ExpressJet, which provides regional service for Continental Airlines, posted a lower-than-expected net profit on Wednesday, hurt by higher expenses.

The feeder airline said net profit fell 11 percent to USD$22.7 million, from USD$25.5 million a year earlier.

Last May, ExpressJet said it would hold on to 69 regional jets after Continental canceled a capacity purchase agreement. That decision left the company searching for new business ventures for the planes.

ExpressJet said it would add five of those freed up aircraft to its Corporate Aviation business, bringing the fleet in that unit up to 15.

Operating revenue rose 8.8 percent to USD$428.6 million, helped by fuller planes. Load factor rose 1.5 points to 78.1 percent.

Operating margin fell to 8.1 percent from 9.6 percent. The company rebated USD$2.6 million back to Continental to meet its contractual operating margin of 10 percent.

It said it also incurred additional costs related to its diversification, back-office infrastructure and headquarters relocation.