Amtrak Says It Is Finally Making A Profit, But More Bad News Is Coming

[Anderson]

The report probably deserves its own thread, but a few things I found interesting:

• Silver Star expenses down $5 million. Obviously there hasn't been any major changes to the on-board services to this train, so I imagine it might have something to do with crew utilization? Ridership is up 22k, but revenue is down $200k.
• Capitol Limited revenue is down $1.1 million, but expenses are down $4.4 million. Ridership down 9.4k.
• Palmetto revenue is down $2.7 million, and ridership dropped by 42.6k riders.
• Auto Train revenue is up $6 million and expenses are down $2.8 million. The losses on this route (as shown by Amtrak) decreased over 50% (from $15.6 million in FY 18 to $6.7 million in FY 19).
• The eCSI customer satisfaction scores for the entire Amtrak system increased by 10 points, despite OTP dropping. The Crescent has a score of 79, which is the lowest. Last year it had a score of 57.8. I wonder if the way this score is calculated has changed?

I believe they rejiggered the system and gave a note on this point a few months back.

 

[neroden]

Correcting as best we can for Amtrak "allocated costs" fraudulence -- by removing the same amount of costs on each train for 2019 as I did in my 2018 model to reflect fake costs which are not short-term variable costs -- I find:

From 2018 to 2019 Amtrak managed to reduce the losses on the CZ, SWC, TE, and Sunset Limited. Unfortunately, losses have increased on the Cardinal. The CONO has slipped back from profit to loss. The Palmetto's profit has dropped.

In better news, the Capitol Limited has gone from loss to profit. The profits on the Star, Meteor, LSL, Crescent, Auto Train, EB, and have gone up.

This is all before the trashing of food service happened, of course. Since revenue was down on half the trains (the exceptions with increased revenue are the Cardinal, Silver Meteor, Southwest Chief, Coast Starlight, Lake Shore Limited, Crescent, and Auto Train), this implies that Amtrak found a number of ways to cut costs before trashing dining service (good for them?) -- or that Amtrak has reduced the allocation of costs to the LD trains.

(My model is based on the difference between the avoidable costs published in the bar chart by Boardman many years back and the Amtrak official allocated costs published for the same year. If Amtrak actually reformed the cost allocations my model would stop working. Amtrak should really just publish avoidable costs numbers.)

Reported cost drops are substantial and sudden on all the Eastern trains with dining cars, which probably indicates the removal of allocated "Heritage Diner" costs and the replacement with much cheaper "Viewliner Diner" costs. Capitol Limited also had sudden cost drops -- probably the early removal of the dining car, which was early enough to be in the figures in this case -- and the Star had larger drops, which was probably related to the removal of dining car service mid-2018. Other reported cost drops were seen for Auto Train, the Zephyr, and the Sunset Limited; not sure why in those cases.

The Cardinal's costs actually went *up* but revenues went up more. Gardner must hate that...

(Being of a conspiratorial mindset at the moment, I suspect that Stephen Gardner couldn't stand the increase in revenue on long-distance trains and decided to trash dining service on the Auto Train, Crescent, and Lake Shore Limited, and to the extent he could, on the Cardinal as well, in an attempt to reduce revenue. We all remember his attack on the Southwest Chief. The Coast Starlight's success seems to have escaped his eye, so expect an attack on it next. OK, maybe I'm being too paranoid.)

My bottom line conclusion: if the Cardinal and Sunset went daily, the Sunset, Chief, Zephyr, TE, and Capitol Limited would be roughly breakeven, most of the rest would be about $10 million profit per year each, with each of the Star and Meteor about $20 million and the Auto Train about $40 million. Before "allocations". Without trashing food service.

Losses can be expected to be higher for 2020 due to Amtrak's deliberate attempt to drive away customers.

 

[edding]

Well I happen to like Cato, but that's a discussion for another day.........

Carthago delendum est.

 

[Karl1459]

(2) I believe that Amtrak did keep around a few cars of the 1939-42 vintage at the start, even if they cycled them out in that first decade or so. I remember specifically reading somewhere that there was a car from 1939 in the mix, and there were a few very nice batches of equipment ordered in the late 1930s that would have been more worth keeping than some of the "newer" (read: 1950s) stuff that simply wasn't kept up well. There were a few "bad idea" cars (the cor-ten steel ones come to mind) that were newer as well.

Perhaps this survivor? http://www.pnwc-nrhs.org/6200.htm

 

[DCAKen]

That url should be http://www.pnwc-nrhs.org/6200.html

 

[cirdan]

As for locos, again the issue is how adequately is the system funded. There is the possibility of endlessly rebuilding and tweaking old locomotives to keep them going beyond any reasonable lifespan. Adequately funded system replace locomotive much more rapidly than inadequately funded systems do. Of course change in technology hastens replacement at those flex points dramatically, like again at Indian Railways, after 2025-26 diesel locomotives will become relatively rare except on obscure branch lines, if the full electrification of all major routes goal is achieved. There is a major program developing for rebuilding diesel engines as electric engines since the electric drive and trucks and motors are literally exactly the same as in the electric locomotives.

Add to this the situation concerning capital costs of locomotives. There was a time in many countries of the world that every batch of locomotives, and also multiple units, hauled cars etc, was unique and would be taylor specified and then taylor built. In some countries that is still the case today. This not only means every batch has to be egineered, maybe not from scratch but engineered anyway, but also that there may be unforeseen flaws. In other words, you pay more for an inferior product. The USA was quite early to break out of that. It happened around the time when diesels replaced steam and you could order off the shelf and well proven locomotive designs with only limited scope for customization. However in the passenger sphere and especially in Amtrak, the size of the market and economies of scale never reached the point that that happened.

The higher costs and risk associated with ordering such custom batches means that operating companies are more likely to hold onto existing equipment for longer. It's better to fix something that may be old but that you know will continue to work than take the leap and risk spending a lot of cash on something that amy well be completely useless. This may be the reason that in the USA many front line freight diesels get retired after say 15 years whereas in Europe they get repaired and refurbished and re-engined and totally rebuilt but keep on going for twice or three times that.

In recent times, that has been changing in the passenger sphere too. European manufacturers have been pushing customers towards off the shelf designs. Think Bombardier and their Traxx family that with relatively minor variations can be configured for passenger, for freight, for commuter, for inter city, for whatever.