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[quote user="henry6"] [quote user="Sam1"] No...discounts are offered upfront when it is a known factor, i.e., a guarantee minimum amount of money to be spent or milage or whatever the criteria....it is money in the bank, it can be used as Irrespective of when they offered, for whatever period of time, if a business offers discounts that don't cover the variable costs and the fixed costs or at least make a contribution to the fixed costs, it ultimately goes out of business.  It is a relatively simple accounting problem. [/quote] Of course we are talking business professionals and not amature model railroaders.  If a discount is offered or negotiated it will be with a profit for the railroad; no business would sell its product for breakeeven or less!   It is a relatively simple rule of business.  No body at Amtrak is an amature nor a non business person.  If they did as you suggest, Sam 1, they'd be out of a job and the company out of business. [/quote] You have quoted yourself and mixed my comments in with your comments.   My argument is simple.  Don't offer discounts unless they cover the variable costs up front and ultimately all or most of the fixed costs. Sometimes a business will offer a loss leader if it has other product lines to make up the difference, or the discounts can be used to hook loyal clientele that will subsequently carry the note.  This is especially true for many start-up businesses. This is what I said or at least mean from the get go.   As noted the key point with respect to Amtrak's premium services (Acela, business class, sleepers, etc.) is whether the pricing covers the incremental costs.  Without access to Amtrak's books, it is impossible to know. It may be worth remembering, however, that in its 2005 report the IG found, amongst other things, that the subsidy for Amtrak's sleeping car passengers was greater than the subsidy for its coach passenger. Raises the question of what has changed?
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