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Sunk costs are those that have been incurred.  Generally, the term refers to costs incurred for capital items, i.e. equipment, plant, real improvements, etc., although the term is sometimes associated with operating costs.  A sunk cost tells management, creditors, investors, etc. what costs the entity has incurred.  It is not a basis for deciding what to do.  A future course of action should be a function of what is the best alternative.  Sometimes the best course of action is to junk the item that incurred the sunk cost, i.e. equipment, plant, etc. All costs are variable in the long run.  However, in the short run the cost of railway equipment, which has been capitalized as opposed to expensed and is being depreciated, would be a fixed cost.  The labor to run the equipment, as well as a portion of the maintenance and the consumables, would be a variable cost.  Running railway equipment that does not cover its variable costs increases a loss or reduces profit.  As a rule, businesses avoid doing so.  On the other hand, running railway equipment that covers the variable costs and contributes something to the fix costs increases profit or reduces the loss.  This assumes that most of the time the operation is able to cover all of its costs, and in the case of a business, earn a return for the investors. Given Capital Metro's cost structure and pricing constraints, running the Red Line trains during the day or after hours will acerbate the losses.  Moreover, due to the sinking economy, it would not be a good idea.  Also, during the day, as well as after hours, when the trains are not running, Capital Metro will be running express buses or local buses between most of the stations served by the rail line and downtown Austin.
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