eNewsletter for October 22, 2012

Amtrak snack bars lost $84.5 million last year; $833 million in 10 years Washington Examiner-Oct 16, 2012 Federal spending over the past 20 years has surged 71 percent faster than inflation, much of it on bloated and wasteful programs and services, …The use of Fully Allocated Accounting by Amtrak opens it to these misleading headlines. The snack bars didn’t lose millions of dollars and cutting out the Cafe Cars wouldn’t save millions. The problem with Fully Allocated Accounting is every segment is charged a share of the total overhead for Amtrak. The problem is Amtrak has more overhead than sources of revenue . For Amtrak to be profitable it needs to expand to bring in the revenue to cover its overhead. To bring in more revenue it needs more equipment, better connections and more trains to serve more markets without greatly increasing its overhead. Cutting back service cuts revenues and makes things worse. NB

October 22, 2012 Part 1  October 22, 2012 Part 2

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