of operations and financial condition could be adversely affected.  While we have noreason to believe, based on information currently available, that Continental will reduce its commitment or capacity under thecapacity purchase agreement, there can be no assurance that such circumstances will not occur in the future.

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***Purchase Commitments***

            As of September 30, 2003, we had firm commitments to acquire56 Embraer regional jets.  The estimated aggregate cost of these firm commitments is approximately $1.1 billion.  Inaddition, we expect to purchase up to 11 spare engines for approximately $30.8 million through the second quarter of 2006 relatedto the remaining aircraft on firm order.  We currently do not have any financing in place for these spare engines.  Wealso have options to purchase an additional 100 Embraer regional jets.  We will not have any obligation to take any of theaircraft under firm commitments if they are not financed by a third party and leased to either Continental or us. 

***Aircraft Leases***

            We have significant lease and sublease obligations foraircraft that are classified as operating leases, which are not reflected as assets and liabilities on our balance sheet. These leases expire between 2013 and 2019.  As of September 30, 2003, our expected total minimum annual rental payments for2003 under current and future non-cancelable aircraft operating leases are approximately $249.3 million.  A substantialportion of our aircraft is leased directly by Continental from third parties, and is in turn subleased to us.  Any default byContinental under the current lease arrangements may adversely affect our access to our current and future aircraft throughEmbraer. 

***Contractual Obligations and Commercial Commitments***

******

            The following table summarizes the expected effect our debtand other contractual obligations have on our cash flows in the future periods as of September 30, 2003.  This table updatesthe material changes to the commitments as discussed in Part II.  Item 7. Management’s Discussion and Analysis ofFinancial Condition and Results of Operations, “Liquidity and Capital Commitments- Contractual Obligations and CommercialCommitments” table in our 2002 10-K (in millions):

|                                                                          |   |           |              |   | **Payments Due**     |
|--------------------------------------------------------------------------|---|-----------|--------------|---|----------------------|
|                                                                          |   |           |              |   |                      |
| **Contractual Obligations**                                              |   | **Total** |              |   | **Less than 1 year** |  |  | **1-3 Years** |  |  | **4-5 Years** |  |  | **Over 5 Years** |
|                                                                          |   |           |              |   |                      |  |  |  |  |  |  |  |  |  |
| Note payable to Continental Airlines (1) ............................... | $ | 229.4     |    | $ | 71.7                 |    | $ | 157.7 |    | $ | - |    | $ | - |
| 4.25% Senior Convertible Notes due 2023 (2)............................. |   | 166.3     |              |   | 5.7                  |  |  | 11.7 |  |  | 148.9 |  |  | - |
| Other Long-term Debt (3) ..........                                      |   | 31.6      |              |   | 1.8                  |  |  | 4.1 |  |  | 6.9 |  |  | 18.8 |
|                                                                          |   |           |              |   |                      |  |  |  |  |  |  |  |  |  |
| Total contractual cash obligations..............................         | $ | 427.3     |              | $ | 79.2                 |  | $ | 173.5 |  | $ | 155.8 |  | $ | 18.8 |
|                                                                          |   |           |              |   |                      |  |  |  |  |  |  |  |  |  |

| (1) |    | Our quarterly payment for principal and interest on our note payable to Continental is $27.9 million, to be paid through theearlier of March 31, 2007 or until the principal balance and any accrued unpaid interest are paid in full.  The expectedeffect of our note payable on our cash flows is calculated based on the forward three-month LIBOR on September 30, 2003 plus 1.25%per annum and based on our current principal balance.  It includes principal payments of $219.8 million and estimated interestpayments of $9.6 million over the remaining life of the note payable.  See “Note 7 – Note Payable to ContinentalAirlines, Inc.” in our Notes to Consolidated Financial Statements. |
|-----|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (2) |              | **** The expected effect our 4.25% senior convertible notes due 2023 has on our future cash flows as stated in the table aboveassumes the notes will be due on August 1, 2008, the earliest date the holders of the notes may require us to repurchase thenotes.  If the notes are held until August 1, 2023, the maturity date, our obligations outlined above would increase by $87.5million, as a result of additional interest expense related to these notes.  See “Note 8 – 4.25% SeniorConvertible Notes due 2023” in our Notes to Consolidated Financial Statements for detailed discussion of these notes.                                                                                                                                                                                                                                                                                            |
|-----|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3) |    | **** Other long-term debt represents our obligations for the advances received under our loan agreement with EDC and our Series ACumulative Mandatorily Redeemable Preferred Stock of Subsidiary due April 16, 2012 (“Series A PreferredStock”).** ** See detailed discussion of our Series A Preferred Stock in Item 8. Financial Statements andSupplementary Data –Notes to Consolidated Financial Statements—“Note 9 – Mandatorily Redeemable PreferredStock of Subsidiary” in our 2002 10-K.  Also see “Note 6- Long-term Debt and Capital Leases” in our Notes toConsolidated Financial Statements in this filing for detailed discussion of our loan agreement with EDC.  The expected effectof our financing arrangement with EDC on our future cash flows is calculated based on the forward six-month LIBOR on September 30,2004 plus 1.75% per annum.  |

***General Guarantees and Indemnifications***

            We are a party to many contracts in which we agree toindemnify third parties for liabilities that arise out of or relate to the subject matter of the contract.  We cannot estimatethe potential amount of future payments under these indemnities until events arise that would trigger a liability under theindemnities.  However, we expect that we would be covered by insurance for many such liabilities, subject to deductibles.

******

***Future Costs***

            We remain committed to controlling our costs throughcontinually identifying and executing cost saving initiatives; however, we believe that our costs may still be adversely affectedin the future by:

| · |     | changes in wages, salaries and related fringe benefit costs.  We are currently engaged in labor negotiations with ourpilots and mechanics**.**  At this time we cannot predict the outcome of these negotiations.  Additionally, we believethat our fringe benefit costs may change due to rising health care costs. |
|----------|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · |                    | changes in the costs of materials and outside services.                                                                                                                                                                                                                                                                             |
| · |                    | changes in governmental regulations, insurance and taxes affecting air transportation and the costs charged for airport access,including new security requirements.                                                                                                                                                                 |
| · |                    | any material changes in the underlying assumptions related to the cost of providing services under the capacity purchaseagreement. Any dispute will be submitted to a third party for arbitration if a mutual agreement cannot be met.                                                                                              |

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| · |     | higher aircraft ownership costs as new aircraft are delivered, to the extent these aircraft are not covered by the capacitypurchase agreement or if Continental were to declare bankruptcy or otherwise default under the current financing arrangements.                                                                                                                    |
|----------|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · |                    | changes in cost of services currently provided by Continental at fixed rates under the capacity purchase agreement, which will berenegotiated in 2004 and become effective on January 1, 2005.  Under the capacity purchase agreement, if Continental and wecannot reach an agreement on the new rates, the dispute will be submitted to a third party for arbitration. |

**Item 3.  Quantitative and Qualitative Disclosure About Market Risk.**

            We have been and are subject to market risks, includingcommodity price risk (such as, to a limited extent, aircraft fuel prices) and interest rate risk.  See the Notes toConsolidated Financial Statements included in our 2002 10-K for a description of our accounting policies and other informationrelated to these financial instruments.

***Aircraft Fuel***

            Effective January 1, 2001, we entered into the capacitypurchase agreement, which expires December 31, 2010 (subject to extensions by Continental through 2030 and its right to terminatethe agreement without cause after January 1, 2007 upon 12 months' notice or for cause at any time), and a related fuel purchaseagreement with Continental, which terminates when the capacity purchase agreement terminates.  Under these agreements,Continental provides all of our aircraft fuel needs for the aircraft covered by the capacity purchase agreement, and we incur anexpense equal to the lower of the actual cost of the fuel or an agreed-upon cap.  Our fuel expense for 2002 was the lower ofthe actual cost of fuel or 61.1 cents per gallon, and thereafter is the lower of the actual cost of fuel or 66.0 cents pergallon.  For the three and nine months ended September 30, 2003, our cost of fuel was 66.0 cents per gallon versus 61.1 and60.6 for the same periods in 2002.  Under the capacity purchase agreement, we recover our fuel expense from Continental with a10% margin.

***Interest Rates***

            As of September 30, 2003, we had firm commitments to acquire56 Embraer regional jets, which we expect to lease from Continental.  Changes in interest rates may impact the actual cost tous for the related leasing transactions in the future.  However, under our capacity purchase agreement, our block hour rateswill be adjusted higher or lower to reflect any changes in our aircraft rental rates.  We also have potential interest rateexposure with respect to our obligations for the advances received under our loan agreement with EDC, which bears interest at theforward six-month LIBOR plus 1.75% per annum, and our note payable to Continental, which bears interest at the forward three-monthLIBOR plus 1.25% per annum capped at 3.5% in 2002, 5.4% in 2003 and 6.7% in 2004.  Beyond 2004 there is no cap on the interestrate.  The interest rate applicable to these variable rate notes may rise, increasing our interest expense.  The impactof market risk is estimated using a hypothetical increase in interest rates up to the capped rate or by one percentage point forour variable rate long-term debt.  Based on this hypothetical assumption, we would have incurred an additional $2.2 millionand $1.1 million (capped) in interest expense for the nine months ended September 30, 2003 and 2002.  We do not hold long-terminterest-sensitive assets and therefore the value of our assets is not subject to interest rate fluctuations.  We do notpurchase or hold any derivative financial instruments to protect against the effects of changes in interest rates. 

****

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****

**Item 4.  Controls and Procedures**

****

            On October 14, 2003, our Chief Executive Officer and ChiefFinancial Officer performed an evaluation of our disclosure controls and procedures, which have been designed to permit us toeffectively identify and timely disclose important information.  They concluded that these controls and procedures wereeffective as of September 30, 2003.  Additionally, we have not identified any changes in our internal controls over financialreporting during the quarter ended September 30, 2003 that have materially affected, or are reasonably likely to materially affect,our internal controls over financial reporting.

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**PART II - OTHER INFORMATION**

****

**Item 1.        Legal Proceedings.**

****

                   None.

****

**Item 2.        Changes in Securities and Use ofProceeds.**

****

           On August 5, 2003 and September 3, 2003, we issued and sold anaggregate of $137.2 million of unsecured convertible senior notes due 2023, to Citigroup Global Markets Inc., Merrill Lynch, PierceFenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, Credit Suisse First Boston LLC, Goldman, Sachs & Co.and UBS Securities LLC, as the initial purchasers, pursuant to Rule 144A under the Securities Act of 1933 for $133.8 million incash.  In connection with the sale of the notes, the initial purchasers received fees of $3.4 million from us.  The notesbear interest at 4.25% per annum, payable in cash semi-annually in arrears on February 1 and August 1 of each year through maturityon August 1, 2023.  Each note was issued at a price of $1,000 and is convertible into our common stock at a conversion rate of54.9451 shares per $1,000 original principal amount of notes (equivalent to an initial conversion price of approximately $18.20 pershare), subject to adjustment in certain circumstances.  The notes are guaranteed by ExpressJet Airlines, Inc., our indirectwholly owned subsidiary.

           Holders of the notes may convert all or a portion of their notesonly if:  (1) the price of our common stock trades above a specified threshold for and during a specified period; (2) thetrading price for the notes falls below certain thresholds; (3) the notes have been called for redemption; or (4) specificcorporate transactions occur.  Upon any conversion, we may elect to satisfy a call for conversion with cash, shares of commonstock or a combination thereof. 

           We may redeem all or some of the notes for cash at any time on orafter August 4, 2008, at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest, if any, to theredemption date.  Holders may require us to repurchase the notes on August 1 of 2008, 2013 and 2018 (“RedemptionDates”) at a repurchase price equal to 100% of the principal amount, plus accrued and unpaid interest, if any, on therepurchase date.  While we can choose to pay the repurchase price in cash, shares of common stock (valued as set forth in theindenture) or a combination thereof, subject to certain conditions, should we be required to repurchase the notes at any ofthe Redemption Dates, we intend to satisfy that requirement in cash.

           We used the proceeds, net of initial purchasers’ fees, fromthis private placement to repurchase shares of our common stock held by Continental.

**Item 3.        Defaults Upon Senior Securities.**

                   None.

**Item 4.        Submission of Matters to a Vote of SecurityHolders.**

                    None.

**Item 5.        Other Information.**

                   None.

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**Item 6.        Exhibits and Reports on Form 8-K.**

| (a) |    | Exhibits             |
|-----|--------------|----------------------|
|     |              | 31*                  | Rule 13a-14(a)/15d-14(a) Certifications of periodic financial reports of ExpressJet Holdings, Inc. by Chief Executive Officer andChief Financial Officer. |
|     |              | 32**                 | Section 1350 Certifications of periodic financial reports of ExpressJet Holdings, Inc. by Chief Executive Officer and ChiefFinancial Officer. |
|     |              |                      | * | Filed herewith |
|     |              |                      | ** | Furnished herewith |
| (b) |              | Reports on Form 8-K: |
|     |              | (i)                  | Report dated July 1, 2003 reporting Item 5.  “Other Events”.  No financial statements were filed with thisreport, which included a press release announcing June and year-to-date capacity and traffic performance. |
|     |              | (ii)                 | Report dated July 17, 2003 reporting Item 9.  “Regulation FD Disclosures”.  No financial statements werefiled with this report, which included a press release reporting earnings for the second quarter ended June 30, 2003, and certainrelated non-GAAP financial measure reconciliations. |
|     |              | (iii)                | Report dated July 17, 2003 reporting Item 9.  “Regulation FD Disclosures”.  No financial statements werefiled with this report, which included information relating to a Form 8-K filed by Continental Airlines, Inc. and its financialoutlook for the remainder of 2003.  The Form 8-K included information regarding Continental Airlines, Inc. estimates foravailable seat miles growth, fuel gallons consumed and load factors for its Continental Express operations. |
|     |              | (iv)                 | Report dated July 28, 2003 reporting Item 5.  “Other Events”.  No financial statements were filed with thisreport, which included a press release announcing an offering of $125 million in convertible securities and another press releaseannouncing Continental Airlines, Inc.’s registered secondary offering of 5,000,000 shares of its common stock in ExpressJetHoldings, Inc. |
|     |              | (v)                  | Report dated July 30, 2003 reporting Item 5.  “Other Events”.  No financial statements were filed with thisreport, which included a press release announcing the pricing of its private placement of $125 million of convertible notes and useof the net proceeds to repurchase shares of its common stock from Continental Airlines, Inc. at a purchase price of $13.60125 pershare and another press release announcing the termination of Continental Airline Inc.’s secondary offering of shares ofExpressJet Holdings, Inc. common stock. |
|     |              | (vi)                 | Report dated August 1, 2003 reporting Item 5. “Other Events”.  No financial statements were filed with thisreport, which included a press release announcing July and year-to-date capacity and traffic performance. |
|     |              | (vii)                | Report dated August 5, 2003 reporting Item 5.  “Other Events”.  No financial statements were filed with thisreport, which included a press release announcing closure on its offering of $125 million in convertible securities. |
|     |              | (viii)               | Report dated September 2, 2003 reporting Item 5. “Other Events”.  No financial statements were filed with thisreport, which included a press release announcing August and year-to-date capacity and traffic performance. |
|     |              | (ix)                 | Report dated September 3, 2003 reporting Item 5. “Other Events”. and Item 9.  “Regulation FDDisclosure”.  No financial statements were filed with this report, which included a press release announcing completionof the private placement of an additional $7.2 million of 4.25% convertible notes due 2023.  In addition, this report includedinformation relating to a Form 8-K filed by Continental Airlines, Inc. and its financial outlook for the remainder of 2003. The Form 8-K included information regarding Continental Airlines, Inc. estimates for available seat miles growth, fuel gallonsconsumed and load factors for its Continental Express operations. |
|     |              | (x)                  | Report dated September 12, 2003 reporting Item 5. “Other Events”.  No financial statements were filed with thisreport, which included a press release announcing revised outstanding share numbers based on recently disclosed sharerepurchases. |

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**SIGNATURES**

            Pursuant to the requirements of the Securities Exchange Actof 1934, ExpressJet Holdings, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto dulyauthorized.

|                                                                                                       |                              | **EXPRESSJET HOLDINGS, INC.**(Registrant)                                                                                                                                                    |
|------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  Date:  October 17, 2003             |                         | **/s/ Frederick S.Cromer                           ** |
|                                                                         | Frederick S. Cromer Vice President and Chief Financial Officer                                                                             |
|                                                                                                  |                                                                                                                                            |                                                                                                                                                                                              |
|  Date:  October 17, 2003                                                                    |                         | **/s/ PhungNgo-Burns                           **     |
|                                                                         | Phung Ngo-Burns Senior Director and Controller (Principal Accounting Officer)                                                              |

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**INDEX TO EXHIBITSOFEXPRESSJET HOLDINGS, INC.**

|  |    | Exhibits |
|--|--------------|----------|
|  |              | 31*      | Rule 13a-14(a)/15d-14(a) Certifications of periodic financial reports of ExpressJet Holdings, Inc. by Chief Executive Officer andChief Financial Officer. |
|  |              | 32**     | Section 1350 Certifications of periodic financial reports of ExpressJet Holdings, Inc. by Chief Executive Officer and ChiefFinancial Officer. |
|  |              |          | * | Filed herewith |
|  |              |          | ** | Furnished herewith |

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