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<p>[quote user="henry6"]</p> <p> </p> <blockquote> <div><img src="/TRCCS/Themes/trc/images/icon-quote.gif" /> <strong>Dragoman:</strong></div> <div> <p> </p> <p>You also do not consider the negative impact that loss of LD service might have on the NEC & Corridor revenues, since it would seem likely that at least some of the LD passengers feed into the NEC & Corridors.</p> <div style="clear:both;"></div> <p> </p> </div> </blockquote> <p> </p> <p>This is a key component of my mantra of operating a service instead of running trains.  The service has to be complete with segments of income and segments of breakeven or possibley loss when that loss or break even point does actually feed the larger segment.  It is like the investor mentality of earning 80% of $100 instead of 50% of 200.  Service orientation cannot, or should not, be based on the 80% of 100 return mentality but rather the 50%  of 200 return mentality otherwise it is not service but self serving.  This is where bean counters and bottom liners have torn apart the infrastructure of American business and manufacturing most noticably in utility services like railroads.  If you have a 12 inch water pipe running full being fed by three four inch pipes and close down one of those four inch pipes the two four inch pipesdo not fill the 12 inch pipe anymore leading the bean counter to say the 12 inch pipe is losing money, so close it entirely.  That's  greed, not service.  [/quote]</p> <p>In 1957, the year I graduated from high school, there were 38 passenger train movements a day through Altoona.  The service level was high.  Yet, people abandoned the trains in droves for the economics and convenience of the car or the speed of the airplane.  </p> <p>By 1967 the level of service had been cut drastically, not because of greed or failure on the part of management to understand the concept of service, but because the Pennsylvania, as well as most other railroads, could not generate enough passenger revenues to cover the cost of the service.  </p> <p>Most business people understand the need to look at the whole picture.  They understand the concept of loss leaders.  They understand that sometimes it is necessary to lose money on a segment of service or  product line to enhance the total mix of products and services.  But at the end of the day, they have to cover their costs or go out of business.  </p> <p>By the middle 50s it was clear that the railroads could not make money hauling people because there were not enough people who wanted to take the train at the prices being offered.  So the plug was pulled, which is how capitalism is intended to work. Although the losers don't like the outcomes, it remains the best system for allocating scarce economic resources.    </p> <p>Unfortunately, the government lost sight of fundamental economics and created Amtrak, which has been a drain on the public treasury ever since.  And it will remain so as far into the future as I can see. </p>
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