Originally Posted by
gloopy
But let's run with that assumption for a moment. If the cut throat, back stabbing contracts of SKYW or Pinnacle for a given airframe are too low for them to operate it profitably, and we further (incorrectly) assume that means the aircraft just can't be flown at at that cost anywhere, then we admit that is the absolute ceiling corresponding with the revenue potential for those airframes in the first place. We are therefore admitting those airframes aren't viabile in the first place, even at some of the lowest sell your mother down the river for a buck cost structures. If that's the case, Delta doesn't really need them in the first place now, do we?
Complete
logic fail here.
Delta controls the revenue of those aircraft. The DCI carrier contracts have no revenue clauses, only cost clauses. The DCI's do not market or sell Delta code. Delta does that. The DCI's are paid through cost reimbursements, cost margins, and performance margins. Revenue has nothing to do with how the DCI's make money. They're paid on cost and performance.
In the analysis done for the MEC, additional revenue was added back into the equation and all the DCI margins were stripped out. We still couldn't make it work.
Capisce?