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What is Avoidable Cost?
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<p>I largely agree with the piece on avoidable costs. I presume that you copied this from the source cited.</p> <p>Without access to Amtrak's books, determining the avoidable costs associated with discontinuance of the long distance trains is impossible, or it is a highly speculative exercise. </p> <p>Based on my experience, an aggressive business would be able to shed avoidable costs quicker than a government agency. And Amtrak is a government agency. A competitive business must shed itself of unproductive product and/or service lines quickly or go under. A government agency is under no such time pressure. But at the end of the day, we don't really know.</p> <p>Based on FY13 operating results, if Amtrak could get rid of the long distance trains, it comes close to being able to cover all of its costs, or at least it positions itself to do so in a few years. It would need to tweak its remaining services' revenues and labor costs.</p> <p>Depreciation is Amtrak's second largest expense. I have submitted an FOIA request to determine how much of it is worn by the NEC, Short Distance...and Long Distance Trains. Once I have that number, assuming that I get it, I'll post the 2013 financial results with depreciation included, which is key to knowing how close the NEC is to being self-sustaining.</p>
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