What is interesting is that many of the regionals that make up the DCI portfolio have work rules that have come a long way since 2001, 401K match of 75% up to at least 8%, and trip rigs that pay them a lot more than what they fly. Their costs have gone up a lot over the lat 12 years. No doubt about that.

It will cost more on a pilot to pilot basis to fly the jets here. No doubt about it. We know that, and unless we want to fly their whole book, and have a separate one for this flying, we just need to understand and expect that. The difference is what seniority numbers will be flying A and B positions here versus there. Here it will be significantly more junior. That must be taken in to account.

Where we differ on labor costs the most are their mechanics, flight attendants, and dispatchers. Their mechanics have to work about a 70 hr week to clear 80K a year, their FA's top out at 27 an hr where ours are almost to 48 an hr, and their dispatchers are paid about 60% of what our get paid. The majority of the labor savings come from these.

The real savings comes in the form of removing debt off the balance sheet and having someone else commit to the aircraft lease/payment. DAL is still on the hook for the payment, but now though the form of an operational expense, and not debt service. This helps DAL lower the debt service on the debt it carriers as well and the debt that they would carry, which would result in higher rates/debt service for all of the debt. That savings far outweighs any pilot or labor savings. Find a way to allow or convince DAL to do this with in-sourcing labor, and reducing redundant management and support teams and you found a way for all parties to come out ahead.

The simple fact is the savings are too great for DAL to pass up and as a result they go for the savings and outsource the brand.