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Re: PC: RE: Re: Why no money?
- Subject: Re: PC: RE: Re: Why no money?
- From: w8ln@xxxxxxxx
- Date: Mon, 19 Mar 2001 21:16:25 -0600
> however, the above statement is incorrect as British Rail's
> Inter-City passenger service turned a small profit in the late
> 1980s, early 1990s
There are two kinds of profits. The first is a profit over operating
costs, which Amtrak makes on the corridor. This is generally what is
referred to when a passenger railroad talks about profits and losses. I
assume that this is what you are referring to.
However, what I was referring to when I said passenger trains can't make
a profit is a system where revenue generated by the operation covers all
operating costs AND all capital costs (equipment, track, locomotives,
&c.). Now days it is assumed that a passenger rail system cannot begin to
cover capital costs, so it is a given that talk of profit and loss
ignores capital costs.
I think Penn Central was getting somewhere around 80% of its passenger
operating costs from passenger revenues, but this did not come close to
allowing capital spending with any hope of a return on the expense. (If
the TGV or Bullet Trains covered 80% of their operating costs there would
be massive celebrations in Paris or Tokyo.)
>From a private, for-profit point of view Penn Central's passenger service
was a nightmare. However, when viewed from the Amtrak model (government
covers the capital and gives a small operating subsidy) Penn Central
doesn't look that bad, especially considering the amount of service that
Amtrak in the South Email List - http://groups.yahoo.com/group/South_Wind
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