Edit post

Edit your reply below.

Post Body
Enter your post below.
[quote user="schlimm"] [quote user="Sam1"] The passenger per mile subsidy for rail is many times greater than the corresponding subsidies for airline passenger miles and motor vehicle miles traveled. [/quote]  One of the problems with the sort of statistics you present is that the presumption is that the number of passengers per mile is a relatively fixed value.  If that were true, then rail travel would make little sense..... The analogy would be if Atlanta Hartsfield had only two RT flights a day. [/quote] The operating subsidy per passenger mile is a variable of the gross passenger load and would be influenced by market density.  If more passengers can be attracted to the train, the subsidy per passenger mile would go down and, if enough passengers were attracted at a rate high enough to cover the operating costs, the operating subsidy could be eliminated.  Realistically, the probability of this happening in the foreseeable future is low. In the only corridor where Amtrak has had a bit of consistent operating success, financially speaking, the Acela service had an operating profit of 11.8 cents per passenger mile in FY09.  The regional trains, which carried 70 per cent of the NEC passengers, lost 6.3 cents per passenger mile, thereby wiping out the Acela operating profit.  These figures are before interest and depreciation. After factoring in interest and depreciation, the NEC lost a significant amount of money.   Unfortunately, Amtrak does not disclose the exact amount for the NEC, nor does it provide the required information to calculate the per passenger mile cost of the interest and depreciation.  Therefore, it is impossible to know whether the Acela broke even after interest and depreciation.  I doubt it.  Most of the interest and depreciation attributable to the NEC should be charged to the Acela services because the bulk of it was incurred for the improvements to the NEC that were made to hoist the Acela.  The Acela may have come close to breaking even; the regional trains in Amtrak's most densely populated corridor could not cover their operating costs let along the interest and depreciation.  The cost per passenger mile or vehicle mile is the metric used by most transport economists and accountants for comparison purposes.  It is the only one that makes sense.  The operating costs are made up of the firm's variable costs, e.g. labor, fuel, heat, light, etc.  The fixed costs are not mixed with the operating costs.  They consist of equipment leases, depreciation, right-of-way amortization, etc.    According to a March 2009 issued by the Government Accountability Office, which is respected highly for its objectivity, none of the high speed rail projects that it examined in other countries (Francs, Germany, and Japan) covers its costs.  All of them require a substantial government subsidy, although it takes a variety of forms and is not always transparent.  Some of them cover their operating costs, although the accounting follows different standards than the standards in the U.S.  The accounting for the French system, as I pointed out in a previous post, is a bit dodgy.  The Sunset example was intended to show that there is scant justification for subsidizing any form of transport.  Assuming that you pay federal income taxes, your taxes paid for 2/3rds of my trip, which included a $27.39 subsidy to ride from LAX to San Diego.  The Pacific Surfliner corridor is a much denser corridor than the North Carolina - Virginia corridors, but it still requires an operating subsidy of 10.7 cents per passenger mile.  If Amtrak cannot cover its operating costs between LAX and San Diego, what makes you think that it can cover its costs in North Carolina?  Or Illinois for that matter? If Atlanta's Hartsfield had only two flights a day, it would be in deep financial trouble.  It doesn't!  The analogy does not make any sense.
Tags (Optional)
Tags are keywords that get attached to your post. They are used to categorize your submission and make it easier to search for. To add tags to your post type a tag into the box below and click the "Add Tag" button.
Add Tag