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2011 Amtrak Thanksgiving selling out?
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<p>[quote user="henry6"]</p> <p>This is what deregulation will do for you. Company investors want return not profits nor product. So, you don't do the job you say you are incorporated or charterd to do. [/quote]</p> <p>A viable business adjusts it capacity to meet its expected demand. Even publicly owned electric utilities follow this model. Ultimately, increasing or decreasing capacity is a function of real demand, i.e. what passengers (customers) are willing to pay for. Unlike Amtrak, the nation's airlines, as well as intercity bus companies, have to cover all of their costs.</p> <p>In 2010 the Fortune 500 airlines, e.g. Delta, American, United, etc. had median returns of 1.1% on sales, .6% on assets, and 7.4% on equity. Through September 2011 the nations major carriers had a median return on sales of 2.02%. If the fares were increased by 20%, as claimed in another post, the return on sales would jump to a blistering 2.42%. For comparative purposes, in 2010, the Fortune 500 companies had a median return on sales of slightly more than 5%.</p> <p>If Amtrak had to go it alone, which it should, it would be out of business, with the possible exception of several of the high density corridors. However, as long as it can tap into the deep pockets of the federal government, irrespective of the fact that said government (we the people) is in super deep debt, it can ignore demand models, including the willingness of its passengers to pay for the service, and keep telling the nation how vital it is to its well being.</p> <p> </p> <p> </p>
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