You are correct. I remember with ACA/DAL it was 6 month notice and I don't think that there had to be a specific reason. There were also triggers for automatic cancelation if completion factor or on time statistics fell below a certain point.
I have heard that Chataco is in danger of losing their DAL contract due to these type of triggers. I was curious as to what their statistics were, but their numbers aren't reported on the DOT website.
I believe that to be CAL's fundamental mistake. The salvation of the airline industry will not be in slashing costs and outsourcing to the lowest bidder, it will be in providing good customer service.
Look at companies that are successful such as Southwest and Jetblue. They may attract customers with low fares, but their fares aren't all that much lower than the legacies. And their choice of destinations is much more limited than the legacies. The big difference is that they provide much better customer service. They generate loyal customers who will go out of their way to fly with them.
I think that CAL just threw out their customer service to save a few bucks.