should long distance trains be cut or fares raised

They are the trains accounting for Amtrak's losses.

I have an even better (long term) idea. Generate agreements with the freight carriers & state / local government entities. Improve the infrastructure, increase the frequencies on some of these routes and promote the corridor portions of some of these routes. Then allow marketshare to grow even more & possibly consider lowering fares rather than raising them.

reppin_the_847 said:

I have an even better (long term) idea. Generate agreements with the freight carriers & state / local government entities. Improve the infrastructure, increase the frequencies on some of these routes and promote the corridor portions of some of these routes. Then allow marketshare to grow even more & possibly consider lowering fares rather than raising them.

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Seems a reasonable strategy. Like "make another bigger pie, stop fighting over the slices" But would take a bit of political co-operation to make the best of it.

MIRAILFAN said:

They are the trains accounting for Amtrak's losses.

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Perhaps first you should explain why you think Amtrak should make a profit.

NW cannonball said:

reppin_the_847 said:

I have an even better (long term) idea. Generate agreements with the freight carriers & state / local government entities. Improve the infrastructure, increase the frequencies on some of these routes and promote the corridor portions of some of these routes. Then allow marketshare to grow even more & possibly consider lowering fares rather than raising them.

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Seems a reasonable strategy. Like "make another bigger pie, stop fighting over the slices" But would take a bit of political co-operation to make the best of it.

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I agree completely. I live in the Northeast, but I don't see why someone in New York or Washington gets the choice of several Acelas a day plus a bunch of Regionals, while someone in another part of the country gets nothing. (Yes, I know "Nobody out in the middle of the country takes the train"--could it be because they don't have one?). I do one tiny thing that may or may not help in the great scheme of things. I use points for Business Class on the Northeast Regional (say, from NJ to CT or NJ to VA), but I pay cash for a long-distance roomette to Florida. I may not be using my points as wisely as possible, but I prefer to give actual money to routes that can use it.

No. Amtrak was created because the railroads felt passenger rail travel was unprofitable, or not profitable enough. There are certain things besides public safety, the military and education that our government should provide and I believe Amtrak long / medium distance rail service is something that should be provided.

If you're looking to scale down Amtrak's portfolio, then why not entertain the notion of selling off the corridors of Amtrak that are successful, and profitable? I'm not advocating that the Federal Government should do this, nor am I sure there would be any business that would think any part of Amtrak would be worth owning/operating with profit as a motivation. It's just another way to look at it.

MIRAILFAN said:

They are the trains accounting for Amtrak's losses.

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Amtrak is federally funded public transportation. Other forms of public transportation are funded by various public government sources.
As to "losses":

Does the public sidewalk in front of your home, office,or business make a profit? No!

Does the public street,roadway or interstate highways in front of your home, office, or business make a profit? No!

Does the bridge, overpass or tunnel you travel make a profit? No !

Does any passenger train make a profit? No!

Does any form of public transportation make a profit? No!

Therefore the question is: Should all forms of 'money losing' public transit, trains, sidewalks, roads, bridges,highways, rapid transit, metro subways, city bus, etc, subsidized air routes, airport facilities, and annual maintenance of these entities, in front of your home, office, or business and used by your family, friends, and clients-customers be cut or fares raised?

I hate binary options.

For me.. how about we DOUBLE the number of LD on existing routes to better leverage resources we're already paying for?

What.. we already pay to heat/cool the Atlanta station and have employees there in the morning and evening for the SB and NB Crescent?

How about we create a day train that is NB in the morning and arrives in the evening. Call it the Southern Express. Now we've got twice as much service, and we're not paying a dime more for people or the station. Yeah, we'll still lose money, but now spread out the costs.

The solution to profitability (which is a questionable goal with public transportation in the first place) is rarely in cuts only.

SCbogey said:

MIRAILFAN said:

They are the trains accounting for Amtrak's losses.

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Amtrak is federally funded public transportation. Other forms of public transportation are funded by various public government sources.
As to "losses":

Does the public sidewalk in front of your home, office,or business make a profit? No! I don't have a sidewalk in front of my house. You can pay to put one there, even though you live nowhere near me.

Does the public street,roadway or interstate highways in front of your home, office, or business make a profit? No! Considering more people travel on these modes in my small city than ride LD trains in a year, I would say that the return on my taxes is better suited towards my daily needs.

Does the bridge, overpass or tunnel you travel make a profit? No ! See above.

Does any passenger train make a profit? No! Yes!

Does any form of public transportation make a profit? No! You're probably right here. Private transportation for the public good can and has made a profit. It's a shame when the "public" takes it over and destroys it. The Chicago El lost money only because the city refused to allow it to raise rates that followed regular inflation.

Therefore the question is: Should all forms of 'money losing' public transit, trains, sidewalks, roads, bridges,highways, rapid transit, metro subways, city bus, etc, subsidized air routes, airport facilities, and annual maintenance of these entities, in front of your home, office, or business and used by your family, friends, and clients-customers be cut or fares raised?

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I'm not a fan of losing Amtrak. I really am not. The total tax burden on the average American is $0.40 for every man woman and child. But I would like to see that money better spent. You can be fair to employees, charge a fair price, and make a little money.

Rob Creighton said:

No. Amtrak was created because the railroads felt passenger rail travel was unprofitable, or not profitable enough. There are certain things besides public safety, the military and education that our government should provide and I believe Amtrak long / medium distance rail service is something that should be provided.

If you're looking to scale down Amtrak's portfolio, then why not entertain the notion of selling off the corridors of Amtrak that are successful, and profitable? I'm not advocating that the Federal Government should do this, nor am I sure there would be any business that would think any part of Amtrak would be worth owning/operating with profit as a motivation. It's just another way to look at it.

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Back in the day passenger rail travel losses were killing the railroads.

If the feds had not taken over passenger rail by forming the National Passenger Railroad Corporation it was very possible no American railroad company would have survived.

Passenger rail traffic declined because the feds built the interstate highway system for cars and airports for commercial passenger airplanes.

The final blow was when the Post Office stopped using passenger trains to sort and transport mail.

The postwar resurgence was short-lived. In 1946, there remained 45 percent fewer passenger trains than in 1929,[10] and the decline quickened despite railroad optimism. Passengers disappeared and so did trains. Few trains generated profits; most produced losses. Broad-based passenger rail deficits appeared as early as 1948[10] and by the mid-1950s railroads claimed aggregate annual losses on passenger services of more than $700 million (almost $5 billion in 2005 dollars when adjusted for inflation).[11][12][13]

By 1965, only 10,000 rail passenger cars were in operation, 85 percent fewer than in 1929.[11] Passenger service was provided on only 75,000 miles (120,000 km) of track, a stark decline.[11] The 1960s also saw the end of railway post office revenues, which had helped some of the remaining trains break even.

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MIRAILFAN. Name any national passenger railroad on the planet that makes a profit.

The interstate highway system and airports don't make a profit and get subsidies that dwarf the subsidy Amtrak gets. So why would anyone, including congress critters, expect Amtrak to make a profit?

Many tout the NEC as being profitable, but it's not if you consider the costs to maintain the NEC's infrastructure.

VentureForth said:

You can be fair to employees, charge a fair price, and make a little money.

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Who does?

VentureForth said:

Does any passenger train make a profit? No! Yes!

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Since we are talking here of long distance trains, the claim made above that "passenger trains make a profit" presumably is about LD trains. I would like to know which LD train service was in mind for making that claim.

Already our rail system is laughable outside of the NEC. If we lose what we have, we will be an utter embarrassment in front of the rest of the Western world as well as the rapidly developing markets in Asia, etc.

We should improve upon what we have and not destroy it.

We should convert all roads to toll roads, with the toll high enough to generate a profit for the roads.

US Constitution, Article 1, Section 8:

The Congress shall have Power To... establish Post Offices and post Roads;

The roadways, the railways, and the airways are the (relatively) modern world's "post Roads". They should not be expected to return a profit to the government any more than the navy.

ainamkartma

JR East

Maybe not in the USA, but in the world, yes.

No, they don't make a profit from operating trains. They use the profit from their real estate ventures to subsidize their train service. Same thing FEC is hoping to pull off (and I wish them the best of luck and hope to see them thrive).

http://www.economist.com/blogs/economist-explains/2014/06/economist-explains-7

JR East owns the land around the railways and lets it out; nearly a third of its revenue comes from shopping malls, blocks of offices, flats and the like.

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The basic contention that passenger trains do not make a profit holds.

That is why asked the specific question. I was curious to see if there was a case where there was cash positive pure operations without getting help from ancillary activities.

Now for corridor service there are examples, but then again they are not cost heavy LD trains. Arguably TGV Sud-Est has been a cashflow positive operation without using any ancillary activities.

DB's interim report for Jan-June 2014 seems to indicate an overall profitable operation, and in particular both DB LD (includes ICE and IC operations) and DB Regional are both shown to be overall profitable. The problem of course is that DB does operate services under contract for Regions and I am almost certain that the contract price is counted on the positive side of the ledger.

I have seen recent reports from Indian Railways which shows that a group of Rajdhani and Shatabdi Expresses which were introduced commercially are profitable, but the politically introduced other set are not. Indian Railways is trying to figure out a way to bill back the social cost for services that they were asked to introduce by the government, specifically ones that they knew were going to be dogs. They have of late been aggressively canceling the real dogs and withdrawing them and trying to come to an understanding with the government about the borderline ones.

So overall it is a mixed bag. It is probably inaccurate to say that there are no passenger train operations that are profitable. That statement can be falsified easily. OTOH, none of them are wildly profitable and many are not so profitable and some are hugely loss making absent contract payments from government or somewhere else.

I don't have a say in this

Yes. Let Amtrak cut it's way to prosperity. If they cancel all of the trains, just think of how much they'll save.

Theaters don't make money from showing movies, either. They rely on the sale of ancillary businesses like popcorn, soda and candy. So, yes, you can parse profitability however you wish, but diversification is a strategy most businesses use to mitigate their losses.

No matter how much we might want it, and politicians bloviate about "operating government like a business", nothing operated by government will ever make a profit, especially mass transportation!

Written on Stone Tablets!

Another ways to look at this and not just pure profit/loss.

How much economic activity can the government generate from operation of these trains directly and indirectly to the cities it serve?

How much $ does it cost to create a job?

Govt often spends money to stimulate economic activity with direct subsidies to manufacturers and indirectly through tax breaks and other things.

I believe it would be peanuts compared to the real wasteful spendings.

MIRAILFAN said:

They are the trains accounting for Amtrak's losses.

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Why now?

We can all see that Amtrak has bottomed, it's creeping along toward improving, and the improvement should accelerate starting about two years from today.

Ridership has increased nicely for several years running. And fares have been raised. Amtrak is at record levels of farebox recovery, or ticket revenue against costs. That's due largely to the Stimulus paying to return 90-odd cars to the fleet from the wreck yards, and the increased capacity tapped the suppressed demand and led to better passenger counts.

Since then, the Stimulus paid for a large order of new bi-level equipment for the Midwest and California, with a 30% increase in capacity on the Midwest corridors coming in 2017. Even Washington and Oregon are getting a 50% increase in capacity from new trainsets for the Cascades service. Meanwhile about 100 cars will cascade off the Midwest routes when the bi-levels are delivered. The Horizon cars will need serious upgrades, but the impact of another 100 coaches and more diesels in the fleet should be sweet.

And as much discussed on this board, the order of 70 new electric locomotives will speed trains a bit and cut costs a good bit, like the puny pathetically small order for cost-cutting new baggage cars and diners, as well as 25-33 more sleepers (if you count the bag/dorms as half sleepers) for added capacity at the high-revenue end of the train. Amtrak needs a lot more equipment, a lot, but this is a good start.

Another few Billion of Stimulus funds are being invested into upgrading a few corridors, chiefly St Louis-Chicago, Detroit-Chicago (actually, Dearborn-Kalamazoo), Seattle-Portland, Charlotte-Raleigh, New Haven-Hartford-Springfield-St Albans, and around Albany NY. With a spend-it-or-repay-it deadline of September, 2017, mark your calendar for two years from now for a bunch of good things to happen on these routes: better ride, faster speeds, greater reliability, and more frequencies all leading to more passengers, higher ticket prices and revenue, and greater capacity over all. Amtrak will look much better in just 2 years or so.

I know you are talking about the LD trains, and I'm reporting on corridor trains. In my mind, they are inseparable.

Consider the Cascades and the Coast Starlight. They share a number of stations from Eugene to Seattle. Figure roughly dividing each station's costs by the number of daily trains. It's 4 Cascades plus the Starlight now, so 5 trains dividing station costs. If those costs are $1 million, to keep it simple, it's $200,000 a year for the Starlight. Add two more frequencies to the Cascades, so 7 stations divide the costs. Voila. Station costs are hypothetically less than $150,000 for each train and the Sunset saves $50,000 a year. Other shared overhead, from Beech Grove to the reservation system to advertising and marketing to the salary of Boardman's secretary, all the overhead declines per passenger when Amtrak has more riders.

Even the shared physical route improves for the LD trains when corridor service is upgraded. The Cascades trains run about half an hour faster than the Starlight now, due to the tilting Talgos. But the next set of time savings to kick in, only 5 or 10 minutes but we'll take it, will come from better sidings and bypasses and a short-cut that avoids a single-track tunnel. If the Cascades actually do go 10 minutes faster, so will the Starlight. Long distance and corridors are complementary, not rivals for the resources.

Next Amtrak will need another round of investment of Stimulus dimensions. The state corridors and the overlapping LD routes could absorb a steady $2 to $4 Billion a year of upgrades for the foreseeable future.

Michigan is moving ahead toward Phase Two of upgrading the Wolverine route South of the Lake, from Chicago Union Station most of the way thru Indiana. Currently that crowded stretch carries 3 Wolverines, the Blue Water to Lansing and Port Huron, and the Pere Marquette to Grand Rapids. If that segment gets dedicated passenger tracks, it will cut 50 minutes from their schedules, and allow a doubling of frequencies for the Michigan trains.

As a bonus, South of the Lake will cut the same 50 minutes from the Capitol Ltd and Lake Shore Ltd. Imagine if Ohio comes around to wanting a 110-mph, high-frequency corridor to Chicago like its neighboring states will soon be enjoying. Then the Capitol and Lake Shore and a revived Broadway Ltd or extended Pennsylvanian would each save 2 or 3 hours running Cleveland-Chicago, one could hit Cleveland in daylight or early evening hours, and they would immediately show an operating surplus.

Meanwhile, the Texas Eagle will benefit soon from the upgrades Chicago-St Louis, with faster speeds, better rides, more reliability, shared costs, and tweaked arrival and departure times. (There's a difference between arriving in St Louis at 6:45 p.m. instead of getting there at 7:20 p.m., if you want to get home and kiss your baby good night.)

Virginia and North Carolina could use a few Billion to speed up their regional corridor trains D.C.-Richmond-Raleigh-Charlotte. Piggybacking along, Amtrak's Silver Star, Silver Meteor, Palmetto, and even a short strip of the Crescent would benefit, like the Carolinian and Piedmont trains.

So medium term I'm optimistic about Amtrak and the LD trains. With so many things getting better and better, why is this the time to be quitters and pull the plug?

the freights do and the airlines as well.