A look at pricing on the Surfliner

[calwatch]

Interesting presentation at the LOSSAN meeting, with a full maximum price chart for the Pacific Surfliner and discussion about possible going all-reserved and the issues that would entail - especially since a large percentage of Surfliner customers are actually Metrolink pass holders.

http://www.sandag.org/uploads/meetingid/meetingid_3282_14769.pdf

 

[johnny.menhennet]

Read the entire report word for word. Thank you so much for sharing - interesting read. They better not go reserved. Not only would it decrease the ridership via loss of standees, but the "revenue management" that has so far managed to kill ridership would get worse through the introduction of demand-induced pricing. I'm glad that they are finally realizing the mistake that the express train was. It eliminated so many city pairs while not saving much time and it never ended up on-time in the first place. I still think that the second southbound from SLO should not have run through, because the increased use of single-level equipment really sucks for those runs.

 

[trainfan969]

For the Metrolink riders, its probably dependent on what city pairs were surveyed. From what I heard, there are lots of riders between LA and Ventura county. In my experience, there were fewer riders between LA and OC.

As for the reserved seating issue, I believe the crews wanted that to alleviate the "Friday packed to the gills" or unanticipated standee conditions.I have seen extremely oversold trains before and it ain't pretty.

 

[Anderson]

Sadly, the biggest bit of info that I found interesting was the preliminary look-over at the national data:

-Ridership up 3.2% over FY11

-Revenue up 8.8% over FY11

This should put ridership at right under $190 million for the month (I get $189.24m through simple multiplication) and ridership at about 2.76 million for the month. Moreover, considering the "soggy" numbers in CA (the Surfliner continues to be a mess and there aren't many gains to be had elsewhere in CA), this limits where that growth can be found. I'm figuring the following are the biggest non-LD contributors:

1) The upward trends in VA resume, albeit at a somewhat slower pace; and

2) Upward pressure on the NE Regionals continues.

Also of interest is that the increase suggests a bigger bump in PPR than in previous months (the ridership increase had been 3.3%, but the increase in revenue was only 5.6%...that 3% jump is nothing to sneeze at).

====================================

As to the actual topic of the report, I find it hard to believe that the Surfliners won't be going to a reserved system of some sort. The oversold/overcrowded train problem seems likely to continue. One thing that might be worth considering would be to simply break trains into a few categories (once again, perhaps?) such as "Peak", "Off Peak", and "Peak of the Peak" and fiddle with prices accordingly (i.e. drop prices on the off peak trains and bump them slightly on peak of the peak trains). This might, if nothing else, allow you to make some peak-of-the-peak runs de facto reserved trains, even if they come without the full ability to do fare management.

 

[Trogdor]

One thing a lot of the local politicans down there need to understand is that ridership does not equal revenue.

Surfliner revenue is up, despite ridership being down. Caltrans is concerned about maximizing revenue to minimize total subsidy requirements. Some of the LOSSAN transit authorities don't understand the concept of revenue, and only think in terms of total passenger numbers, and not in terms of how much those passengers are paying.

 

[afigg]

Interesting presentation at the LOSSAN meeting, with a full maximum price chart for the Pacific Surfliner and discussion about possible going all-reserved and the issues that would entail - especially since a large percentage of Surfliner customers are actually Metrolink pass holders.

Thanks for posting the presentation. Along with details on on-time performance, ridership numbers in CA and national, customer service surveys, there is quite of lot of information on Amtrak's approach to maximizing revenue and adjusting passenger loads with "reserved" ticket sales. Provides insight in the strategy behind the bucket pricing on the NEC and other corridors which use it. And for the LD trains as well.

If the Surfliners are at the point where they routinely have overflowing peak time of day trains, but 1/2 full middle of the day trains, then it is time to either go to an all reserved system or peak train pricing strategies. We tend to look at bucket prices at just making us pay more for a ticket, but it also allows Amtrak to improve use of a limited resource, seat capacity. If the 7:15 AM departure to XYZ is at the top bucket price, but the 5:30 AM departure is still at the low bucket, those with flexible schedules and are price sensitive can change their plans and take the 5:30 AM train instead. Or if the 5:30 PM train back home on your business trip to XYZ is sold out, but the 6:40 PM is still available and at a medium bucket price, then change plans to get dinner and take the later train. This is how the NEC works.

Reserve ticket sales and bucket pricing should increase total ridership if done correctly. Lower the prices for the less full trains to increase ridership while using bucket prices to control the crowding on the peak period trains. With states now having to pick up the entire subsidy tab, odds are that we will see reserved tickets and bucket pricing implemented for more state supported corridor trains.

Interesting item in the meeting minutes: "Ms. Sakoda asked about leasing additional equipment. The response was that there is no bi-level intercity equipment available in the United States. Commuter equipment would not work because of connection problems." The entire intercity passenger rail system is bumping up against equipment limits. With the bond funding available from passing the authorizations for the CA HSR project, I expect CA will be placing orders for additional corridor bi-levels beyond the 42 units they will be getting in the combined 130 bi-level order.

The Amtrak ridership and revenue numbers in the report are a preview of the June Monthly report which should be out in a week or so. As Anderson notes, June was a better month than May for Amtrak nationwide with a +8.8% increase in revenue and +3.2% in ridership over June 2011. With gas prices heading back up, August & September could be good months for Amtrak overall.

 

[Anderson]

One thing a lot of the local politicans down there need to understand is that ridership does not equal revenue.

Surfliner revenue is up, despite ridership being down. Caltrans is concerned about maximizing revenue to minimize total subsidy requirements. Some of the LOSSAN transit authorities don't understand the concept of revenue, and only think in terms of total passenger numbers, and not in terms of how much those passengers are paying.

It's a bit more complex from that, at least as far as I can tell. On the one hand, they definitely want revenue to go up. On the other hand, there is a distinct feeling that they overreached and I suspect there is a mild panic going on because...well, if the current hike caused this much of a fall-off in ridership, is a "regular" hike even going to "stick" or will there be a ridership loss that kills off revenue? Likewise, revenue may be the technical winner, but I think we all know that ridership is the political winner and that's what has the LOSSAN people worried...not to mention that a drop in ridership will necessarily jeopardize equipment requests (for example).

So I get the feeling that the LOSSAN folks "get it", but that there's a tightrope act going on here...if they could get the operation to be "profitable" but you lose 1/2 of your frequencies in the process due to a crash in ridership from the resulting fare hike, is that a good result or a bad one? Likewise, to take the situation at hand, explaining to voters why the fare hike was a good thing when ridership took a substantial tumble (even if there was just a lot of ridership substitution to the Coaster/Metrolink trains for short trips, something that may have been going on) is something that I think a lot of folks just aren't used to doing.

And I do tend to agree that some sort of additional equipment order is likely...CA will likely be pitching in, and I wouldn't be surprised to see other folks "joining in the fun" over the next few years (MN and IA are the big potential additions, I suspect, but there also seems to be some room elsewhere as well).

Edit: One other advantage of reserved seating on the Amtrak trains is that it will assure folks that they have a seat. I don't know about y'all, but if I fork over $45 to go from LAX to San Diego, I want a seat.

 

[VentureForth]

There needs to be a reserved option for transferee's from the LD System to get to the points served by the Surfliner.

It can be very irritating after 30+ hours of cross travel country to be stuck in standing room only with a lot of local traffic who could be on Metrolink and/or Coaster. Maybe they could implement a strategy of unloading passengers only when inbound to LAX and pick up only when outbound from LAX.

Now, the Coaster can serve the LD passengers with reserved seating North of LAX, but there is really no option to San Diego South of LAX.

Tickets are cheaper on Metrolink and Coaster than Amtrak. When Amtrak just allows cross honoring their tickets, they lose revenue. The commuter lines should be the foremost provider of commuter services.

 

[Anderson]

There needs to be a reserved option for transferee's from the LD System to get to the points served by the Surfliner.

It can be very irritating after 30+ hours of cross travel country to be stuck in standing room only with a lot of local traffic who could be on Metrolink and/or Coaster. Maybe they could implement a strategy of unloading passengers only when inbound to LAX and pick up only when outbound from LAX.

Now, the Coaster can serve the LD passengers with reserved seating North of LAX, but there is really no option to San Diego South of LAX.

Tickets are cheaper on Metrolink and Coaster than Amtrak. When Amtrak just allows cross honoring their tickets, they lose revenue. The commuter lines should be the foremost provider of commuter services.

This is actually a serious question: Amtrak Virginia and VRE have a cross-honor deal in place, but it involves a "step up" charge. Is there no similar deal between Metrolink/Coaster and the Surfliners?

 

[johnny.menhennet]

There needs to be a reserved option for transferee's from the LD System to get to the points served by the Surfliner.

It can be very irritating after 30+ hours of cross travel country to be stuck in standing room only with a lot of local traffic who could be on Metrolink and/or Coaster. Maybe they could implement a strategy of unloading passengers only when inbound to LAX and pick up only when outbound from LAX.

Now, the Coaster can serve the LD passengers with reserved seating North of LAX, but there is really no option to San Diego South of LAX.

Tickets are cheaper on Metrolink and Coaster than Amtrak. When Amtrak just allows cross honoring their tickets, they lose revenue. The commuter lines should be the foremost provider of commuter services.

This is actually a serious question: Amtrak Virginia and VRE have a cross-honor deal in place, but it involves a "step up" charge. Is there no similar deal between Metrolink/Coaster and the Surfliners?

Well Coaster removed itself from the Rail2Rail program a few years back, but I think I remember that last year, they reintroduced the program, but were going to increase the price of a monthly pass by $80 for the use of the PS trains, which double the amount of trains that can be taken between Downtown and both SOL and OSD. So there was a step-up charge if that is what you are indicating, at least as how I interpreted it.

 

[Trogdor]

There is no step-up charge for Metrolink pass holders riding Amtrak.

 

[afigg]

It's a bit more complex from that, at least as far as I can tell. On the one hand, they definitely want revenue to go up. On the other hand, there is a distinct feeling that they overreached and I suspect there is a mild panic going on because...well, if the current hike caused this much of a fall-off in ridership, is a "regular" hike even going to "stick" or will there be a ridership loss that kills off revenue? Likewise, revenue may be the technical winner, but I think we all know that ridership is the political winner and that's what has the LOSSAN people worried...not to mention that a drop in ridership will necessarily jeopardize equipment requests (for example).

If the trend line for Surfliner ridership over the April to June period shown in the chart on page 22 holds, the service may be back to neutral growth by July. March 2011 was a slight increase in ridership, but I'm using April to June numbers for the trend:

April 2012: -10.4% ridership

May 2012: -6.1%

June 2012: -3%

So if they can wait a few months and not overreact, the ridership may get back to positive growth. When they slide into FY13, then the monthly year over year comparison numbers will be comparing to a -10% drop-off month and it will be easier to show increases for the headlines. Showing increased ridership does matter, I agree, because it effects the politics and support.

The question I have about the Surfliner is whether there are more LOSSAN projects that will be completed in the near term, the next year or so, that will improve trip times and reliability? Of course, there is the flip side of construction projects which cause service delays for a few months and thus hurt ridership for a while.