Originally Posted by
Wasatch Phantom
DCI question...
I understand Delta has contracts in place with several DCI carriers such as Skywest, ASA/Expressjet, Pinnacle, Go Jets, etc. These contracts specify a certain number of aircraft in service with laddered expiration dates.
But I think there are provisions to adjust what Delta pays based on some factors. I've been looking at the Regional forum and the angst surrounding the Pinnacle debacle. It seems pilots from other DCI carriers are urging the Pinnacle pilots to vote no as reduced wages at Pinnacle will lower their costs and contribute to the "race to the bottom".
Could someone (Bucking Bar, GeorgeTG, ACL65, etc.) please explain how these contracts "reset". For example if one carrier bids a lower amount for a certain route how that affects what Delta pays another DCI carrier?
IIRC Skywest negotiated a sweetheart deal for themselves when Delta was in the throes of bankruptcy. If a start up regional carrier underbids Skywest on say SLC-BZN what (if anything) happens?
It's not based on route by route. They're mostly long term capacity purchase agreements with letter grade performance bonuses as well as poor performance kill switches. The only time there is a bid is when the RFP goes out.
HOWEVER - the majority of the CRJ-900s are owned outright by Delta Air Lines, Inc. As a result, Delta can wheel and deal those airplanes more often, as they're on not much more than month to month leases for $1 a month to the DCI carriers.
Unfortunately for your scenario, Skywest owns their own CR9s, so the capacity purchase agreement applies. Details of said agreement can be found in the SKYW Annual Report.
With all that said, Delta does negotiate more flexible contracts than United or US Airways. This is mostly what allows the whipsaw to be as violent as it is.