Originally Posted by
ToiletDuck
Like I said. Outsourcing is "cheaper" because the companies themselves are cheaper in the grand scheme of things in comparison to the wholly owned.
Yes, but you seem to be missing WHY its cheaper to out-source vs. in-sourcing...which is exactly what I've been talking about and you so casually dismissed in post #129.
Operationally, PSA is cheaper than RAH when it comes to 70 seat aircraft. I can't absolutely prove this to you because such costs are not broken out on the 10-Qs, but let's think logically about it - PSAs CR7s burn less fuel (also generate less revenue) than the E70, their crew labor costs are lower than RAH due to lower seniority/hourly rates/work rules, and they take advantage of Airways' economies of scale when it comes to other required services.
Why then, if PSA is operationally cheaper than RAH, is it more financially advantageous for Tempe to give 70 seat airframes to RAH instead of growing PSA?
Because RJET is willing to accept the financial costs related to 'small jet' aircraft acquisition, allowing Airways to save its available cash and credit for other capital purchases like widebodies to grow international flying.
I don't disagree with your conclusion, but I think your reasoning is seriously flawed by dismissing this very important financial factor.