As I mentioned over on Cranky, ExpressJet announced late last week that they would be closing up shop on their branded service, and they’ll be going back to solely serving Continental (along with a little corporate work as well). What’s really sad about this is they were finally seeing some traction in the marketplace.

Take a look at this chart going back to August 2007. You’ll see that load factors had steadily risen as they pruned the network and cut the poor-performing flights.

The fact that they finished up the most recent month with a 79.2% load is fairly remarkable considering where they started. They proved that there is, in fact, demand for point-to-point service on smaller routes that hadn’t supported service before. So why are they shutting down?

The price of oil and the aircraft, unfortunately. Those 50 seaters aren’t exactly the most efficient aircraft in terms of fuel per passenger. If they had Q400 turboprops, it could have been a different story, but then again with oil now approaching $150 a barrel, even that probably wouldn’t work.

The main point here? One of these days, when oil prices come down or we find alternative fuels, this will end up working. The timing just didn’t work out for them, but we should all thank them for proving that under different circumstances, this model can work.