The Crescent lost 26.1 cents per passenger mile in FY12 before depreciation, interest, and miscellaneous charges. The Lake Shore Limited lost 16.2 cent per passenger mile, and the Silver Star lost 20.9 cents per passenger mile.
I have glanced at all the PRIIA studies. And I read in-depth the studies for the Texas Eagle, Sunset Limited, Pennsylvania Service Studies, and the Capitol Limited. The PRIIA studies recommended improvements that might have reduced the losses associated with the long distance trains, but they did not eliminate them. And we are talking just about the operating losses.
If the Crescent, as an example, were able to cut is losses by 25 per cent, based on FY12 numbers, it would still have lost $31.7 million before capital charges. Here is a better, real life example. Between FY09 and FY12 the number of passengers on the Texas Eagle increased 29.8 per cent. Revenues were up 33.2 per cent. The change was due in part to the fact that the Eagle added a third coach south of St. Louis and opened up eight rooms in the transition sleeper for sale. Unfortunately, operating losses on the train increased by 35.2 per cent. They were $9 million more in FY12 than FY09. These are not theoretical numbers. They are audited numbers taken from Amtrak's records.
A service that losses $31.7 million a year before capital charges, whilst being operated by the railroad that pays no taxes, only nominal or no station rents in most locations, and only the marginal cost of carrying its trains by its host carriers ,does not strike me as being a financially viable result.
To the best of my knowledge, with the possible exception of some tweaking, no major changes have been implemented as a result of the PRIIA studies. If the teams had developed compelling recommendations, Amtrak probably would have been able to take them to Congress and have them blessed. Or it might have been able to convince private interests to invest in the additional equipment to increase the capacity on the long distance trains.
Amtrak can borrow money, and it can organize leases. It does not need Congressional approval for every equipment acquisition. However, if the marginal cost of the increased capacity is not covered by the marginal revenues, selling the notion of additional equipment to commercial lenders has a low probability of being successful. It does not appear that Amtrak has a compelling case for increasing the capacity on its long distance trains.
With respect the PRIIA studies that I reviewed, I did not seen an in-depth discussion of the methodologies (market studies, regression analyses, etc.) that were used by the teams for their projections. In addition, I did not see where the processes and outcomes had been audited and stress tested by an independent, objective third party. In the large organizations that I worked for that was and is standard procedure for capacity expansions.