Jim,
You are absolutely correct. However, US pulled their corp discounts almost a year ago (or maybe over a year ago, time flies faster than a retired Boeing Pilot!) and there was a reason for it. FFOCUS discussion....

So your premise is correct, but not the case today. Actually if you look at the profiles of the CP, Plat and even a good portion of the Golds, you can solidly forecast demand on certain lane segments for two quarters minimum and four qts max (short of an extraordinary event like 9/11 or a very fast drop into a recession) that is nearly 100% resistant to competitive pricing fluctuations. This is worth its weight in gold/platinum or diamonds for the transport business.

So FF's are worth more than their $1/butt/seat mile because they help stabilize a very capacity focused biz.

The only other approach is the WN approach where you price/deliver at the low price sector where it's like a firehose of water to drink. You just stop at the capacity level. Nothing wrong with it but it works best if you have a more direct, less hub focused network.

Ah crud, now I am sinking into the mud...... If in doubt, and you want to understand the economics of hubs, Fred Smith of FedEx fame has done a stellar job of explaining it.

Let it suffice to say that the current US "strategy" of trying to put one foot in WN's strategy and the other in the legacy business FF strategy is half wrong in both which equals 100% wrong.