Originally Posted by
SailorJerry
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.
It's interesting reading the 10k report for Skywest. Funny that Delta leases them a lot of aircraft for 'nominal' rates and then pays them cost+ to fly the block hours. Well, maybe funny is the wrong word. What's also interesting is that Skywest is contractually obligated to be the second lowest cost operator for Delta, but Delta waived that obligation until EOY 2015:
The Delta Connection Agreements also provide that, beginning with the fifth anniversary of the execution of the agreements (September 8, 2010), Delta has the right to require that certain contractual rates under those agreements shall not exceed the second lowest of all carriers within the Delta Connection program. During the fourth quarter of 2010, SkyWest Airlines and Atlantic Southeast reached an agreement with Delta on contractual rates satisfying the 2010 rate reset provision and the second-lowest rate provision and agreed to rates through December 31, 2015. Delta additionally waived its right to require that the contractual rates payable under the Delta Connection Agreements shall not exceed the second-lowest rates of all carriers within the Delta Connection program through December 31, 2015.
Maybe this is part of the reason a lot of regional pilots are urging Pinnacle pilots to vote no.