Spin off LD trains

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twa904

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If Congress would spin off the long distance trains and Amtrak management could not book NEC expenses to the LD trains, could they survive as a separate business?

If you could extend the Palmetto back into Florida, some form of the SL east of NO, a Chicago-Florida train, restore a Desert Wind/Pioneer route, extend the Crescent to Houston, extend the

CONO to Detroit, do an Atlanta-NYC day train, and acquire additional equipment to add capacity

out west.

Could it work
 
I think doing so would be at the cost of spreading the current ridership over those route extensions.

I would suggest giving Congress a second passenger railroad entity to deal with would be a bad idea.

Are there any passenger railroads anywhere on the planet that do not rely on funding from their national governments to survive?
 
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If Congress would spin off the long distance trains and Amtrak management could not book NEC expenses to the LD trains, could they survive as a separate business?

If you could extend the Palmetto back into Florida, some form of the SL east of NO, a Chicago-Florida train, restore a Desert Wind/Pioneer route, extend the Crescent to Houston, extend the

CONO to Detroit, do an Atlanta-NYC day train, and acquire additional equipment to add capacity

out west.

Could it work
No, they could not survive without several hundred million dollars of operating subsidy. Over and above that they would need capital subsidy to acquire new/additional equipment.
 
Nope. This is doomed to failure because the politics simply wouldn't work. Like it or not, but the politics are probably far more important than the economics.
 
Well, if you have the time - try perusing the 2014 DOT Budget Highlights at this link: http://www.dot.gov/budget/dot-budget-highlights-fiscal-year-2014

I have been trying to figure out how much the FAA and FHA get in relation to what is spent on the FRA (other than administration) and how much is devoted to intercity passenger rail service. Since the most in-depth expenditure breakdown is by the FAA, I suspect that the railroads are going to get far less than the $3666 Million USD allocated the the FAA in 2012.
 
Under the new budget yet to be approved by Senate the LD monies and the NEC monies are to be handled separate.
 
I think doing so would be at the cost of spreading the current ridership over those route extensions.

I would suggest giving Congress a second passenger railroad entity to deal with would be a bad idea.

Are there any passenger railroads anywhere on the planet that do not rely on funding from their national governments to survive?
Yes. JR East in Japan for one. Subsidies are required in lower population density areas. Otherwise, market economics can generally do the job.

Now, with all due respect to Japan Rail, they did buy the infrastructure from the government at pennies on the dollar. But even then, just about all of it has been replaced and funded privately. For many of these companies, it's about diversifying their business model.

I don't know that ANY railroad can operate without the assistance of Government, but that's different. Even All Aboard Florida will perhaps be the largest private rail operator in the US when they operate to Orlando from Miami - bordering on Long Distance but still serving high population zones. They are doing it with federal loans (not grants, unless you call not paying interest a grant). They may even need to use eminent domain to get some land, but they are trying not to, and it's for a minimal portion of the route. They may even get some tax breaks and rebates.

More pointed, many transit operations don't work with federal funds but with municipal or state funds.

But all that was just to comment on the comment regarding federal funding. To the OP, if the private railroads could have done it, they'd still be doing it.
 
Why is it that when very rich corporations like say e.g. Boeing extracts huge subsidies from a state or locality in terms of tax rebates in order to set up facilities at a location, everyone seem to cheer and view that as a an investment in job creation yadda yadda, and yet when AAF just gets a Bond issue for building infrastructure which creates jobs and additional economic activity those same people rise up in arms? It is precious to see the likes of Bob Crandall of AA who enjoyed considerable government subsidy largess and before deregulation government provided monopoly protection now getting excited about AAF getting $1.7 billion bond issuing authority. Afterall Crandall's precious creation depended on government provided bankruptcy protection to bankrupt armies of their ex-employees. but of course that was for his and his successor's glory so that does not count I suppose.
 
I think doing so would be at the cost of spreading the current ridership over those route extensions.

I would suggest giving Congress a second passenger railroad entity to deal with would be a bad idea.

Are there any passenger railroads anywhere on the planet that do not rely on funding from their national governments to survive?
Yes. JR East in Japan for one. Subsidies are required in lower population density areas. Otherwise, market economics can generally do the job.

Now, with all due respect to Japan Rail, they did buy the infrastructure from the government at pennies on the dollar. But even then, just about all of it has been replaced and funded privately. For many of these companies, it's about diversifying their business model.
If Japanese railways are profitable, is that before or after capex? Do these massively expensive projects such as the Shinkansen with all its tunnels really get built without government support?
 
Another question to ask is, to what extent do their real estate operations contribute to overall profitability. Not that it is a bad thing, but the relative contribution from straight farebox, and ancillary related real estate operations is useful to know.
 
I think doing so would be at the cost of spreading the current ridership over those route extensions.

I would suggest giving Congress a second passenger railroad entity to deal with would be a bad idea.

Are there any passenger railroads anywhere on the planet that do not rely on funding from their national governments to survive?
Yes. JR East in Japan for one. Subsidies are required in lower population density areas. Otherwise, market economics can generally do the job.

Now, with all due respect to Japan Rail, they did buy the infrastructure from the government at pennies on the dollar. But even then, just about all of it has been replaced and funded privately. For many of these companies, it's about diversifying their business model.
If Japanese railways are profitable, is that before or after capex? Do these massively expensive projects such as the Shinkansen with all its tunnels really get built without government support?
A fair question. As I mentioned in my post, the original JR Central bullet train from Tokyo to Hakata and the Tohoku from Ueno (in Tokyo) to Aomori (?) were built by the government. In the last 30 years, the network of bullet trains, including new right of way with expensive tunnels along with multiple equipment upgrades have been paid for privately, or with loans paid back to the government.

Another question to ask is, to what extent do their real estate operations contribute to overall profitability. Not that it is a bad thing, but the relative contribution from straight farebox, and ancillary related real estate operations is useful to know.
A lot. All Aboard Florida is using their leverage as a real estate holding company to maximize the diversity of their business model - particularly real estate rental for retail stores at their stations. The Japanese do this extremely well. In fact, most of the private rail companies that were NEVER subsidized by the government were started by department stores to get employees and shoppers to and from their stores.

There are third sector rail companies in Japan that do require either municipal or federal assistance. But they won't think twice about closing unproductive, under utilized lines.

Somehow, I think Amtrak gets really screwed out of diversification because of the multiple levels of bureaucracy in everything they touch. Like, if I wanted to run a newspaper or burrito stand at the Savannah train station, the rent would be paid to Savannah - not CSX or Amtrak. This is also why at the stations Amtrak DOES own, you see huge corporate galas in once grand waiting areas, like Chicago, NYP, LAX, etc (though I don't know the extent of Amtrak's ownership or revenue).
 
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Amtrak does not own LAUS. LAMTA does, and until recently Catellus (descendent of Santa Fe Land Company) did. Amtrak did not and does not realize any revenue from the events, film and commercial shoots there. Nor does it share in any lease or rental income. Amtrak is a tenant at LA.
 
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