The critiques miss the key point: in industries with high fixed costs and low marginal costs, aside from congestion, efficient pricing has little to do with marginal costs. (canadianbusiness.com)
Without trying to sound crass of course ROE will continue at it's current level he is buying a railroad (high fixed cost business and a monopoly) it's not like someone is going build a competeing railroad in the same area there will only ever be one and it will always be cheaper than trucking or shipping by air. (barelkarsan.com)
-- And the sale of a loss - making division can radically revise a company's P&L — particularly true of small companies with proportionately higher fixed costs (which really leverages their profitability). (wexboy.wordpress.com)