"Amtrak Chugs Deeper into the Red"

[saxman]

Que more attacks on long distance trains...

From the Wall Street Journal:

Amtrak Chugs Deeper Into the RedRailroad Warns That Rising Ridership Can't Offset Drag of Money-Losing, Long-Distance Routes

By JOSH MITCHELL

Amtrak's financial losses are projected to widen this year despite rising ridership, the top executive of the government-subsidized rail system said Tuesday.

Amtrak blames the red ink on rising compensation costs for union workers and increased costs for fuel, materials and other expenses. Amtrak is making money on its heavily traveled Northeast Corridor between Boston and Washington, serving mostly commuters, executives said. But money-losing, long-distance routes are a drag on the bottom line, Amtrak says.

Article continues here at WSJ.com

Doesn't the Empire Builder cover about 75% of its operating costs? Can't seem to find the info.

 

[Anderson]

It depends on how you're accounting for things. I've seen about three different numbers ("operating costs", "avoidable cost recovery", "cost recovery"). The profit/loss problem isn't the LD routes...it's a complete loss of control over benefits.

 

[Gratt]

Yeah, I read that yesterday, it is really frustrating that this is the case :angry2: I find it hard to believe that more people are riding trains, the entire NEC is finally generating enough revenue to cover its operating costs, rail lines across the country are seeing increased ridership yet for some reason the loss amount is growing???

I dont ever expect Amtrak to be profitable, nor do I think that is a good goal, but the question has to be asked what is going on here??? How can you run the same trains, with more people, and have this happen? I dont buy that union contracts and fuel costs make this much of a difference.

This is like the bad joke, "we lose money on every sale but we make it up in volume"

Can someone explain this :help: :help: :help:

 

[Anderson]

Alright, I've got the FY 2011-15 financial plan up in front of me. Here's what spits out on the summary page (page 2 of the PDF), amounts in millions:

FY11 FY12 FY13 FY14 FY15

605 648 680 717 761 Benefits

1270 1318 1355 1392 1432 Salaries, Wages, & OT

30 31 32 32 33 Other Employee

1906 1998 2067 2143 2227 Total Employee

1972 2012 2083 2176 2200 All Other

I know the numbers clump up, and I can't really help that...

The summary is that everything except benefits is holding to a general line...benefits are rising twice as fast. Cram benefits down to the same line as everything else, and your non-depreciation losses hold steady. Or, put another way, Amtrak blew their union negotiations last time.

Edit: I'll put this in percentage terms. "Everything except benefits" rises between 2.5% and 3.7% each year in the projections. "Employee benefits" rise at between 4.9% and 7.1% each year. The net difference roughly tracks the increase in on-books losses.

 

[trainviews]

Doesn't the Empire Builder cover about 75% of its operating costs? Can't seem to find the info.

The monthly performance reports from Amtrak (found at the bottom of the page here: http://www.amtrak.com/servlet/ContentServer?c=Page&pagename=am%2FLayout&cid=1241245669222) has Cost Recovery ratios for all the routes.

It is about two thirds in in the lengthy documents, Chapter C.

To some extent though it seems like it is a bit of a choice how many costs you call operations and how you distribute them among the individual trains. But still it gives a picture.

 

[HotlantaAl]

Doesn't the Empire Builder cover about 75% of its operating costs? Can't seem to find the info.

The monthly performance reports from Amtrak (found at the bottom of the page here: http://www.amtrak.co...d=1241245669222) has Cost Recovery ratios for all the routes.

It is about two thirds in in the lengthy documents, Chapter C.

To some extent though it seems like it is a bit of a choice how many costs you call operations and how you distribute them among the individual trains. But still it gives a picture.

Thanks for the link and info. That is some depressing numbers for the long distance trains.

 

[Green Maned Lion]

Alright, I've got the FY 2011-15 financial plan up in front of me. Here's what spits out on the summary page (page 2 of the PDF), amounts in millions:

FY11 FY12 FY13 FY14 FY15

605 648 680 717 761 Benefits

1270 1318 1355 1392 1432 Salaries, Wages, & OT

30 31 32 32 33 Other Employee

1906 1998 2067 2143 2227 Total Employee

1972 2012 2083 2176 2200 All Other

I know the numbers clump up, and I can't really help that...

The summary is that everything except benefits is holding to a general line...benefits are rising twice as fast. Cram benefits down to the same line as everything else, and your non-depreciation losses hold steady. Or, put another way, Amtrak blew their union negotiations last time.

Edit: I'll put this in percentage terms. "Everything except benefits" rises between 2.5% and 3.7% each year in the projections. "Employee benefits" rise at between 4.9% and 7.1% each year. The net difference roughly tracks the increase in on-books losses.

actually, that wasn't Amtrak, that was PEB arbitration.

 

[dlagrua]

According to what I have read Amtrak cost recovery from the sales of tickets hovers at around 85% of operating expenses. When you consider that the massive highway and airport portions of the federal transportation budget don't come anywhere close to recovering their operating expsnses, Amtrak isn't doing too badly.

In principle I would agree with conservatives that the government should not be in the passenger train business BUT the private railroads have no interest in running passenger trains and it has been proven time and time again that a passenger rail system is vital to the US economy, the national defense, our ecology and for alleviating highway traffic congestion.

IMO, the measly 2-3% of the federal transportation budget that we spend on Amtrak is money well spent.

 

[transit54]

According to what I have read Amtrak cost recovery from the sales of tickets hovers at around 85% of operating expenses. When you consider that the massive highway and airport portions of the federal transportation budget don't come anywhere close to recovering their operating expsnses, Amtrak isn't doing too badly.

In principle I would agree with conservatives that the government should not be in the passenger train business BUT the private railroads have no interest in running passenger trains and it has been proven time and time again that a passenger rail system is vital to the US economy, the national defense, our ecology and for alleviating highway traffic congestion.

IMO, the measly 2-3% of the federal transportation budget that we spend on Amtrak is money well spent.

On principle, I can understand the argument that the government shouldn't be in the passenger train business. However, government should be in the infrastructure business. If the government creates significant numbers of dedicated right of ways for medium to high speed passenger rail, I have no doubt in my mind that Amtrak could be cut loose from its operating subsidy and function as a freestanding entity. If we aren't willing to make that investment, our government will continue to be in the passenger train business indefinitely.

 

[transit54]

I think that the increase in the loss also relates to the fact that state subsidy agreements likely do not cover the increase in labor/benefit costs that came about after the PEB decision. I'm sure Amtrak's loss will narrow in the coming years as state agreements are renegotiated under PRIIA. At least for the next few years, I think Amtrak has a rosy future, with stimulus projects coming online, increased ridership and revenue and increased state contributions under the PRIIA. This all could change after the 2012 election, given that Republican moderates are increasingly becoming a rare breed, but I am generally very hopeful.

 

[Larry H.]

Having just read the whole article I am struck by how dumb would it be to consider cutting out the long distance service. They already admit the NEC is basically a commuter line. So much for a National Rail system if that were ever to happen.

 

[Ryan]

I know the numbers clump up, and I can't really help that...

Use the [ code ] tag (without the spaces) to force a monospaced font that you can line up:

FY11   FY12   FY13   FY14   FY15   
605    648    680    717    761    Benefits
1270   1318   1355   1392   1432   Salaries, Wages, & OT
30     31     32     32     33     Other Employee
1906   1998   2067   2143   2227   Total Employee
1972   2012   2083   2176   2200   All Other

Edit:

Still, it's easier to look at a picture than a block of numbers - here what the numbers look like:

I'm not seeing too much to get excited about. Yes, as a percentage, the benefits climb faster, however (as has been mentioned in other threads), that's most likely due to the absolutely retarded increases in health care costs that are impacting the entire nation and have very little to do with Amtrak or the Unions.