1. With respect to people who don't like to fly, people who are afraid to do it but do it anyway don't count. The only "afraid to fly" market that counts is the market of people who are so insane about the (minimal) dangers of flying that they will never hold their nose and board an airplane (or at least will never do so domestically), even if it means taking a far less convenient mode of transportation. And THAT market is tiny.
If you think based on your doctrinaire theological beliefs that it is "tiny", then I will be unable to sway your mind.
Here in reality, the fact is that it's over 5% of the population (based on the lowest estimates), and the can't-fly population is another 5%. I dug up the numbers, you can dig them up too.
If you think 10% of the population is tiny, it's obvious that there's no point trying to communicate with you. I didn't bother to read the rest of what you wrote because there's no point in talking to someone whose beliefs are theological and doctrinaire.
Come back when you admit that 10% of the population will avoid flying like the plague, and that that's significant. Like I said, most of them drive.
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OK, I did read the rest of what you wrote. Apart from your doctrinaire theological belief, I think you missed a couple of other key points.
First, on ridership demand. You are making the same stupid error which everyone makes, which is mixing up Eastern apples and Western oranges. Let me see if I can get this point through your head, since you missed it the first time. This time with details.
* The LSL has good-enough overnight timing for Buffalo-Chicago, Rochester-Chicago, Syracuse-Chicago, and attracts pragmatic sleeper ridership from these points.
There is a real, and substantial, market of people who will take an "on at 7 PM, off at 9 AM" train, even if that's not a proper "on at 9, off at 7". I've run into specific statements from two Buffalo businessmen taking sleepers to Chicago, and I've met a lot of people on family visits (not cruises, time-constrained) between Syracuse or Rochester and Chicago. Some in coach (alternatives: Greyhound, driving, flying but Amtrak is more comfortable so they'll pay a small premium). Some in sleeper (same alternatives, well-to-do, care about comfort more).
* The LSL runs a bit too long for NY-Chicago business trips, but it still attracts a bunch of people.
There's another real, substantial, market who will take an overnight 18 hour trip (hey, it's better than a 10 hour drive), but not a 24 hour trip. This is smaller than the first market, but it's still substantial. This includes plenty of people who might fly but prefer not to. I've met a bunch. (The "wealthy folks who can set their own schedules and like comfort" market from NY-Chicago is huge.)
* There is another smaller market will take an overnight 24 hour trip but not a double-overnight 48 hour trip. This includes people who *strongly* prefer not to fly. This seems from what I've heard to be the mainstay of the Florida train market. (The Florida trains are all profitable.)
* Longer than that, and you're into a combination of cruise trips and people who can't fly / won't fly. I've met them, too, on the transcons. The population on the transcons west of Chicago is really different from the population on the LSL. This would still be a lot of people *if* you're looking at a long string of large cities (like on the Trans-Siberian). But it's really not enough to support four separate trains across the low-population Rockies.
My point here is that, *contrary* to what you imagine, there isn't a magical "time wall" where ridership drops off catastrophically. As the trip gets longer, the number of people who will take it drops, but it drops smoothly. The same is true for pricing; as it gets more expensive, the number of people who will buy it drops, but it drops smoothly.
When you're dealing with New York and Chicago, with Albany and Buffalo as intermediate points, and with an 18-hour total trip -- then that residual number of people, while less than you'd expect for a short corridor service, is still plenty of people to support a substantial service. (The LSL routinely has 10 revenue cars, but Monday before Christmas it was hauling 11, and was overbooked. Yeah, most of the passengers were in coaches, but the sleepers were full up too, at very high prices.)
By way of contrast, if you're dealing with Flagstaff, Albuquerque, Kansas as intermediate points and a 48+-hour trip from LA to Chicago, that residual number of people isn't enough to support a substantial service.
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Regarding the financials:
The experience of Penn Central (with a wartime ticket tax, the full cost of maintaining tracks, a declining carload freight business, commuter services, competing with brand new uncongested government-funded highways) is not relevant to the modern-day situation of Amtrak, where trackwork is funded out of a separate pot and the highways are congested.
The LSL is profitable, before arbitrary overhead allocation is applied. (I've demonstrated this elsewhere, based on Boardman's numbers.) Each sleeper car generates significantly more revenue than each coach car. (Paulus & I worked this out. This last phenomenon appears to be specific to the LSL right now; it's not true on the Florida trains, perhaps because they have a lot of profitable short-distance traffic.) The ridership on the LSL didn't even seem to drop much when the train was catastrophically late and cancelled for weeks, though I think the revenue did.
Amtrak is "undercharging" for the sleepers on the California Zephyr, Southwest Chief, etc. Amtrak is charging plenty for the sleepers on the Lake Shore Limited. It is consistently cheaper to get a roomette from Chicago to LA than it is from Chicago to Syracuse. (Think about what that means). Again, East is not like West.
(Don't talk about 'free meals'; they're a sideshow. The 'free meals' were designed to transfer revenue from the sleeping cars to the dining cars because of Congressional obsession with dining cars. But the prices of sleeping compartments have nothing to do with the free meals; the evidence is people on the LSL, will pay the same amount without the one free breakfast.)
There is unmet demand here. Lots of it. And this is with the usual bad OTP.
It's well documented that poor on time performance *does* cause *very sharp* drops in ridership (in the way that longer schedules do not necessarily). These trains have had bad OTP for decades. I really have no idea how much demand there would be on the LSL if they could simply run it on time, but obviously a lot more.
And that's "a lot more" than a train which routinely sells out and is already longer than the platforms.
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I have to make an analogy here. Ocean liners are obsolete, right? Yeah? Well, there's still one market where an ocean liner plies the waves: London to New York. London is apparently an especially strong market of wealthy people who really prefer to travel by sea rather than air, and will spend huge premiums in time and money to do so. (New York less so, but it's the favored destination of the Londoners.) Although they sell a lot of cruises, the actual one-way travel market out of London remains large enough that Cunard still cater to it. (There are a bunch of specific decisions which indicate that this market originates in London, not New York.)
Will sleeping cars remain a niche market? Sure, but they're a much bigger niche than ocean liners. Where is that niche? Out of New York, going into New York, and to a lesser extent Chicago/Boston/Philadelphia/DC. Anything which is one night and less than a day out of New York is on fairly solid footing, as long as driving isn't too much faster.
I've made some effort to figure out where the cutoff is for viable (popular-enough) sleeper service. If you go strictly commercially, it looks at the moment as if New York-Florida and New York-Chicago routes are profitable, period. (New York is special.) If you stretch a point and consider connecting revenue, DC-Chicago might be. If you believe that the market for sleepers is improving (as I do), you may also see future decent markets in NY-Atlanta-New Orleans, Chicago-New Orleans, Chicago-Texas, Chicago-Denver, Chicago-Minneapolis, and perhaps some other places east of the Mississippi.
You won't find commercially viable markets across the Rockies or the desert. They'll have to be justified for other reasons (the Empire Builder by serving small towns more cheaply than air or highway service, for example).
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Oh. And having a car in New York isn't an amenity, it's a nightmare. You have to be crazy to drive a car in Manhattan. (This is a known thing, it's not just me saying it.) Yes, this is a real reason why people will preferentially fly or take the train rather than driving to New York, I've heard it repeatedly from many people. (Boston has a similar "don't drive there if you can possibly avoid it" reputation, but not as extreme.)
