Okay...for a little more information...
The Q400 is a Capacity Purchase agreement with Continental. Continental buys 74 seats from Colgan for a pre-set amount. Basically we get $X,XXX per completed flight. Should we operate the Q400 for another airline, other than CAL, then Colgan would contractually be required to reduce the cost to Continental. This is, as PNCL Corp says, to share the cost of ownership of the airplane(s). So instead of getting (for example only) $6,432 per flight now, should we operated the Q400 for British Airways CAL would get a rate reduction to lets say $5,344 per flight.
The SAABs are operated for Continental, United and US Airways on a revenue sharing, pro-rate agreement. Very much a codeshare agreement. Colgan operates the flights under the Connection/Express banners, but is responsible for all of the costs associated with operating said flights. De-icing, landing fees, MX, Crews, FUEL, CATERING, canceled flights and hotel rooms for PAX (MX CNX ONLY) are all the responsibility of Colgan. We set the ticket prices in the SAAB markets we serve and therefore control the seat inventory respectfully.
We receive 100% of the base fare for a passenger traveling locally (ie BHB-BOS, MHT-LGA, TYR-IAH, CRW-IAD). If a passenger is traveling roundtrip from Kileen, TX to Houston, TX and the total cost is $566.76, Colgan would receive $566.76 minus any tax. This is not common. Many of our passengers make connections to destinations beyond our hubs. If that same person travels from Kileen, TX to West Palm Beach, FL and paid $566.76, Colgan receives a "connect incentive" and would be reimbursed about $50-80 total. Even though they still carried that same passenger the same distance and they took up the same seat, we are reimbursed differently.
This is why we reduced the US Airways flying out of LGA in September and almost got rid of many of our United markets in August. Pinnacle doesn't like the thought of losing money and that's what's at stake in most of these markets. However, the Nantucket, Hyannis, and Martha's Vineyard is our bread and butter. Our profit margins on those flights are amazing, most would be surprised.
With that being said, the SAAB flying in IAH is profitable, US Airways stuff is hit or miss and UAL isn't too bad.
Hope this helps with anyone who was wondering about our agreements with major airlines.
The only airlines in the USA operating under Pro-Rate Agreements:
Colgan Saab 340's (US Airways, CAL, United)
Gulfstream 1900's (CAL)
TranStates ERJ-145's (US Airways)
That's it.
Everyone else operates under Capacity Purchase Agreements.
