I'm not so sure the practice of offering attractive volume discounts for travel on the Acela, as outlined by Sandyhookken, is a great marketing idea. Absent the purchase of additional cars/trainsets, maximum capacity of the Acelas during high demand hours is a fixed number. From the comments on this forum, I believe they may be close to that capacity on some segments of their runs now.
Might it be smarter to offer the discounts on the regionals, where additional capacity can be obtained by adding cars to existing runs?
Dakguy201 I'm not so sure the practice of offering attractive volume discounts for travel on the Acela, as outlined by Sandyhookken, is a great marketing idea. Absent the purchase of additional cars/trainsets, maximum capacity of the Acelas during high demand hours is a fixed number. From the comments on this forum, I believe they may be close to that capacity on some segments of their runs now. Might it be smarter to offer the discounts on the regionals, where additional capacity can be obtained by adding cars to existing runs?
It is not only a brilliant idea but one used in all business for favored, frequent, and bulk customers. The railroad gains because they get a guaranteed rate, a minimum volume, and cut down on account service time. Now, the can plan on train and equipment usage, crew needs, and count on a certain amount of revenue in advance so they know what the need to fill the train up... Acela, Regional, whatever, it is smart business and does not take away from the bottom line but adds to it.
RIDEWITHMEHENRY is the name for our almost monthly day of riding trains and transit in either the NYCity or Philadelphia areas including all commuter lines, Amtrak, subways, light rail and trolleys, bus and ferries when warranted. No fees, just let us know you want to join the ride and pay your fares. Ask to be on our email list or find us on FB as RIDEWITHMEHENRY (all caps) to get descriptions of each outing.
If the incremental fares for the Acela cover or exceed the incremental costs associated with hosting the Acela, the investors (taxpayers) are made whole. In a competitive business, if they did not the product line would be dropped, or it would never have been implemented.
The Acela has been covering its operating costs and contributing to the fixed costs, i.e. equipment, infrastructure, etc. However, without access to Amtrak's accounting records, it is not possible to know whether the Acela covers the incremental fixed costs incurred to support it.
Why was the NEC infrastructure upgraded? Was it to support the Acela's 150+ mph speeds, or was it to support higher speeds for the NEC regional trains, and the Acela was just an after thought. If the NEC upgrades were for the Acela, it does not appear that its users are paying the full cost of their ride and, therefore, the taxpayers is worse off. If, on the other hand, the upgrades were for the regional trains, then it is possible that the Acela is covering its proportional share of the upgrades and, therefore, the taxpayers are better off.
If the Acela does not cover its fully allocated costs, i.e. variable and fixed, the investors (taxpayers) should ask why the service was implemented. Would the country have been better off to upgrade the NEC to 125 mph for NEC trains (coach and business class) that would cover all the costs and break even on a fully allocated cost basis or make a real profit?
The regional business class car is one of eight or more cars on a NEC regional train. Most of the train's variable cost is covered by the coach passengers. Given the seemingly relatively low incremental cost of adding one business class car to a typical NEC regional train, it is possible that the incremental business class fare is covering the incremental business class cost. Again, one would need access to Amtrak's accounting records to make this determination.
Sam1Why was the NEC infrastructure upgraded? Was it to support the Acela's 150+ mph speeds, or was it to support higher speeds for the NEC regional trains, and the Acela was just an after thought. If the NEC upgrades were for the Acela, it does not appear that its users are paying the full cost of their ride and, therefore, the taxpayers is worse off. If, on the other hand, the upgrades were for the regional trains, then it is possible that the Acela is covering its proportional share of the upgrades and, therefore, the taxpayers are better off.
The electrification was for both. Much of the track and signal work was for both. There probably is some increment of track capital and maintenance necessary for 150 mph vs. 125 mph, but I can't imagine it's a very large percentage of the total.
The real question you need to ask is what did taxpayers have to pay for the NH-Boston upgrade vs. what they would have had to pay vs alternatives including "do nothing". NY-Boston and NY-DC are the two big markets where Amtrak compares their market share to airlines, so presumably, the capacity Acela, et. al. provides would have to be provided by air service.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
oltmannd Sam1Why was the NEC infrastructure upgraded? Was it to support the Acela's 150+ mph speeds, or was it to support higher speeds for the NEC regional trains, and the Acela was just an after thought. If the NEC upgrades were for the Acela, it does not appear that its users are paying the full cost of their ride and, therefore, the taxpayers is worse off. If, on the other hand, the upgrades were for the regional trains, then it is possible that the Acela is covering its proportional share of the upgrades and, therefore, the taxpayers are better off. The electrification was for both. Much of the track and signal work was for both. There probably is some increment of track capital and maintenance necessary for 150 mph vs. 125 mph, but I can't imagine it's a very large percentage of the total. The real question you need to ask is what did taxpayers have to pay for the NH-Boston upgrade vs. what they would have had to pay vs alternatives including "do nothing". NY-Boston and NY-DC are the two big markets where Amtrak compares their market share to airlines, so presumably, the capacity Acela, et. al. provides would have to be provided by air service.
You raise a valid point(s). However, without access to Amtrak's accounting records and the engineering studies that led to the upgrades, as well as the current maintenance records, one cannot know whether the incremental fares charged for the Acela cover the incremental infrastructure costs to support it. Nor would one know whether the incremental upgrades for better NEC regional train service could have been implement at a significantly lower cost and be covered by a corresponding incremental increase in NEC regional fares.
Maybe you or someone else can answer a question regarding the incremental maintenance requirements for high speed rail. Several recent articles in the popular press have stated that some of the world's high speed train operators, i.e. China, France, Germany, etc. have slowed down their trains because of excessive power consumption and wear/tear on the equipment. If tis is true it would suggest that the wear/tear of high speed rail is greater than anticipated.
The capacity provided by the Acela, which is used by approximately 30 per cent of the NEC passengers, could have been accommodated on improved regional trains, with improved running times and upgraded business class service, which would have added the panache, as well as enhanced air service.
Amtrak touts its share of the air/train markets between BOS-NYC and NYC-DC. As if there are no other players in the markets! How does it compare to the total market, i.e. air, train, bus, and auto? Nation wide approximately 88 per cent of all intercity trips, i.e. those greater than 50 miles, are by personal vehicle. Presumably, the number is a bit less in the Northeast, but I wonder by how much?
oltmanndThe real question you need to ask is what did taxpayers have to pay for the NH-Boston upgrade vs. what they would have had to pay vs alternatives including "do nothing".
Exactly. Where is there any evidence that building additional interstate roads in that area would be paid for by the users? What evidence is there that expanding airports in BOS, NYC, PHIL, BAL, and DC and other infrastructure expansions for increased air capacity would be user-paid? The assumption seems to be thrown around here as though both road and air are totally user paid, when there appears to be much evidence to the contrary for highways from V. Payne, who has vast experience in that area. Air is less clear, but certainly not a settled fact. So now we are shifting the basis for HSR from more than covering above the rail expenses to covering ROW infrastructure? I would also like to see a citation for the claim that DB is reducing speeds on their ICE services. When i last rode this May, trains were still hitting high speeds. In the summer, there are construction delays. There have also been delays in receiving more equipment from Siemens.
C&NW, CA&E, MILW, CGW and IC fan
Sam1Amtrak touts its share of the air/train markets between BOS-NYC and NYC-DC. As if there are no other players in the markets! How does it compare to the total market, i.e. air, train, bus, and auto? Nation wide approximately 88 per cent of all intercity trips, i.e. those greater than 50 miles, are by personal vehicle. Presumably, the number is a bit less in the Northeast, but I wonder by how much?
Depends how wide a circle you draw for each metro area. If you are just doing the central business district for each, than I doubt you will find many drivers among business travelers.
schlimmExactly. Where is there any evidence that building additional interstate roads in that area would be paid for by the users?
The key point was whether upgrading the NEC regional trains, as opposed to adding a premium service, i.e. the Acela, would have been more cost effective and achieved an equally satisfactory outcome. At less cost to the taxpayers!
The cost of expanding the highways and airways, in my opinion, is irrelevant to whether Amtrak, which is one of two commercial transport modes that gets a direct cash subsidy from the taxpayers, should be offering a premium service that many if not most taxpayers cannot afford.
But why do we use the term "cost to the taxpayer" here instead of the business term, "investment"? What is the difference? If the taxpayer is charged with having to play the game, he uses the same terms because he is doing the same thing. So Amtrak is a taxpayer investment in transportation not a cost. The same with the highway or airway or waterway systems: investments in transportation. Afterall, it is assumed that by building and maintaining these infrastructures will bring a return of the ability to conduct commerce and travel..
Sam1Why was the NEC infrastructure upgraded? Was it to support the Acela's 150+ mph speeds, or was it to support higher speeds for the NEC regional trains, and the Acela was just an after thought.
Immediately or almost immediately after Amtrak began they also began to replace the ties and tracks in the northeast corridor. The old ones were wooden ties and stick rail. The new ones were concrete ties and continuous welded rail. That was done many years before Acela.
Between New Haven and Washington the tracks were electrified by the original railroad companies. However, at New Haven trains would have to change engines from electric to diesel and vice versa. The change took about 20 minutes, long enough to run into the New Haven station and make a phone call in the days before cell phones. In the 1990's the tracks were electrified north of New Haven so they must have had Acela in mind. Of course, the Northeast Regional trains also benefited as they no longer had to stop to change engines.
Sam1The key point was whether upgrading the NEC regional trains, as opposed to adding a premium service, i.e. the Acela, would have been more cost effective and achieved an equally satisfactory outcome. At less cost to the taxpayers!
All of the reports I have ever seen, Sam, say that Acela is the most financially successful train that Amtrak operates. It is more successful than Northeast Regional Service. If the speed were increased it would be even more successful. As long as Amtrak exists getting rid of Acela would increase subsidies needed for Amtrak.
It is precisely Acela's success that Amtrak critics criticize. They argue that government has no business operating a successful business; that is reserved for the private sector and Acela should be turned over to the private sector for exactly that reason. Amtrak should only operate those services which must operate at a loss.
John
John WR It is precisely Acela's success that Amtrak critics criticize. They argue that government has no business operating a successful business; that is reserved for the private sector and Acela should be turned over to the private sector for exactly that reason. Amtrak should only operate those services which must operate at a loss.
It seems to me that those same critics then happily turn around and criticize government for being inept when the things run by government aren't profitable.
As a society we long ago passed the point where we can function without good communications, for transporting goods, as well as people.
To believe that private interests, with private money, focused on the numbers to report at next quarterly shareholder meeting, will regularly invest in infrastructure that will serve for the next 50 years, seems rather naive. They will of course look at the short-term picture.
We would not have a nationwide interstate road system if that had been left to private capital. We would have corridors of toll roads where those could be built and attract enough traffic to pay off the investment and generate profit in the near term. Other modes of transportation would have had similar development. How many airports would there be if it was all up to private capital?
BTW, I am not at all in favor of a system where the government runs everything on 5 year plans or similar. I do think there is a way to balance public interest and investment for the common good with private capital and interests.
Sam1The cost of expanding the highways and airways, in my opinion, is irrelevant to whether Amtrak, which is one of two commercial transport modes that gets a direct cash subsidy from the taxpayers, should be offering a premium service that many if not most taxpayers cannot afford.
Why is it irrelevant when you are ignoring or minimizing the fact that Acela more than covers its operating expenses and you now seem to be bringing up the federally paid for ROW and upgrade in the NEC? Let's compare apples and apples.
henry6 It is not only a brilliant idea but one used in all business for favored, frequent, and bulk customers. The railroad gains because they get a guaranteed rate, a minimum volume, and cut down on account service time. Now, the can plan on train and equipment usage, crew needs, and count on a certain amount of revenue in advance so they know what the need to fill the train up... Acela, Regional, whatever, it is smart business and does not take away from the bottom line but adds to it.
Consider the way the airlines price business travel. They may wine and dine a corporate travel department, but a decision to travel made at the last minute or a need to change plans leave the business traveler paying the maximum for that flight. An additional problem for the carrier is that payment for the business flight may be as far away as 60 days if it is charged to a corporate account, while the individual traveler pays through a credit card that is processed before the flight occurs, sometimes by weeks.
Is the business traveler discount offered by Amtrak on Acela adding passengers who would otherwise drive, fly or Megabus? I have my doubts.
Amtrak was recently struggling with the decision to add Acela cars to the existing trains or ordering additional trainsets. That suggests they are capacity constrained or anticipate being so. Perhaps the corporate travel departments should be wining and dining the Amtrak reservation personnel.
Virtually any and all businesses offer discounts for bulk buying, so why shouldn't Amtrak? You have to understand business, advertising, marketing, etc. to run any business, passenger trains included.
henry6 Virtually any and all businesses offer discounts for bulk buying, so why shouldn't Amtrak? You have to understand business, advertising, marketing, etc. to run any business, passenger trains included.
If discounts fill otherwise empty seats, cover the variable costs, and contribute to the fixed costs, offering discounts is an effective business strategy. If these conditions are not met, discounts are a bad idea. Without access to Amtrak's books, we don't know whether the discounts are an effective business strategy.
If a competitive business offers discounts and the aforementioned criteria are not met, the shareholders take it on the chin. Amtrak, however, is not a viable business. If its discounts fail to meet the aforementioned criteria, the taxpayers wear the consequences.
As of the end of Fy12 Amtrak had accumulated losses of $29.3 billion. If the numbers are restated inn 2012 dollars, the accumulated losses would be north of $40 billion. Amtrak should not be offering discounts or services that acerbate these losses.
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 collateral, bookkeeping and transaction costs are minimized, etc. Buy a doughnut, buy a half dozens, buy a dozen and each price per unit is different. Seat discounts at the last minute to fill seats are different than bulk, long term discounts. If one knows business, selling, etc. then it makes sense...and dollars, too.
Sam1 As of the end of Fy12 Amtrak had accumulated losses of $29.3 billion. If the numbers are restated inn 2012 dollars, the accumulated losses would be north of $40 billion. Amtrak should not be offering discounts or services that acerbate these losses.
One wonders then what level of annual losses would be acceptable for Amtrak?
Or would it be your contention that if Amtrak can't be run at a profit, considering all possible and sundry expenses that can be charged to it, it should not be run at all?
CJtrainguy Sam1 As of the end of Fy12 Amtrak had accumulated losses of $29.3 billion. If the numbers are restated inn 2012 dollars, the accumulated losses would be north of $40 billion. Amtrak should not be offering discounts or services that acerbate these losses. One wonders then what level of annual losses would be acceptable for Amtrak? Or would it be your contention that if Amtrak can't be run at a profit, considering all possible and sundry expenses that can be charged to it, it should not be run at all?
This is a round robin, merry-go-round argument based on one' s political bent and proclivity to highways and oil lobbyists. Basically, Amtrak, as legislated, cannot do anything. It cannot make a profit because Congress is not a railroad organization and its members are not railroaders; it is another government agency designed to keep people occupied in a never ending bureaucratic mess. It cannot make a profit because, I don't think railroads want it to in fear they'd have to run passenger trains thus Congress will keep it that way.
henry6 It cannot make a profit because, I don't think railroads want it to in fear they'd have to run passenger trains thus Congress will keep it that way.
It cannot make a profit because, I don't think railroads want it to in fear they'd have to run passenger trains thus Congress will keep it that way.
Henry,
The freight railroads have no reason to care if ATK makes a profit or not.
What they do care about is having their capacity to serve freight customers stolen by ATK LD trains.
Mac
PNWRMNM Henry, The freight railroads have no reason to care if ATK makes a profit or not. What they do care about is having their capacity to serve freight customers stolen by ATK LD trains. Mac
The past post about Amtrak wanting more seats on Acela is very tellling. The decision to acquire more units seems a wise decision to instead go to the next level of equipment. That does pospone additional seats by Acela-2s for 2 - 3 years.
As others have posted here some schedule times for Acelas are almost always sold out. Those same time frame Regionals Business class appears to be sold out many times. So business class & first class Acelas at certain times seem to need more seats. Those riders IMHO are very time sensative so probably charter a limo, fly, or drive.if no Acela reservation available. That is lost old & new business. After a few times trying to get a seat at those same times they may give up on Amtrak.
The reduction of schedule times both for Acelas ( less than today ) & Regional trains to current Acela times may attract many passengers mainly to Regionals ? Once enough ACS-64s are in proven service maybe Amtrak can use them + double headed AEM-7s to add another 1 or 2 Business class cars to Regionals?
Perhaps more Acelas and regionals in the peak time periods? Acelas are on the hour from NYP to DC, with a regional 10 minutes later. Why not on the half hour as well, from 7 to 9:30? If they can manage 10 minute headway, even more frequent during peak demand times.
schlimm PNWRMNM Henry, The freight railroads have no reason to care if ATK makes a profit or not. What they do care about is having their capacity to serve freight customers stolen by ATK LD trains. Mac Stolen? Oh, too low a fee? Perhaps the freight lines would prefer to turn back the clock and be required to run a real passenger service as mandated in their original charters? I doubt it. Perhaps what we should be considering the freight lines selling more of their lightly used lines to the states or Amtrak for routes that would be desirable. It would reduce the freight lines' minimal maintenance expense and property tax burdens.
My point is that freight railroad management fears that if passenger trains ever make a profit, especially via Amtrak, then they will be forced into looking at and running passenger trains which they fear is the worst thing that can happen....either because a scheduled passenger train interferes with their freight trains, or because it brings people onto railroad property which can be a liability should something happen, or because their attorneys have scared them silly
Railroad lines can carry freight, those lines can carry passenger, or they can carry a combination of the two. Railroad lines, however, are a resource with limits to capacity that cost somebody money to provide, whether it is a private railroad company, the government through funding to Amtrak, or some partnership between the two.
A famous NARP talking point is that one track has the "capacity of 20 lanes of highway." I know this because I was a NARP member 40 years ago, and when my high school had an Earth Day exhibition, I set up a table with a section of track with an HO RDC car to illustrate one track, and I set up some cardboard to show the relative amount of space of 20 highway lanes taking up that much precious Midwestern farm land. The guy next to me had read Paul Erlich's book and had a poster explaining how exponential human population growth is going to choke us out like that one Star Trek episode on overpopulation.
Now that may be true if you are talking about a double-tracked, closely spaced signalled, subway line of passenger trains carrying standing passengers where the trains have all the same good acceleration and braking ability. For other situations, the capacity is less, and when you are mixing (faster) passenger trains with drag and fast (intermodal) freight trains on a single-track line, the capacity is way less than that.
Forget about the argument back and forth between "stolen capacity" and "mandates (to provide passenger service) in original charters." From a standpoint of social policy and social good, what is the best use of the railroad lines?
Maybe, just maybe, we should encourage the railroads to run the maximum amount of freight on their lines and not gum up their traffic flow with (some) Amtrak trains? Maybe if we optimize some railroad lines for freight, we can get more trucks off the highway (no offense to our OTR Forum members -- there will always be work for truckers) and reduce the accident rates and congestion on highways for the benefit of autos (not saying accidents are all the trucks fault, but fewer trucks on the road may make for safer driving giving the skill levels of the average auto driver)?
So maybe Mac is trying to tell us that in running freight, the freight railroads may contribute to bettering passenger transportation and all transportation overall, and we shouldn't have a narrow focus on fighting the freight railroads over running passenger trains over their heavily used main lines?
So the railroads should be "selling more of their lightly used lines to the states or Amtrak"? Well, that is what the Midwest Regional Rail Initiative was all about. That is what the cancelled 800 million in Stimulus money for the Milwaukee-Madison passenger line was all about. That is what the NEC is all about -- lightly used by freight and turned over to Amtrak to operate (and upgrade and maintain). That is largely what the Vision Report of creating a national network of 110 MPH corridors (and the CA HSR) is all about.
The thing is that this becomes expensive, and it becomes hard to get that 20 high lanes worth of passenger traffic. The Japan New Tokaido Line is not only the pioneering HSR, it carries an insane frequency of trains that may be difficult to reproduce elsewhere, that is, until Paul Erlich's projections come to be in the next couple hundred years.
Yes, (Interstate) highways are also expensive, and yes, rural interstates are lightly used (by cars, maybe not so light usage with respect to trucks). And in the end, trains have an intangible, unquantifiable societal goodness that the "beancounters" are missing, although that point of view is a hard sell outside the small community of train enthusiasts, it is even a hard sell to the non-train enthusiast environmentalist and pro-government action advocacy communities. The high school student who was scolding people for having too many babies and maybe even his parents for having him born didn't have much to say about my exhibit with the HO train track, the model RDC car, and the cardboard expanse of highway lanes. Maybe he though the train was a Band-aid to deal with an overcrowded world and his focus was on having less people so there would be more room to drive his car?
If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?
henry6 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 collateral, bookkeeping and transaction costs are minimized, etc. Buy a doughnut, buy a half dozens, buy a dozen and each price per unit is different. Seat discounts at the last minute to fill seats are different than bulk, long term discounts. If one knows business, selling, etc. then it makes sense...and dollars, too.
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.
Sam1 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.
One would think so. But there are plenty of examples of selling loss-leaders, on the premise that the customer who buys the item sold below cost (such as a Kindle), will buy other products from the same seller and so overall generate positive income for the company.
That said, I remain confused about what you really want to happen to/with Amtrak. Much of what you state seems focused on them not covering costs. So then they should charge more. But then you are questioning their premium products as well, even though the price point is higher there, with more positive return for the company. I want to see a functioning passenger rail network in the US that is a viable alternative to other modes of transportation. I am willing to pay for that, from taxes and from tickets. In a perfect world, maybe it's possible to run passenger rail for profit, but I'm not sure. And we don't live in a perfect world. I do believe it is in the interest of federal, state and local governments to ensure that people have multiple options for travel as travel furthers commerce and generates income for the community at large.
I am also aware that in its current highly politicized form, Amtrak, is not able to be all it can be or should be. I think they are missing in some areas, but they are doing a great job in some other areas. And without Amtrak, there would be no passenger rail in the US today, aside from some rapid transit.
One basis for a quantity discount is that the "seat" is just a bench in a glorified boxcar, but the expensive part is selling the ticket and then having the conductor "pull" the ticket.
That is the basis for the term "commuter." You don't commute by automobile -- that is a change in the original meaning of the term. If you were a regular traveller between Point A and Point B to go between home and downtown job (back in the day, this was probably executives who lived on exurban estates and rode daily to downtown jobs at corporate headquarters), the railroad company "commuted your fare", that is, gave you a volume discount.
For example, on the old C&NW, when I worked a summer job on Madison Street near Northwestern Station, I bought a monthly pass at a discounted rate of the individual fares. I bothered the station agent only once a month to purchase this pass, and the conductor just glanced at it coming down the aisle.
During the school year, I "commuted" to Northwestern University (no relation to the Northwestern Railroad), getting on and off at Davis Street, Evanston, which was a good 20 minute brisk walk in whatever kind of weather. Since I was not going all the way to Northwestern Station, no commuted (or commuter) fare was offered.
Actually, the whole thing was kind of stupid. C&NW gave a discount to customers who travelled during the rush hour and got off at Downtown. As a student, I was often travelling off-peak, and by getting off at Davis Street, I freed a seat at Davis Street for a Downtown commuter. I was off-peak both in time of travel and travel segment (the seats fill up as you approach the Downtown terminus whereas the train is mainly empty at its remote North Line terminus), but I got no discount.
Think about it -- the "commuter train problem" is that you have the morning and evening rush hour, which is hard to bridge with a single crew shift, and you get bad utilization of equipment for two reasons -- the rush hour concentration of demand along with (most) commuters boarding at different places along the line and all getting off at Northwestern Station. This is what makes commuter operations such money-losers, and you are giving the "volume discount" to the very travel pattern that is operationally vexing.
And that we have participants around here arguing that passengers "ought to get" volume travel discounts "just because" and criticizing those who say otherwise just goes to show you how we are coming up short in a reasoned, data-driven approach to passenger train advocacy.
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.
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.
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.
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