atrdriver said:In other words, at a profit number of 45 million per quarter, Skywests investment will be fully paid for in 2 1/2 years.
Exactly. With the fire sale price and the DCI contract, Skywest got a hell of a bargain. As long as Delta stays afloat for a couple more years, SKYW is just about guaranteed to recover its investment and still hold whatever residual value there is in the company.
There's plenty of money to be made in thin margin industries as long as the revenue to capital ratio is good and you can keep the margin on the plus side of zero. Groceries chains are the classic example with profit margins (that's return on revenue) of 2% or less.