N2264J
Originally MidAtlantic was supposed to have been a new wholly owned. Obviously they shared your opinion of the challenges of starting a new company because today, MidAtlantic is a division of mainline. (not much different than Song, but fenced from the rest of the company)
As far as your question regarding outsourcing to companies like Chautauqua, Skywest, et al' and your assertion that outsourcing diverts profits, you and I are going to have to disagree.
Remember that the fee-per-departure system is a wet-lease. Delta essentially wet-leases 50 seats. Once they are the leasee of those seats they can do whatever they choose with them.
Obviously they try and sell them. Just as with a Comair RJ or a Delta 757 once those seats are sold Delta collects the cash.
So, all else being equal, a 50 seater at Chautauqua and a 50 seater at Comair generate the same amount of REVENUE for Delta Air Lines.
The question becomes, who has the greaters COSTS for Delta Air Lines.
Chautauqua: Very simply the cost of the "wet-lease" or the fee. Delta has nothing to do with the infrastructure of Chautauqua. They simply send them a check every month and what Chautauqua does with that check is their business. Just as we pay ASA for ground service in Atlanta, so does Chautauqua pay Comair for the use of our ground service in Cincinnati and in other outstations.... but WE bear the cost of keeping that equipment and staff.
Comair: The operating cost of the aircraft plus the cost of the infrastructure of the entire airline... the general offices, maintenance, stores, ground support, ground service vehicles, training... you name it. EVERYTHING. AND, Delta has to make the initial investment to buy/lease new aircraft, facilities, hire new people etc. (with CHQ they simply add a bit to the monthly check)
So what's greater? The Fee or the costs of running an airline? And what is the value that they put on the ability to whipsaw us? Your guess is as good as mine but i'll close with this:
When Chautauqua completes their most recent aircraft order they will be larger (in terms of fleet size) than Comair.
Companies such as Mesa, Chautauqua, and Skywest did not become as large and powerful as they have by offering an inferior product and generating substandard profit for their mainline partners. If companies like Delta, USAir, American, and United did not profit from those relationships they wouldn't exist.
I'd be willing to bet that Delta makes pretty darned close to the same money on the codeshares as they do on the wholly-owneds... and in bankruptcy we might find a lot of our flying heading in that direction.
