Bit of a circular argument, not making best use of network capacity (you could say that about any train with less carriages), and there are shorter ones in Sheffield, and via Redhill etc. That argument should be fix capacity by eliminating shortest trains, not the open access one If it carries more.
As for revenue abstraction, basing a figure on XC inability (for 5 years) of restoring hourly Reading-Newcastle is rather cheeky. Not doing something then saying if you did would cost X is clutching at straws. If they restored the service then the reason might be justifiable, but as they haven't it isn't.
Given that not all 5 coach trains are created equally:
Class 180 - 287 seats
Class 221 - 246 seats
That's an uplift of 16.6% andd that's assuming that XC don't run them as 4 coach trains with 200 seats, which would be an extra 43.5%.
However, if XC lose those paths to an OAO, then they would have extra units to strengthen other services. Does that abstraction figure take that on board?
As it could be that by not being able to run those services XC (or GBR when XC becomes part of that rather than run by the save parent company who are wanting this OAO route) actually could be financially better off.
For example to run 5 services a day it would appear that would require 2 diagrams.
Now, by having two extra units that could allow the following (assuming they are 4 coach units and we aren't going to use them to strengthen parts of a route):
1 Unit is paired with a 4 coach unit
The service run previously with that second unit is now run by a 5 coach unit
The 4+4 train is used to "cover" for the 5 coach unit with a cost saving of 1 fewer drivers
Repeat for the other released unit
That means:
Diagram A (was 4 coach now 5) +46 seats
Diagram B (was 5 coach now 4+4) +154 seats, but only requires 1 driver to run both units
Diagram C (OAO) +41 seats (even if was 5 coaches)
DiagramE (was 4 coach now 5) +46 seats
Diagram F (was 5 coach now 4+4) +154 seats, but only requires 1 driver to run both units
Diagram G (OAO) +41 seats (even if was 5 coaches)
That's 6 services with a minimum of an extra 482 seats for each direction each diagram runs. Chances are that's only 2 services per direction per day, however, that's still 1,928 extra seats (of which 1,600 are with XC).
However, the reducing in the number of drivers required to have those units in service means that it's actually more likely that XC could make a profit.
Let's say that the cost of per seat on a 4 coach train for having a driver is D100 (just a nominal number, so the D is Driver pay), that's D20,000 for the whole train for 4 coaches of 200 seats.
Now that same driver driving a 5 coach unit the cost for each seat drops to D81.30. Which means that even though the tickets they sell haven't reduced XC have seen the cost per seat of having a train driver reduce.
Now if that same driver is then driving a 4+4 train that reduces further and now the cost is D50.
The lease costs for XC are unchanged, they don't have to pay for the OAO stock, the fuel costs are likely to reduce a little (due to lower drag as a 4+4 train over 2x4 services), there might be some minor changes to track access costs (if the change to the diagrams results in a sightly higher or lower number of miles run), otherwise as far as I can tell the big cost difference would be that driver cost, which means that as long as the strengthen services are nearly as busy as the services that they could have been running then XC aren't actually going to be out of pocket and may actually generate more profit (even if their income is slightly down).
Given that drivers are likely to be in the range of 5-8% of XC costs, that's likely to be an overall limited saving.
That would mean (5%) that the drivers cost of D100 for a 4 coach unit would mean a train cost of T200,000. Which is a cost per seat S1,000.
Now, that seat price falls to £981.30, so now that means that XC can be carrying 5 fewer passengers than the maximum seating capacity and still cover the same perpercentage of costs as when it was a 4 coach train.
That's not much, but it does help.
When you look at the 4+4 train that seat cost is now S950 and so compared to running them as separate trains each unit only has to have 190 seats in use rather than 200 seats to cover the same percentage of the costs.
The reality is that the 5% of costs for drivers at XC is more likely to be when the trains are longer units/diagrams and so the driver percentage cost for a 4 coach train is more likely to be closer to 7% than 5%, meaning even fewer passengers are needed to cover the same percentage of costs.
With more capacity and able to get to 100% of their costs covered by selling fewer tickets, there could be a case for allowing the OAO to run the paths as it would put GBR in a better position (especially as it's not unreasonable to assume that the paths to Newcastle already in the timetable are fairly reasonable paths - as why run extra paths, even if the ECML timetable allows them, if the services are not going to generate the returns needed by being unprofitable?).