Everyone is right on this one.
The military paid the operator, World Airways in this case, a flat fee to operate the flights. An amount that was far lower than what we get for ad hoc flying. It was put out to bid and the lowest bidder won. Of course, it's not that simple, because of the AMC teaming arrangements. One team gets 60% and the other gets 40%.
The military "billed" the commands for the flying. Some commands paid more than others and the SA's paid almost nothing at all.
It was cheaper to fly commercially if your command was "paying" alot for the ticket. Also, somebody got the frequent flyer miles, if they rode a commercial flight. That was the biggest gripe.
Here's the bugger. A figure that's run around World is that the total cost to the military to fly the personel was running about four times the total cost of operating the Patriot Express. The issue was far more about how the military was billing itself, than the total cost to the tax payer.
Will it come back? If I were a betting man, I'd say yes. After the war is over. One of the big selling points was that it kept carriers like World, Omni, North American and Ryan alive and ready to serve until the next crisis. The military has come to depend on us to be there. Yes, they can activate CRAF and force the big boys to deploy more planes, but we are there ready to go. We have always been the first to fly folks in and we'll be the last to fly them out.