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[quote user="schlimm"] [quote use The price of the plane ticket covers the airline's proportional costs and produces a small return for the shareholders.  The price of the Acela ticket covers the proportional share of the operating costs and contributes to the NEC capital costs, but it is not sufficient to cover all of the allocable costs.  A conservative estimate of the capital subsidy for the Acela passenger between New York and Washington ranges from $28.58 to $51.20 per person.  The actual amount, which Amtrak does not disclose, would depend on a number of variables, but if it charged the full cost of the service between New York and Washington, the price of an Acela ticket (business class) could be $223.93 to $246.55.  In addition, Amtrak pays no fuel taxes, power taxes, or property taxes.  When these factors are included in the numbers, the real cost of the Acela is somewhat higher than the airline fare.  [/quote] How do you know whether or not the plane covers the airline's costs?  What is the basis for your conservative estimate of the capital subsidy for the Acela passenger, etc. since Amtrak does not disclose the actual amount?  Some inside information? [/quote] Airlines get no direct subsidies, with the exception of the regional carriers that provide service under the Essential Air Services Program.  Over the long run they have to cover their costs, or they go out of business.  Because they are competitive, investor owned companies, they cannot afford too many lose leaders.  I don't think the LGA to DCA operations are a lose leader.  If they were not covering their costs on the LGA to DCA runs, they would not be offering the number of flights that they put up every day. Equally important, they have high load factors on the LGA to DCA flights.  There are more than 100 flights a day between LGA and DCA or BWI.  I'll see if I can get some segment data for U.S. Airways, Delta, etc., which are the major carriers on the LGA to DCA and BWI runs.   The major financial difference between the commercial airlines, bus companies, etc. and Amtrak is the former entities will fail and go out of business if they don't cover their costs. Amtrak, which has lost more than $25 billion since its inception, plus opportunity costs totally $71.9 billion, is immune to investor forces.  Had it been forced to operate like its competitors, which it should have, it would have been out of business by the late 70s.       The basis for my estimate of the capital subsidy for the Acela passenger was layed out extensively in a previous post.  Amtrak's interest and depreciation expense can be found in its financial reports.  I used a range of scenarios to make an educated estimate of the amount of annual interest and depreciation attributable to the NEC and Acela operations.  I don't know the exact amounts to attribute to the Acela, and Amtrak does not provide them.  But my estimates are, I believe, conservative.  In any case, the range reflects an A to D scenario.  If anyone has anything better, I would be pleased to learn of it.
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