| **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 March 31, 2007**         |
|                          | **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.)* |
|------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------|------------------------------------------------------|
|                                                                                                  |                                                                                    |                                                      |
| **700 North Sam Houston Parkway West, Suite 200 Houston, Texas***(Address of principal executive offices)* |                                                                                    | ******77067***(Zip Code)*                            |

**832-353-1000***(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 the registrant (1) has filedall reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (orfor such shorter period that the registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.

|      Yes   | [ X ]  |     No  | [  ]  |
|-----------------------------------------------|-----------------------|----------------------------------|-----------------|

            Indicate by check mark whether the registrant isa large accelerated filer, an accelerated filer, or a non-accelerated filter.  See definition of “accelerated filer andlarge accelerated filer” in Rule 12b-2 of the Exchange Act.  (Check one):

| Large accelerated filer | [   ] |      Accelerated filer  | [ X ]  |      Non-accelerated filer | [   ]  |
|-------------------------|-----------------|-------------------------------------------------------|-----------------------|-----------------------------------------------------|-----------------------|

            Indicate by check mark whether the registrant is a shellcompany (as defined in Rule 12b-2 of the Exchange Act).

|      Yes   | [   ]  |     No  | [ X ]  |
|-----------------------------------------------|----------------------------|----------------------------------|-----------------------|

As of May 7, 2007, 54,209,653 shares of common stock were outstanding.

----

**TABLE OF CONTENTS**

| ** **        | ** **   |                                                                                                         |              |          |
|-------------------|--------------|---------------------------------------------------------------------------------------------------------|--------------|----------|
| **PART I.**       |         | **FINANCIAL INFORMATION**                                                                               |              | **PAGE** |
| Item 1.           |         | Financial Statements:                                                                                   |              |          |
|              |         | Consolidated Statements of Operations (Unaudited): Three months ended March 31, 2007 and 2006           |              | 1        |
|              |    | Consolidated Balance Sheets: March 31, 2007 (Unaudited) and December 31, 2006                           |              | 2        |
|                   |              | Condensed Consolidated Statements of Cash Flows (Unaudited): Three months ended March 31, 2007 and 2006 |              | 4        |
|                   |              | Notes to Condensed Consolidated Financial Statements (Unaudited)                                        |              | 5        |
| Item 2.           |         | Management’s Discussion and Analysis of Financial Condition and Results of Operations             |    | 13       |
|   Item 3.    |         | Quantitative and Qualitative Disclosures About Market Risk                                              |              | 20       |
| **** Item 4.      |              | Controls and Procedures                                                                                 |              | 21       |
| **PART II.** |         | **OTHER INFORMATION**                                                                                   |              |          |
| Item 1.           |              | Legal Proceedings                                                                                       |              | 22       |
| Item 1A.          |              | Risk Factors                                                                                            |              | 22       |
| Item 2.           |              | Unregistered Sales of Equity Securities and Use of Proceeds                                             |              | 22       |
| Item 3.           |              | Defaults Upon Senior Securities                                                                         |              | 22       |
| Item 4.           |              | Submission of Matters to a Vote of Security Holders                                                     |              | 22       |
| Item 5.           |              | Other Information                                                                                       |              | 22       |
| Item 6.           |              | Exhibits                                                                                                |              | 23       |
|                   |              | Signatures                                                                                              |              | 24       |
|              |              | Index to Exhibits                                                                                       |              | 25       |

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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 March 31,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|---|----------------------------------|---|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |   |                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |   |                                  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |   | **2007**                         |   |  |  | **2006** |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   |                                  |   |  |  |  |  |
| Operating Revenue.......................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | $ | 412,056                          |   |  | $ | 405,784 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   |                                  |   |  |  |  |  |
| Operating Expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |   |                                  |   |  |  |  |  |
|      Wages, salaries and related costs...........................                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |   | 104,983                          |   |  |  | 92,525 |  |
|      Aircraft rentals........................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |   | 84,583                           |   |  |  | 81,591 |  |
|      Aircraft fuel and related taxes...................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   | 53,586                           |   |  |  | 52,987 |  |
|      Maintenance, materials and repairs..........................                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |   | 48,553                           |   |  |  | 45,753 |  |
|      Ground handling.....................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |   | 24,224                           |   |  |  | 23,508 |  |
|      Other rentals and landing fees..................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |   | 28,377                           |   |  |  | 27,236 |  |
|      Outside services.....................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |   | 14,892                           |   |  |  | 12,168 |  |
|      Depreciation and amortization..................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |   | 6,512                            |   |  |  | 6,429 |  |
|      Other operating expenses........................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |   | 32,006                           |   |  |  | 26,260 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   |                                  |   |  |  |  |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   | 397,716                          |   |  |  | 368,457 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   |                                  |   |  |  |  |  |
| Operating Income........................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |   | 14,340                           |   |  |  | 37,327 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   |                                  |   |  |  |  |  |
| Nonoperating Income (Expense):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |   |                                  |   |  |  |  |  |
|      Interest expense.....................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |   | (1,800                           | ) |  |  | (2,051 | ) |
|      Interest income.......................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   | 3,894                            |   |  |  | 2,975 |  |
|      Capitalized interest.................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |   | 175                              |   |  |  | 101 |  |
|      Equity investment loss. ..........................................                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |   | (98                              | ) |  |  | (390 | ) |
|      Other, net..............................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |   | (58                              | ) |  |  | 46 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   |                                  |   |  |  |  |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |   | 2,113                            |   |  |  | 681 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |   |                                  |   |  |  |  |  |
| Income before Income Taxes........................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |   | 16,453                           |   |  |  | 38,008 |  |
| Income Tax Expense...................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   | 6,286                            |   |  |  | 14,254 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   |                                  |   |  |  |  |  |
| Net Income.................................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  | $ | 10,167                           |   |  | $ | 23,754 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   |                                  |   |  |  |  |  |
| Basic Earnings per Common Share...............................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | $ | 0.19                             |   |  | $ | 0.44 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   |                                  |   |  |  |  |  |
| Diluted Earnings per Common Share.............................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | $ | 0.18                             |   |  | $ | 0.40 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   |                                  |   |  |  |  |  |
| Shares Used in Computing Basic Earnings per      Common Share......................................................                                                                                                                                                                                                                                                                                                                                                                                                                       |  |   | 53,956                           |   |  |  | 53,798 |  |
| Shares Used in Computing Diluted Earnings per      Common Share......................................................                                                                                                                                                                                                                                                                                                                                                                                                                     |  |   | 61,713                           |   |  |  | 61,432 |  |

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

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Table of Contents

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

| **ASSETS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |        |   | **March 31,** |        |   | **December 31,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---|---------------|--------|---|------------------|---|
|                                                                                            |   |   | **2007**      |        |   | **2006**         |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |        |   |               |        |   |                  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |        |   | (Unaudited)   |   |   |                  |   |
| Current Assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |        |   |               |        |   |                  |   |
|      Cash and cash equivalents.......................................                                                                                                                                                                                                                                                                                                                                                                                                                                                               |        | $ | 306,873       |        | $ | 291,633          |   |
|      Restricted cash.......................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                         |        |   | 11,508        |        |   | 11,227           |   |
|      Accounts receivable, net...........................................                                                                                                                                                                                                                                                                                                                                                                                                                                                            |        |   | 11,015        |        |   | 7,603            |   |
|      Spare parts and supplies, net....................................                                                                                                                                                                                                                                                                                                                                                                                                                                                              |        |   | 22,729        |        |   | 23,717           |   |
|      Prepayments and other............................................                                                                                                                                                                                                                                                                                                                                                                                                                                                              |        |   | 13,688        |        |   | 14,614           |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |        |   |               |        |   |                  |   |
|         Total Current Assets.............................................                                                                                                                                                                                                                                                                                                                                                                                                                                            |        |   | 365,813       |        |   | 348,794          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |        |   |               |        |   |                  |   |
| Property and Equipment:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |        |   |               |        |   |                  |   |
|      Owned property and equipment:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |        |   |               |        |   |                  |   |
|         Flight equipment...................................................                                                                                                                                                                                                                                                                                                                                                                                                                                          |        |   | 220,790       |        |   | 213,682          |   |
|         Other...................................................................                                                                                                                                                                                                                                                                                                                                                                                                                                     |        |   | 148,308       |        |   | 143,815          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |        |   |               |        |   |                  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |        |   | 369,098       |        |   | 357,497          |   |
|         Less:  Accumulated depreciation............................                                                                                                                                                                                                                                                                                                                                                                                                                                        |        |   | (118,611      | )      |   | (113,195         | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |        |   |               |        |   |                  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |        |   | 250,487       |        |   | 244,302          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |        |   |               |        |   |                  |   |
|      Capital Leases:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |        |   |               |        |   |                  |   |
|         Ground Service Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |        |   | 4,338         |        |   | 4,338            |   |
|         Less:  Accumulated amortization...........................                                                                                                                                                                                                                                                                                                                                                                                                                                         |        |   | (3,724        | )      |   | (3,557           | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |        |   |               |        |   |                  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |        |   | 614           |        |   | 781              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |        |   |               |        |   |                  |   |
|         Total Property and Equipment................................                                                                                                                                                                                                                                                                                                                                                                                                                                                 |        |   | 251,101       |        |   | 245,083          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |        |   |               |        |   |                  |   |
| Investments in Other Entities.........................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |        |   | 17,916        |        |   | 18,017           |   |
| Reorganization Value In Excess of Amounts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |        |   |               |        |   |                  |   |
|      Allocable to Identifiable Assets, net...........................                                                                                                                                                                                                                                                                                                                                                                                                                                                               |        |   | 12,957        |        |   | 12,986           |   |
| Airport Operating Rights, net..........................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |        |   | 3,628         |        |   | 3,691            |   |
| Debt Issuance Cost, net................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |        |   | 3,447         |        |   | 3,497            |   |
| Other Assets, net.........................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |        |   | 4,329         |        |   | 4,961            |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |        |   |               |        |   |                  |   |
|         Total Assets.........................................................                                                                                                                                                                                                                                                                                                                                                                                                                                        |        | $ | 659,191       |        | $ | 637,029          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |        |   |               |        |   |                  |   |

(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**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   | **March 31,**   |   |        |   | **December 31,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|---|-----------------|---|--------|---|------------------|---|
| **STOCKHOLDERS' EQUITY**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |   | **2007**        |   |        |   | **2006**         |   |
|                                                                                          |  |   | ****            |   |        |   | ****             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |   | **(Unaudited)** |   |        |   |                  |   |
| Current Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |   |                 |   |   |   |                  |   |
|      Current maturities of long-term debt ..........................                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | $ | 2,327           |   |        | $ | 1,668            |   |
|      Current maturities of capital lease obligations.............                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |   | 969             |   |        |   | 821              |   |
|      Accounts payable....................................................                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   | 4,916           |   |        |   | 8,462            |   |
|      Accrued payroll and related costs..............................                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |   | 39,158          |   |        |   | 44,122           |   |
|      Amounts due to Continental Airlines, net....................                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |   | 6,847           |   |        |   | 3,522            |   |
|      Deferred income taxes..............................................                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |   | 2,566           |   |        |   | 14,785           |   |
|      Accrued other liabilities............................................                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   | 70,588          |   |        |   | 61,712           |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |   |                 |   |        |   |                  |   |
|         Total Current Liabilities..........................................                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   | 127,371         |   |        |   | 135,092          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |   |                 |   |        |   |                  |   |
| Long-term Debt.............................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |   | 12,127          |   |        |   | 12,818           |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |   |                 |   |        |   |                  |   |
| 4.25% Senior Convertible Notes due 2023.......................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   | 137,200         |   |        |   | 137,200          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |   |                 |   |        |   |                  |   |
| Capital Lease Obligations..............................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |   | —         |   |        |   | 214              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |   |                 |   |        |   |                  |   |
| Deferred Income Taxes..................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |   | 56,715          |   |        |   | 38,030           |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |   |                 |   |        |   |                  |   |
| Other Long-term Liabilities.............................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |   | 10,558          |   |        |   | 9,361            |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |   |                 |   |        |   |                  |   |
| Stockholders’ Equity:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |   |                 |   |        |   |                  |   |
|      Preferred stock - $.01 par, 10,000,000 shares         authorized, no shares issued and outstanding,         respectively..........................................................                                                                                                                                                                                                                                                 |  |   | —         |   |        |   | —          |   |
|      Common stock - $.01 par, 200,000,000 shares         authorized, and 54,653,942 and 54,653,942         shares issued, respectively....................................                                                                                                                                                                                                                                                              |  |   | 547             |   |        |   | 547              |   |
|      Additional paid-in capital...........................................                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   | 166,060         |   |        |   | 165,658          |   |
|      Accumulated earnings..............................................                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |   | 152,452         |   |        |   | 142,349          |   |
|      Accumulated other comprehensive income.................                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |   | 364             |   |        |   | 364              |   |
|      Common stock held in treasury, at cost        444,789 and 487,261 shares, respectively................                                                                                                                                                                                                                                                                                                                                                                          |  |   | (4,203          | ) |        |   | (4,604           | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |   |                 |   |        |   |                  |   |
|         Total Stockholders’ Equity.....................................                                                                                                                                                                                                                                                                                                                                                                                                                            |  |   | 315,220         |   |        |   | 304,314          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |   |                 |   |        |   |                  |   |
|         Total Liabilities and Stockholders’ Equity................                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | $ | 659,191         |   |        | $ | 637,029          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |   |                 |   |        |   |                  |   |

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

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |   | **Three Months Ended March 31,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|---|----------------------------------|---|
|                                                                                                           |  |   | ****                             |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |   | **2007**                         |   | **  ** |  | **2006** |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |                                  |   |  |  |  |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |   |                                  |   |  |  |  |  |
| Net Cash Flows provided by Operating Activities............................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | $ | 26,962                           |   |  | $ | 33,418 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |                                  |   |  |  |  |  |
| Cash Flows from Investing Activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |   |                                  |   |  |  |  |  |
|      Capital expenditures...............................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |   | (11,669                          | ) |  |  | (6,293 | ) |
|      Investments in other entities....................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |   | —                          |   |  |  | (4,490 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |   |                                  |   |  |  |  |  |
|         Net cash used in investing activities......................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |   | (11,669                          | ) |  |  | (10,783 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |   |                                  |   |  |  |  |  |
| Cash Flows from Financing Activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |   |                                  |   |  |  |  |  |
|      Payment on note payable to Continental Airlines.......................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   | —                          |   |  |  | (17,545 | ) |
|      Payments on long-term debt and capital lease obligations..........                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |   | (98                              | ) |  |  | (353 | ) |
|      Proceeds from issuance of common stock related to         Employee Stock Purchase Plan...........................................                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |   | 45                               |   |  |  | 275 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |                                  |   |  |  |  |  |
|         Net cash used in financing activities......................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |   | (53                              | ) |  |  | (17,623 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |                                  |   |  |  |  |  |
| Net Increase in Cash and Cash Equivalents...................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |   | 15,240                           |   |  |  | 5,012 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |   |                                  |   |  |  |  |  |
| Cash and Cash Equivalents – Beginning of Period..........................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |   | 291,633                          |   |  |  | 227,285 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |   |                                  |   |  |  |  |  |
| Cash and Cash Equivalents – End of Period...................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | $ | 306,873                          |   |  | $ | 232,297 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |                                  |   |  |  |  |  |
| Supplemental Cash Flow Information:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |   |                                  |   |  |  |  |  |
|      Interest paid...........................................................................                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | $ | 2,921                            |   |  | $ | 4,062 |  |
|      Income taxes paid (including payments under our          tax agreement with Continental Airlines)...............................                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | $ | 2,407                            |   |  | $ | 4,297 |  |

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 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

            ExpressJet Holdings, Inc. (“Holdings”) hasstrategic investments in the air transportation industry.  Our principal asset is all of the issued and outstanding shares ofstock of XJT Holdings, Inc., the sole stockholder of ExpressJet Airlines, Inc. (“Airlines”) (Holdings and Airlines aretogether referred to as  “ExpressJet,” “we,” “us” and “our”).  Airlinesis one of the largest regional airlines in the world, based on available seat miles, number of regional jets in its fleet andnumber of passengers flown.  We also invest in other entities that permit us to leverage the management experience,efficiencies and economies of scale present in our subsidiaries. 

            Airlines currently operates a fleet of 274 aircraft.  InDecember 2006, Continental Airlines began releasing 69 aircraft (25% of our fleet) from our capacity purchase agreement (the“Continental CPA”), under which we operate as Continental Express.  During 2007, we are redeploying the 69aircraft in our branded flying, charter service and on behalf of Delta Air Lines (“Delta”) as Delta Connection aircraftpursuant to a capacity purchase agreement (the “Delta CPA”).  We will continue to operate the remaining 205aircraft under the Continental CPA.  As of March 31, 2007, 36 aircraft had been transitioned away from the Continental CPA. Asof March 31, 2007, seven aircraft were in paint, maintenance and modification lines and were not in service; four aircraft wereflying for JetBlue Airlines under a short-term arrangement; nine aircraft were ready to launch in branded service on April 2, 2007and the remaining aircraft were being flown under dedicated charter contracts or marketed for ad-hoc charters.  The remainderof the 69 aircraft will be redeployed in the second and third quarters of 2007. Although we believe that these new operations willenhance stockholder value in the long term, we are incurring significant start-up costs during the transition period, which willsignificantly reduce our overall profitability for 2007.  In addition, branded flying and charter service are likely toproduce more volatile financial results in the near term than our historical operations, primarily due to changes in the price offuel and fluctuations in passenger demand and fare levels.  As we transition part of our operations to branded and charterflying, our results may reflect the cyclical nature of the airlines industry to a greater degree than they havehistorically. 

            The accompanying interim condensed consolidated financialstatements have been prepared in conformity with U.S. generally accepted accounting principles and are consistent in all materialrespects with those applied in our annual report on Form 10-K for the year ended December 31, 2006 (the “200610-K”).  The preparation of these financial statements requires us to make estimates and judgments that affect theamounts reported in the financial statements and the related disclosures.  The actual results may differ from ourestimates.  Please see our 2006 10-K for a detailed description of our critical accounting estimates.  The SEC hasdefined critical accounting estimates as those that are most important to the portrayal of a company's financial condition andresults of operations and require the company to make its most difficult and subjective judgments, often as a result of the need tomake estimates of matters that are inherently uncertain.

            The interim financial information is unaudited, but reflectsall adjustments necessary, in our opinion, to provide a fair presentation of our financial results for the interim periodspresented.  These adjustments are of a normal, recurring nature.  In addition, all intercompany transactions have beeneliminated in consolidation.  Certain amounts reported in previous periods have been reclassified to conform to the currentpresentation.  These interim consolidated condensed financial statements should be read in conjunction with the financialstatements and the notes thereto contained in our 2006 10-K.

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****

**Note 1 *–* Principles of Consolidation**

            The accompanying condensed consolidated financial statementsinclude the accounts of ExpressJet Holdings, Inc. and its subsidiaries. 

            The impact of the new operations, as we transition our fleetfrom the Continental CPA to other contract flying, branded flying and charters, was not individually material during the quarterended March 31, 2007.  However, we are incurring significant transition-related costs which approximated $13.0 million duringthe first quarter ended March 31, 2007.  We continue to evaluate the impact of this new flying, during our transition period,on our reporting under SFAS 131 “Disclosures about Segments of an Enterprise and Related Information” and expect tocomplete such analysis during the second quarter of 2007 once these operations are all in service and we can better evaluate howthe long-term economics and risks match with those of our current flying.

**Note 2 *–* Capacity Purchase Agreements**

**            Continental CPA. ** The Continental CPA is designedto provide Airlines with a 10% operating margin, subject to certain adjustments, in its Continental Express operations.  Inaddition to the 10% prevailing margin, Airlines is entitled to receive incentive payments from Continental if its controllablecompletions are higher than its historical benchmark and is required to pay Continental a penalty for controllable completionfactors below 99.5%.  Airlines also receives a small per-passenger fee and incentive payments for certain on-time departuresand baggage handling performance.  

            We began 2007 rate discussions with Continental in September2006.  Although the Continental CPA contemplates a November 1 deadline for setting the rates, we agreed to extend thedeadline.  However, in January, the parties submitted their disagreements regarding 2007 rates to binding arbitration inaccordance with the terms of the Continental CPA.  In accordance with that agreement, the three person arbitrator panel hasbeen selected, and the arbitration hearing is scheduled to be held June 25-29, 2007.  A final decision is expectedapproximately 20 days after the hearing is completed.  We will continue to record our operating revenue based on ourinterpretation of the Continental CPA; for the first quarter, we recorded our Continental CPA revenue at the 2006 block hour ratesas mutually agreed while in arbitration.  In addition, we are being paid by Continental under the 2006 block hour rates duringthe arbitration process.

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            The table below describes how variations betweenAirlines’ actual costs and the estimated costs reflected in the block hour rates are treated under the Continental CPA.

| **Fully reconciled costs:** reconciliation payment, including 10% margin, to the full extent actual costs differ fromestimated costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  • Fuel and into-plane expenses(1)  • Aircraft rent  • Terminal facility rent  • On-time bonuses and 401(k) company    match under current plans  • Taxes (other than income taxes)  • Passenger liability insurance  • Hull insurance  • War risk insurance  • Landing fees  • Ground handling services                                                                                                                                                   |  • Administrative services provided by    Continental  • Third-party security and screening    expenses  • Substantially all regional jet engine    expenses under current long-term    third-party contracts  • Depreciation and amortization(2)  • Glycol, de-icing, snow removal  • International navigational fees |
| **Costs within the margin band:** if actual expenses in this category are sufficiently different from estimates used in theblock hour rates so that the prevailing margin is less than 8.5% or greater than 10%, then a reconciliation payment will be made byeither Continental or Airlines to the other so that this prevailing margin will be 8.5% or 10%, as applicable.  If theprevailing margin is less than 8.5% due to the impact of certain costs, as described below, or if the prevailing margin is above10% due to other items(3), no reconciliation payments would be made by either Continental or Airlines. |
|  • Maintenance, materials and repairs not    included above  • Passenger services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  • Other rental expenses  • Other operating expenses |

|        | (1)  | Fuel and fuel tax expense are reconciled to the lower of the actual costs or the agreed-upon caps of 66.0 cents per gallon and5.2 cents per gallon, respectively, based on Airlines’ fuel purchase agreement with Continental.                                                                                                                                                                                                               |
|--------------------------------------|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                      | (2)  | Depreciation is reconciled for assets and capital projects accounted for in the Continental CPA or those approved by Continentaloutside of the agreement.                                                                                                                                                                                                                                                                                               |
|                                      | (3)  | The prevailing margin used to calculate the reconciliation payment does not take into account performance incentive payments,including payments from controllable cancellation performance, litigation costs above a historical benchmark or other costs thatare not included in the block hour rates (or covered by adjustments to them) and are not reasonable and customary in the industryor were not otherwise approved in advance by Continental. |

            Some costs that were unreconciled under the capacity purchaseagreement prior to 2005 now require Airlines to make a reconciliation payment to Continental if the differences cause theprevailing margin to be greater than 10%.  However, if the differences cause the prevailing margin to be less than 8.5%, theyremain unreconciled.  These costs are:

|        | •  | wages and salaries; and                   |
|--------------------------------------|--------------|-------------------------------------------|
|                                      | •  | benefits not included in the table above. |

            For a detailed description of the terms of the ContinentalCPA, please see Item 1. “Business — Capacity Purchase and Other Agreements with Continental Airlines” in our2006  10-K.

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****

**            Delta CPA. ** On March 1, 2007, we signed atwo-year capacity purchase agreement, with up to two one-year extension options with Delta Air Lines, Inc.  The Delta CPA willcover 10 ERJ-145XR aircraft scheduled to be placed into service during June 2007.  Delta will be responsible for scheduling,marketing, pricing and revenue management on the aircraft and will collect all passenger revenues.  Airlines will operate,maintain and finance the aircraft.

            Airlines will receive a base rate for each completed blockhour and departure and be reimbursed for certain pass-through costs.  Airlines will have the ability to earn incentives forexceeding completion benchmarks and maintaining high Department of Transportation rankings for arrivals within 14 minutes and otheraspects of customer satisfaction.

**Note 3 *–*****Investments in Other Entities**

            Investments in unconsolidated companies are accounted for bythe equity method of accounting when we have significant influence over the operation of the companies as prescribed by AccountingPrinciples Board Opinion No. 18 – “The Equity Method of Accounting for Investments in Common Stock” (“ABP18”).  The following table details our current non-controlling interests that are accounted for under the equity methodof accounting:

| **Company**                       |        |        | **Carrying Amount of Investment at March 31, 2007 (in millions)**                                    |
|-----------------------------------|--------|--------|------------------------------------------------------------------------------------------------------|
|                                   |   |   |                                                                                                      |
| Wing Holdings, LLC                |        |        |                14.7            |
| Flight Services and Systems, Inc. |        |        |                  3.2 |

            We purchased a 49% interest in Wing Holdings, LLC for $16.0million in June 2005.  The carrying amount of our investment exceeded the amount of the company’s underlying equity byapproximately $8.5 million at the time of our investment.  We evaluated the net book value of the company’s fixed assetsas of June 30, 2005 and identified approximately a $1.9 million difference between net book value and fair value.  Themajority of the difference is being amortized over the remaining average life of the assets identified.  As of March 31, 2007,the balance of the fair value difference, net of amortization, was approximately $0.8 million.  The remaining $6.6 million ofour difference in the underlying investment is considered goodwill and thus is not amortized.

            In January 2006, we purchased a 44% interest in FlightServices and Systems, Inc. for $3 million.  At the same time, we loaned the company $1 million which is classified in OtherAssets, net, on the consolidated balance sheets.  The note is due and payable in full on September 30, 2007 with interest dueand payable quarterly on the 15th day following the close of each calendar quarter.  The loan interest rate is equal to thelesser of 7% per annum or the three-month LIBOR plus 150 basis points.  We have received interest payments pursuant to theterms of the agreement including the first quarter 2007 interest payment that was due April 15, 2007 and expect to receive ourprincipal payment in September 2007.  

            Our proportionate shares of the results of operations fromthese entities are included in the line “Equity investment loss” on our consolidated statements of operations. Although no impairment losses on the investments have been recognized, an impairment loss will be recorded whenever a decline invalue of an equity investment below its carrying amount is determined to be other than temporary.  In evaluating “otherthan temporary,” we consider the length of time and extent to which the fair value of the investment has been less than thecarrying amount of the equity investment, the near and longer-term operating and financial prospects of the entity and ourlonger-term intention of retaining our investment in the entity.

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**Note 4 *–* Earnings Per Share**

            The following table sets forth the computation of basic anddiluted earnings per share for the three months ended March 31, 2007 and 2006 (in thousands):

|                                                                     |        |   | **Three Months Ended March 31,** |        |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---|----------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                    |        |   |                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |        |   | ****                             |        |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |        |   | **2007**                         |        |  | **2006** |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |        |   | ****                             |        |  | **** | ** ** |
| Numerator for basic earnings per share – net      income.......................................................                                                                                                                                                                                                                                                                     |   | $ | 10,167                           |   | $ | 23,754 |  |
| Income impact of assumed conversion of      convertible debt..........................................                                                                                                                                                                                                                                                                                    |        |   | 915                              |        |  | 915 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |        |   |                                  |        |  |  |  |
| Numerator for diluted earnings per share –      adjusted......................................................                                                                                                                                                                                                                                                                      |        | $ | 11,082                           |        | $ | 24,669 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |        |   |                                  |        |  |  |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |        |   |                                  |        |  |  |  |
| Denominator for basic earnings per share –      weighted average shares...........................                                                                                                                                                                                                                                                                                  |        |   | 53,956                           |        |  | 53,798 |  |
| Restricted stock and Stock Options...............                                                                                                                                                                                                                                                                                                                                                                  |        |   | 219                              |        |  | 96 |  |
| Assumed conversion of convertible debt........                                                                                                                                                                                                                                                                                                                                                                     |        |   | 7,538                            |        |  | 7,538 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |        |   |                                  |        |  |  |  |
| Denominator for diluted earnings per share –      adjusted and assumed conversions..........                                                                                                                                                                                                                                                                                        |        |   | 61,713                           |        |  | 61,432 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |        |   |                                  |        |  |  |  |

            We excluded 249,509 ****and 300,877 shares of restrictedstock from the weighted average shares used in computing basic earnings per share for the three months ended March 31, 2007 and2006, as these shares were not vested as of the end of the respective period.

            Weighted average common shares outstanding for dilutedearnings per share calculation include the incremental effect of shares issuable upon the exercise of stock options and ofrestricted stock not yet vested.  We excluded the following common stock equivalents from our diluted earnings per sharecalculations, because their inclusion would have been anti-dilutive:

|        | •  | options to purchase 2.1 million shares of our common stock for the three months ended March 31, 2007, and 1.9 million shares forthe three months ended March 31, 2006.  These options' exercise prices were greater than the average market price of thecommon shares for the respective periods; and |
|--------------------------------------|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                      | •  | 0.2 million shares of restricted stock for the three months ended March 31, 2006.                                                                                                                                                                                                                          |

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****

**Note 6 – Long-Term Debt**

****

**           ** As of March 31, 2007, long-term debt, includingcurrent maturities, totaled $14.5 million, which consisted of secured debt owed to Export Development Canada(“EDC”). 

            EDC loaned us $10.7 million in May 2003 and $6.6 million inSeptember 2003.  The loans are secured by certain of our flight simulators, flight data software and other equipment relatedto the simulators.  We used all the proceeds from the loans to reduce the principal under our note payable toContinental.  The amount due to EDC accrues interest at the six-month LIBOR plus 1.75% per annum.  The term of eachadvance to us is 96 months.  The loan agreement has customary representations, warranties and covenants.  Additionally,Continental is the guarantor of this loan, and a default under the guarantee would cause an acceleration of the loan. 

            During 2003, Holdings completed the private placement of$137.2 million senior convertible notes due 2023.  Cash interest is payable on the notes at a rate of 4.25% per year on theprincipal amount at maturity payable semiannually in arrears on February 1 and August 1 of each year.   As of March 31, 2007and December 31, 2006, we estimated the fair value of our $137.2 million (carrying value) fixed-rate debt to be $128.2 million and$127.9 million, respectively, based upon quoted market prices. 

****

            Repayment of the convertible notes is jointly and severallyguaranteed on an unconditional basis by Airlines.  Except as otherwise specified in the indenture pursuant to which the noteswere issued, there are no restrictions on Airlines’ ability to transfer funds to Holdings in the form of cash dividends,loans or advances.  General provisions of applicable state law, however, may limit the ability of any subsidiary to paydividends or make distributions to its parent in certain circumstances.

            Condensed consolidating financial information of Holdings,its guarantor subsidiary, Airlines, and other non-guarantor subsidiaries of Airlines are not included herein because the disclosurewould substantially duplicates the disclosure contained in the latest audited financial statements contained in the 2006 10-K.Airlines’ balance sheet, results of operations and cash flows are substantially equivalent to those of Holdings on aconsolidated basis.  We do not believe that condensed consolidated financial information concerning Airlines would be materialto investors.

**Note 7 – Income Taxes **

            In conjunction with our initial public offering in April2002, the tax basis of our tangible and intangible assets was adjusted to fair value.  This adjustment to tax basis shouldresult in additional tax deductions being available to us through 2017.  In accordance with our tax agreement withContinental, to the extent we generate taxable income sufficient to realize the additional tax deductions, we are required to payContinental a percentage of the amount of tax savings actually realized, excluding the effect of any loss carrybacks.  We arerequired to pay Continental 100% of the first third of the anticipated tax benefit, 90% of the second third and 80% of the lastthird.  However, if these tax benefits are not realized by the end of 2018, we will be obligated to pay Continental 100% ofthese benefits realized after that date.  Since these payments are solely dependent on our ability to generate sufficienttaxable income to realize these deferred tax assets, they are recorded as an obligation to Continental within the deferred taxasset accounts, and the portion we may retain in the future is offset by a valuation allowance.  At the time of the initialpublic offering, the valuation allowance and the obligation to Continental offset the step-up in basis of assets in our long-termdeferred tax asset account.  During the three months ended March 31, 2006 Continental made net payments to us under the taxagreement related to the additional tax deductions of approximately $1.8 million.  No tax payments under the tax agreementrelated to the additional tax deductions were made by either Continental or us during the three months ended March 31, 2007.

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            Our tax agreement increases our dependence onContinental’s financial condition.  If it were determined that any of the tax benefits related to the basis increaseshould not have been available at the time of utilization and, as a result, we are required to pay additional taxes, interest andpenalties, then we could be adversely affected if Continental were unable or unwilling to perform their indemnification under theagreement.

            Effective January 1, 2007, we adopted the provisions ofFinancial Accounting Standards Board issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, aninterpretation of FASB Statement No. 109” (“FIN 48”), which clarifies the accounting for uncertainty in incometaxes recognized in financial statements if a position is more likely than not of being sustained by a taxing authority.  Asof March 31, 2007, there were no material unrecognized tax benefits or associated accrued interest and penalties under FIN48.  The calendar tax years 2003 through 2006 remain subject to examination by the Internal Revenue Service.

**Note 8 – Commitments and Contingencies**

***Purchase Commitments and Contingencies***

******

            As shown in the following table, our fleet consisted of 274regional jets at March 31, 2007.  We had no aircraft purchase commitments (firm orders), but did have options to purchase 100ERJ-145XR aircraft or other types of aircraft within the ERJ-145 family.

| **Type**                                                                                                                                                                                                                                         |              | **Total Leased Aircraft** |              | **Seats in Standard Configuration** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|---------------------------|--------------|-------------------------------------|
|                                                                                                                                                                                                                                                  |              |                           |    |                                     |
|                                          |    |                           |              |                                     |
|   ERJ-145XR..................                                                                                                                                                                                                          |              | 104                       |              | 50                                  |
|   ERJ-145......................                                                                                                                                                                                                        |              | 140                       |              | 50                                  |
|   ERJ-135......................                                                                                                                                                                                                        |              | 30                        |              | 37                                  |
|                                                                                                                                                                                                                                                  |              |                           |              |                                     |
|     Total.........................                                                                                                                                                                                           |              | 274                       |              |                                     |
|                                                                                                                                                                                                                                                  |              |                           |              |                                     |

***Collective Bargaining Agreements***

            As of March 31, 2007, approximately 70% of our employees arecovered by collective bargaining agreements.  Our contracts with our pilots, dispatchers, flight attendants, and mechanicswill be amendable in December 2010, July 2009, August 2010 and August 2009, respectively.  Our other employees are not coveredby collective bargaining agreements. 

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***General Guarantees and Indemnifications***

            We are party to many contracts in which we agree to indemnifythird parties for tort liabilities that arise out of or relate to the subject matter of the contract.  In some cases, thisindemnity extends to related liabilities arising from the negligence of the indemnified parties, but typically excludes liabilitiescaused by gross negligence or willful misconduct.  We cannot estimate the potential amount of future payments under theseindemnities until events arise that would trigger a liability under the indemnities.  However, we expect to be covered byinsurance for a material portion of these liabilities, subject to deductibles, policy terms and other conditions.

***Aircraft Fuel***

            Flying operations, outside of the Continental CPA, can besignificantly impacted by changes in the price and availability of aircraft fuel.  Except for our branded flying, we canminimize our exposure to fuel price volatility through contractual arrangements, similar to the fuel purchase agreement withContinental.  For our branded flying, efforts to reduce our exposure to increases in the price and availability of aviationfuel include the utilization of fuel purchase contracts involving fixed-price contracts.  Fixed-price arrangements consist ofan agreement to purchase defined quantities of aviation fuel from a third party at a stated price, limiting our exposure to marketvolatility.  As of March 31, 2007, we had committed to purchase 6.8 million gallons, or 66 percent of our anticipated brandedflying fuel needs, at a weighted average price per gallon, excluding taxes and into-plane fees, of $2.11 for the second quarter of2007.  Additionally, we have committed to purchase 13.0 million gallons for the second half of 2007 and 6.8 million gallonsfor the first six months of 2008.  This represents approximately 40 percent and 21 percent of our anticipated branded flyingfuel needs for the second half of 2007 and first half of 2008, respectively. 

**Note 9 – Subsequent Events**

****

**           ** We are currently in the process of negotiating adefinitive agreement pursuant to which we will operate an additional eight aircraft on behalf of Delta beginning July 1, 2007 undera pro-rate arrangement.  Under this arrangement, we will be responsible local market pricing and revenue management, and theoperation and maintenance of the aircraft and will share responsibility for the schedule and marketing with Delta.  We expectto earn a pro-rated portion of the fare plus an incentive for passengers connecting onto Delta’s network.

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

            The following discussion and analysis contain a number offorward-looking statements, all of which are based on current expectations and could involve a number of risks anduncertainties.  Specifically, statements regarding our future results of operations, operating costs, business prospects,growth and capital expenditures, including plans with respect to our fleet, are forward-looking statements.  These statementsreflect our plans and assumptions about future events and are subject to uncertainties, many of which are outside ourcontrol.  Important factors that could cause actual results to differ materially from the expectations expressed or implied inthe forward-looking statements include known and unknown risks.  Some of the known risks that could significantly impact ourrevenues, operating results, and capacity include, but are not limited to:  

|        | •  | our dependence on the financial and operational stability of Continental;                                                                                                                      |
|--------------------------------------|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                      | •  | the possibility that the Continental CPA can still be terminated with 12 months notice;                                                                                                        |
|                                      | •  | the possibility that we may lose access to our aircraft, facilities and regulatory authorizations, as well as anyairport-related and other services that Continental currently provides to us; |
|                                      | •  | the possibility that our new operations may be less profitable than our historical results;                                                                                                    |
|                                      | •  | the possibility that competitive responses to our branded entry into new markets could make our service less profitable;                                                                       |
|                                      | •  | the possibility that we may be unable to obtain all of the aircraft, parts or related support services we expect from Embraer tooperate our aircraft;                                          |
|                                      | •  | the likely increase in maintenance costs as the average age of our fleet increases;                                                                                                            |
|                                      | •  | our cost structure may not be competitive with some low-cost carriers and other regional carriers;                                                                                             |
|                                      | •  | extensive government regulation of our business and additional costs to comply with such regulations;                                                                                          |
|                                      | •  | other adverse factors beyond our control, including weather conditions and the availability and cost of fuel;                                                                                  |
|                                      | •  | our reliance on technology could be harmful in the event of system failure: and                                                                                                                |
|                                      | •  | any adverse effects on our operations and financial condition from an aviation accident.                                                                                                       |

For further discussion of these risks, please see the “Risk Factors” section in our 2006 10-K.  The statementsin this report are made as of May 9, 2007, and the events described in the forward-looking statements might not occur or mightoccur to a materially different extent than described in this report.  We undertake no duty to update or revise any of ourforward-looking statements, whether as a result of new information, future events or otherwise.

            Our website address is *www.expressjet.com*.  Allour SEC filings, together with exhibits, are available free of charge through our website as soon as reasonably practicable afterwe file them with, or furnish them to, the SEC.

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**2007 Outlook**

            ***Operational Review.***  During the threemonths ended March 31, 2007, Airlines operated at a 99.9% controllable completion factor, which excludes cancellations due toweather and air traffic control, and an overall completion factor of 96.8%.  In December 2006, Continental began releasing 69aircraft (25% of our fleet) from the Continental CPA.  As of March 31, 2007, 36 aircraft had been transitioned away from theContinental Express operations. Seven aircraft were in paint, maintenance and modification lines and were not in service; fouraircraft were flying for JetBlue Airlines under a short-term arrangement; nine aircraft were ready to launch in branded service onApril 2, 2007 and the remaining aircraft were being flown under dedicated charter contracts or marketed for ad-hoc charters. The remainder of the aircraft will be redeployed in the second and third quarters of 2007.  Our current plan for aircraftallocation follows:

|                                                                                          | **Aircraft Allocation**                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                            |
| Continental Express                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                  205                       |
| Branded Flying                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                    42            |
| Corporate Aviation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                      9 |
| Delta Connection                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                    10            |
| Delta Pro-rate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                      8 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                            |
| **Total Aircraft**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | **                 274**                   |

            Although we believe that these new operations will enhancestockholder value in the long term, significant start-up costs are being incurred throughout the transition period, which willsignificantly reduce our overall profitability for 2007.  In addition, branded flying and charter service are likely toproduce more volatile financial results in the near term than our historical operations, primarily due to changes in the price offuel and fluctuations in passenger demand and fare levels.  As we transition part of our operations to branded and charterflying, our results may reflect the cyclical nature of the airlines industry to a greater degree than they have historically.

***            Continental CPA.**** * We began 2007rate discussions with Continental in September 2006.  Although the Continental CPA contemplates a November 1 deadline forsetting the rates, we agreed to extend the deadline.  However, in January, the parties submitted their disagreements regarding2007 rates to binding arbitration in accordance with the terms of the Continental CPA.  In accordance with that agreement, thethree-person arbitrator panel has been selected and the arbitration hearing will begin on June 25, 2007.  A final decision isexpected to be reached approximately 20 days after the hearing is completed.  Airlines will continue to be paid under the 2006block hour rates during the arbitration process.

***            Branded Flying.***  With our branded flying,we focus on opportunities to introduce non-stop routes to growing cities, convenient, medium-size airports and robust businesstravel markets with limited frequency and competition on non-stop routes.  We offer our customers important time savings,competitive pricing and comfort.  During the first quarter 2007, we launched our frequent flyer program,JetSet®.  It is a simple fly-and-redeem travel program.  On April 2, we began service in our brandedflying, which is scheduled to grow to 24 cities and over 225 daily departures by the end of the second quarter.  

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***            Corporate Aviation. *** Our CorporateAviation division is expected to operate a total of 9 aircraft by the third quarter 2007, providing distinctive travel solutionsfor corporations, aircraft brokers, hospitality companies, sports teams, schools and others.  The aircraft are configured with50 redesigned seats for enhanced passenger comfort, and each seat includes complimentary XM Satellite radio with over 100 channelsof audio entertainment.  In addition to the basic service, customized flight service options give customers an opportunity tocreate a unique flight experience. 

            During March 2007 and continuing through April 2007, weprovided service with up to four aircraft to JetBlue Airlines in Boston, Massachusetts; New York City; Washington D.C.; Columbus,Ohio; Buffalo, New York and Richmond, Virginia.  This service was provided under a short-term agreement covering aircraft,crews, maintenance and insurance.

            ***Delta CPA and Pro-rate Arrangement***.  OnMarch 1, 2007, Airlines signed a two-year capacity purchase agreement, with up to two one-year extension options, with Delta AirLines, Inc.  The agreement covers 10 ERJ-145XR aircraft scheduled to be placed into service during June 2007.  Delta willbe responsible for scheduling, marketing, pricing and revenue management on the aircraft and will collect all passenger revenues.Airlines will operate, maintain and finance the aircraft.

            Airlines will receive a base rate for each completed blockhour and departure and be reimbursed for certain pass-through costs.  Airlines will have the ability to earn incentives forexceeding completion benchmarks and maintaining high Department of Transportation rankings for arrivals within 14 minutes andcustomer satisfaction.

            We are currently in the process of negotiating a definitiveagreement pursuant to which we will operate an additional eight aircraft on behalf of Delta beginning July 1, 2007 under a pro-ratearrangement.  Under this arrangement, we will be responsible for local market pricing and revenue management, and theoperation and maintenance of the aircraft and will share responsibility for the schedule and marketing with Delta.  We expectto earn a pro-rated portion of the fare plus an incentive for passengers connecting on to Delta's network.

            **Our Liquidity**.  As of March 31, 2007, we had$306.9 million in cash and cash equivalents, excluding $11.5 million in restricted cash, which is used as collateral for ourworkers’ compensation coverage, letters of credit and charter deposits.  Our cash flows from operations were sufficientto cover our capital resource and liquidity requirements. 

            **Relationship with Continental.**  AlthoughContinental no longer holds any shares of our common stock, our relationship with Continental remains important to our success as75% of our fleet is engaged in support of Continental’s network, operating as Continental Express.  We believe theservice we provide Continental has been effective in helping Continental to fully develop its route network and gaining recognitionas a premier service provider.  We provide Continental seamless service to more than 150 markets in the U.S., Canada, andMexico.  We believe that our relationship will emerge even stronger following the conclusion of the arbitration regarding our2007 rates under the Continental CPA.

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            **Labor.**  As of March 31, 2007, approximately 70%of our employees were covered by collective bargaining agreements.  The contracts with the pilots, dispatchers, flightattendants and mechanics will become amendable in December 2010, July 2009, August 2010 and August 2009,respectively.  

**RESULTS OF OPERATIONS**

            The following discussion provides an analysis of our resultsof operations and reasons for material changes therein for the three months ended March 31, 2007, compared to the correspondingperiod ended March 31, 2006.

***Comparison of Three Months Ended March 31, 2007 to Three Months Ended March 31, 2006***

******

***General***

******

            As we continue to diversify our network, we evaluate eachopportunity on an income per aircraft basis.  This metric allows us to compare each agreement using a consistent performancemeasure.  Our strategy is to transition the 69 aircraft withdrawn from the Continental CPA to other flying designed to replacethe income per aircraft earned under that agreement.  

            During the first quarter of 2007, we generated the majorityof our revenue under the Continental CPA.  We began 2007 rate discussions with Continental in September 2006.  In January2007, the parties submitted their disagreements regarding 2007 rates to binding arbitration in accordance with the terms of theContinental CPA.  We were paid under the 2006 block hour rates during the first quarter of 2007 and will be paid under the2006 block hour rates during the remainder of the arbitration process.  However, we expect the 2007 rates to be retroactivelyapplied to January 1, 2007, at the conclusion of the arbitration.

            Our first quarter 2007 operating income reflected a 3.5%operating margin, as compared with an operating margin of 9.2% for the first quarter 2006.  Three main factors contributed tothe decreased year-over-year operating margin:  we continued to be paid under the 2006 rate structure while in arbitration;however, we are incurring costs at 2007 rates; higher than expected pilot training costs that are not reimbursable underContinental CPA; and expenses associated with our transition of 36 aircraft from the Continental CPA.  Due to our paymentsfrom the Continental CPA being calculated under the 2006 rate structure, we also earned less than the contractual 10% operatingmargin for the first quarter 2007.

***Operating Expenses***

            For the three months ended March 31, 2007, wages, salariesand related costs increased by $12.5 million, or 13.5%, ****as compared to the same period in 2006.  The increaserepresents growth in our work force to support changes in our flight operations and increases in wage rates under some ofAirlines’ collective bargaining agreements.  The availability of certified pilot trainers has not been sufficient tomeet our current training timeline, which has resulted in additional time and expense for pilot trainees to become certified. In conjunction with the increases in base wages, we incurred approximately $3.1 million higher employee benefit costs, such asmedical coverage, workers’ compensation costs, and 401(k) expenses. 

            The increase of $2.7 million in outside services during thethree months ended March 31, 2007 compared to the same period in 2006 is due mainly to expenses incurred to support our brandedflying.  Additionally, there was an increase in deicing services for the higher count in inclement weather events in the firstquarter of 2007 compared to 2006.

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            For the three months ended March 31, 2007, other operatingexpenses increased by $5.7 million as compared to the same period in 2006.  This increase is primarily caused by marketing,distribution and catering related expenses incurred to support our branded flying.  Additionally, crew related charges, suchas per diem, hotel cost and relocation expenses, increased as a result of higher rates and increased flight operations.

***Certain Statistical Information***

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

|                                                         |        | **Three Months Ended March 31,** |   |        |             |   |
|---------------------------------------------------------|--------|----------------------------------|---|--------|-------------|---|
|                                                         |        | ****                             |   |        |             |   |
|                                                         |        | **2007**                         |   |        | **2006**    |   | **Increase/ (Decrease)** |  |
|                                                         |        |                                  |   |        |             |   |  |  |  |
| Revenue passenger miles (millions)(1).......            |        | 2,267                            |   |        | 2,318       |   | (2.2 | )% |  |
| Available seat miles (millions)(2)................      |   | 3,017                            |   |   | 3,082       |   | (2.1 | )% |  |
| Passenger load factor(3)...........................     |        | 75.1                             | % |        | 75.2        | % | (0.1 | )pts |   |
| Block hours(4)......................................... |        | 213,731                          |   |        | 214,192     |   | (0.2 | )% |  |
| Departures............................................. |        | 115,259                          |   |        | 115,093     |   | 0.1 | % |  |
| Operating cost per ASM (cents)(5)............           |        | 13.18                            |   |        | 11.88       |   | 10.9 | % |  |
| Operating cost per block hour (dollars)(6)...           |        | 1,861                            |   |        | 1,709       |   | 8.9 | % |  |
| Average fuel cost per ASM (cents)(7).........           |        | 1.78                             |   |        | 1.72        |   | 3.5 | % |  |
| Fuel gallons consumed (millions).............           |        | 73.7                             |   |        | 74.4        |   | (0.9 | )% |  |
| Average length of aircraft flight (miles).......        |        | 537                              |   |        | 548         |   | (2.0 | )% |  |
| Actual aircraft in fleet at end of period.......        |        | 274                              |   |        | 270         |   | 1.5 | % |  |
| Average daily utilization of each aircraft(8)..         |        | 8 hr 42 min                      |   |        | 8 hr 53 min |   | (2.1 | )% |  |
| Controllable completion factor(9)................       |        | 99.9                             | % |        | 99.8        | % | 0.1 | pts |  |
| Completion factor....................................   |        | 96.8                             | % |        | 98.2        | % | (1.4 | )pts |  |

|        |  (1) | Revenue passenger miles is the number of scheduled miles flown by revenue passengers.                                                                                               |
|--------------------------------------|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                      |  (2) | Available seat miles represent the number of seats available for passengers multiplied by the number of 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) | Operating cost per available seat mile is operating costs, including transition costs associated with our redeployment of the 69aircraft, divided by available seat miles.     |
|                                      |  (6) | Operating cost per block hour is operating costs, including transition costs associated with our redeployment of the 69aircraft, divided by block hours.                            |
|                                      |  (7) | Fuel cost used in the calculations includes cost of fuel and related fl tax.                                                                                                   |
|                                      |  (8) | 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).       |
|                                      |  (9) | Controllable completion factor is the actual number of completed flights, plus flights cancelled due to weather and air trafficcontrol, divided by the number of scheduled flights. |

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***Future Costs*******

            We remain committed to providing competitively pricedservices by controlling our costs; however, we believe that our costs have increased in some cases and are likely to increaseoverall in the future due to:

|                                            | •  | transition costs associated with refurbishing and repainting the aircraft after exiting service under the Continental CPA;                                                                   |
|--------------------------------------------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                            | •  | relocation and additional training costs of employees for our branded flying and Delta Connection operations;                                                                                |
|                                            | •  | reassignment of maintenance operations;                                                                                                                                                      |
|                                            | •  | fuel costs for aircraft not flying under the Continental CPA;                                                                                                                                |
|                                            | •  | distribution costs, including schedule planning, marketing and sales related to our branded flying and charter operations;                                                                   |
|                                            | •  | Overall higher airport, crew, maintenance and dispatch costs as a result of changes in our flying for our 274 aircraft;                                                                      |
|         | •  | changes in wages, salaries and related fringe benefit costs, including the impact of SFAS123(R) and changes to our self-insuredmedical and workers compensation 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;                          |
|                                            | •  | aging of our fleet;                                                                                                                                                                          |
|                                            | •  | higher aircraft ownership costs as aircraft are released from the Continental CPA or if Continental were to declare bankruptcyor otherwise default under the current financing arrangements; |
|                                            | •  | changes in the cost of services provided by Continental at fixed rates under the Continental CPA and our otheragreements.                                                          |

**LIQUIDITY AND CAPITAL COMMITMENTS**

***Operating Activities***

            Our primary source of liquidity is the cash flow provided byAirlines’ operations.  For the three months ended March 31, 2007 and 2006, our operations provided cash flow of $27.0million and $33.4 million, respectively.  The decrease in operating cash flows is attributable mainly to our transition costsassociated with changes in our flight operations.

***Investing Activities***

            During the three months ended March 31, 2007, our capitalexpenditures were $11.7 million.  For the remainder of the year, we expect capital expenditures for fleet (primarily relatingto spare parts and aircraft modifications) and non-fleet (primarily relating to facility build-out or improvements, maintenance andground service equipment) to be approximately $33 million.  The increase in our capital expense in 2007 is due mainly to thediversification of our flying into our own branded flying, corporate aviation and regional service for Delta.

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***Financing Activities***

            During the three months ended March 31, 2007, we met all ourdebt requirements.  In March 2006 we made the final principal and accrued interest of $17.8 million on our note payable toContinental.  

**           ** There is no covenant under any of our long-term debtagreements that restricts our ability to undertake additional debt or equity financing.  During 2003, Holdings completed theprivate placement of $137.2 million senior convertible notes due 2023.  Repayment of the convertible notes is jointly andseverally guaranteed on an unconditional basis by Airlines.  Except as otherwise specified in the indenture pursuant to whichthe notes were issued, there are no restrictions on Airlines’ ability to transfer funds to Holdings in the form of cashdividends, loans or advances.  General provisions of applicable state law, however, may limit the ability of any subsidiary topay dividends or make distributions to its parent in certain circumstances.

            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 in the future.

***Purchase Commitments and Contingencies***

            We have options to purchase an additional 100 Embraerregional jets.  In October 2005, Continental declined its right to add any of these option aircraft to the capacity purchaseagreement.  We continue to have the option to take delivery of all or a portion of the aircraft outside of the capacitypurchase agreement, but have not made a decision as to whether we will do so. 

***Aircraft, Simulator and Spare Engine Leases***

            As of March 31, 2007, we have significant lease and subleaseobligations for aircraft, simulator and spare engines that are classified as operating leases, which are not reflected as assetsand liabilities on our balance sheet.  These leases expire between 2013 and 2022.  As of March 31, 2007, our expectedtotal minimum rental expense for the full year 2007 under current and future firm order aircraft, simulator operating leases andspare engine operating leases is approximately $347.6 ****million, net of deferred credits amortized.  Approximately $8.7million represents the incremental increase of 200 basis points on the 69 aircraft released from the Continental CPA.  Asubstantial portion of our aircraft is leased directly by Continental from third parties and subleased by Continental to us. If Continental were to default under these leases, our ability to retain access to the aircraft could be adversely affected.

***General Guarantees and Indemnifications***

******

            We are party to many contracts in which we agree to indemnifythird parties for tort liabilities that arise out of or relate to the subject matter of the contract.  In some cases, thisindemnity extends to related liabilities arising from the negligence of the indemnified parties, but typically excludes liabilitiescaused by gross negligence or willful misconduct.  We cannot estimate the potential amount of future payments under theseindemnities until events arise that would trigger a liability under the indemnities.  However, we expect to be covered byinsurance for a material portion of these liabilities, subject to deductibles, policy terms and conditions.

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**Item 3.  Quantitative and Qualitative Disclosures 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 2006 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 ContinentalCPA, which is scheduled to expire December 31, 2010 (subject to extensions by Continental through 2030, or its right to terminatethe agreement based on 12 months’ notice at any time), and a related fuel purchase agreement with Continental, whichterminates when the Continental CPA terminates.  Under these agreements, Continental provides all of our aircraft fuel needsfor the aircraft covered by the Continental CPA, and we incur fuel expense and fuel tax equal to the lower of the actual cost ofthe fuel and the related taxes or agreed-upon caps of 66.0 cents and 5.2 cents per gallon, respectively.  In addition, underthe agreement, we recover our fuel expense from Continental with a 10% margin.  For the three months ended March 31, 2007 and2006, our cost of fuel under the Continental CPA was 71.2 cents per gallon, including fuel tax. 

            Flying operations, outside of the Continental and Delta CPAs,can be significantly impacted by changes in the price and availability of aircraft fuel.  Except for our branded flying, wecan minimize our exposure to fuel price volatility through contractual arrangements.  For our branded flying, efforts toreduce our exposure to increases in the price and availability of aviation fuel include the utilization of fuel purchase contractsinvolving fixed price contracts.  Fixed-price arrangements consist of an agreement to purchase defined quantities of aviationfuel from a third party at a stated price, limiting our exposure to market volatility.  As of March 31, 2007, we had committedto purchase 6.8 million gallons, or 66 percent of our anticipated branded flying fuel needs, at a weighted average price pergallon, excluding taxes and into-plane fees, of $2.11 for the second quarter of 2007.  Additionally, we have committed topurchase 13.0 million gallons for the second half of 2007 and 6.8 million gallons for the first six months 2008.  Thisrepresents approximately 40 percent and 21 percent of our anticipated branded flying fuel needs for the second half of 2007 andfirst half of 2008, respectively. 

***Interest Rates***

            The Continental CPA contains a provision for the interestrate implicit in calculating the scheduled lease payments we make to Continental for the aircraft removed from the agreement toincrease by 200 basis points upon their removal.  The Continental CPA provides that our block hour rates will be adjustedhigher or lower to reflect any changes in the rental rates relating to the aircraft remaining under the agreement.  We alsohave potential interest rate exposure with respect to our loan agreement with EDC, which bears interest at the six-month LIBOR plus1.75% per annum.  The interest rate applicable to this variable rate note may rise, increasing our interest expense.  The impact of market risk is estimated using a hypothetical increase in interest rates by 100 basis points for our variable ratelong-term debt.  Based on this hypothetical assumption, we would have incurred an additional $0.1 million in interest expensefor the three months ended March 31, 2007 and 2006.  However, we believe that interest rate increases on our variable rate,long-term debt would be offset by increases in interest income.

            We do not hold long-term, interest-sensitive assets andtherefore the value of our assets is not subject to interest rate fluctuations.  We do not purchase or hold any derivativefinancial instruments to protect against the effects of changes in interest rates.

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            As of March 31, 2007, weestimated the fair value of our $137.2 million (carrying value) fixed-rate debt to be $128.2 million based upon quoted marketprices.  Market risk is not estimable for this debt instrument since its fair market value is based on many factors, includingthe risk-free interest rate, the performance of our common stock and investors’ trading behavior. 

****

**Item 4.  Controls and Procedures.**

*            (a) Evaluation of disclosure controls andprocedures*.  Based on their evaluation of our disclosure controls and procedures as of the end of the period covered bythis report, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures areeffective.

****

**           ***(b) Changes in internal control over financialreporting.*  Beginning January 1, 2007, we have an integrated human resources, payroll and financial system of record, aLawson application software.  This has resulted in a significant change to our internal control over financial reporting forthe year ending December 31, 2007.  We continue working to correct a significant deficiency previously disclosed. 

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**PART II. OTHER INFORMATION**

**Item 1.    Legal Proceedings.**

****

**              ** None.

****

**Item 1A. Risk Factors.**

               None.

**Item 2.    Unregistered Sales of Equity Securities andUse of Proceeds.**

|                                                         |        | **Total number of shares purchased(1)** |            |       | **Average price paid per share** | ** ** | **Total number of shares purchased as part of publicly announced program** |            |       | **Maximum value of shares that may yet be purchased under the program   (in millions)(2)** |
|---------------------------------------------------------|--------|-----------------------------------------|------------|-------|----------------------------------|------------|----------------------------------------------------------------------------|------------|-------|-------------------------------------------------------------------------------------------------|
|                                                         |        |                                         |            |       |                                  |            |                                                                            |            |       |                                                                                                 |
| January 1 to January 31, 2007.............              |   | 6,448                                   | ** ** | **$** | 7.81                             | ** ** | **—**                                                                | ** ** | **$** | 24.4                                                                                            |
| February 1 to February 28, 2007..........               |        | 226                                     |            | **$** | 8.02                             |            | **—**                                                                |            |       | 24.4                                                                                            |
| March 1 to March 31, 2007..................             |        | 124                                     |            | **$** | 6.71                             |            | **—**                                                                |            |       | 24.4                                                                                            |
|                                                         |        |                                         |            |       |                                  |            | ****                                                                       |            |       |                                                                                                 |
| Total.................................................. |        | 6,798                                   |            | **$** | 7. 80                            |            | **—**                                                                |            | **$** | 24.4                                                                                            |
|                                                         |        | ****                                    |            |       |                                  |            | ****                                                                       |            |       |                                                                                                 |

|        | (1)  | Shares shown were withheld to satisfy tax obligations arising upon the vesting of restricted stock and do not count against theprogram. |
|--------------------------------------|-----------|-----------------------------------------------------------------------------------------------------------------------------------------|
|                            | (2)  | Amount shown relates to securities repurchase program.                                                                                  |

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

               None.

**Item 4.    Submission of Matters to a Vote ofSecurity Holders.**

****

               None.

**Item 5.    Other Information.**

****

               None.

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**Item 6.    Exhibits. –**

| 3.1    |     | Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form10-Q for the quarter ended March 31, 2005, File No. 1-31300). |
|--------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2    |     | Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K for theyear ended December 31, 2002, File No. 1-31300).              |
| 31.1   |                    | Rule 13a-14(a)/15d-14(a) Certification by Chief Executive Officer.(1)                                                                                                                        |
| 31.2   |                    | Rule 13a-14(a)/15d-14(a) Certification by Chief Financial Officer.(1)                                                                                                                        |
| 32.1   |                    | Section 1350 Certification by Chief Executive Officer.(2)                                                                                                                               |
| 32.2   |                    | Section 1350 Certification by Chief Financial Officer.(2)                                                                                                                                    |
|   |                    |                                                                                                                                                                                              |
|        |                    | (1) Filed herewith.                                                                                                                                                                     |
|        |                    | (2) Furnished herewith.                                                                                                                                                                 |

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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: May 9, 2007 |                         | **/s/Frederick S.Cromer                   **                                                                                             |
|                   |                                                                                                         | Frederick S. Cromer Vice President and Chief Financial Officer (Principal Financial Officer)                                                                                                                                            |
|         |                                                                                                                                            |                                                                                                                                                                                                                                         |
| Date: May 9, 2007 |                         | **/s/PhungNgo-Burns                                   ** |
|                   |                                                                                                         | Phung Ngo-Burns Staff Vice President - Finance and Controller (Principal Accounting Officer)                                                                                                                                            |

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**INDEX TO EXHIBITS****OFEXPRESSJET HOLDINGS, INC.**

****

| 3.1    |     | Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form10-Q for the quarter ended March 31, 2005, File No. 1-31300). |
|--------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2    |     | Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K for theyear ended December 31, 2002, File No. 1-31300).              |
| 31.1   |                    | Rule 13a-14(a)/15d-14(a) Certification by Chief Executive Officer.(1)                                                                                                                        |
| 31.2   |                    | Rule 13a-14(a)/15d-14(a) Certification by Chief Financial Officer.(1)                                                                                                                        |
| 32.1   |                    | Section 1350 Certification by Chief Executive Officer.(2)                                                                                                                               |
| 32.2   |                    | Section 1350 Certification by Chief Financial Officer.(2)                                                                                                                                    |
|   |                    |                                                                                                                                                                                              |
|        |                    | (1) Filed herewith.                                                                                                                                                                     |
|        |                    | (2) Furnished herewith.                                                                                                                                                                 |

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