The removal of the diner from the Silver Star appears to have been a major factor in producing a significant cost savings for the train in FY16.
The operating loss for the Silver Star, based on total revenues, before depreciation and interest, decreased by $10.9 million or 4.1 cents per passenger mile between 2015 and 2016. The operating loss for the Silver Meteor decreased by $1.8 million or .3 cents per passenger mile.
The operating loss per passenger mile for the Silver Star in FY16 was 17 cents; the loss per passenger mile for the Silver Meteor was 15.2 cents. In 2015 the loss was 21.2 cents per passenger mile for the Star vs. 15.5 cents for the Meteor.
In FY16 the operating losses for the long distance trains decreased by $19.6 million or .5 cents per passenger mile compared to FY15.
Sleeping car passengers on the Silver Star increased from 32,703 in FY15 to 35,151 in FY16 or 7.5 percent. Sleeping car ticket revenues decreased from $8,089,017 to $7,124,882 or 11.9 percent.
During the same period sleeping car passengers on the Silver Meteor decreased from 43,434 to 41,847 or 3.7 percent. Sleeping car revenues decreased from $12,057,773 to $11,678,729 or 3.1 percent.
The total number of passengers on the Silver Star decreased from 383,347 in FY15 to 364,271 in FY16 or 5 percent. Ticket revenues decreased from $33,108,142 to $29,261,496 or 11.6 percent. The decrease in ticket revenues for the Star was $3,846,646, including a $964,135 reduction in sleeping car fares, which was more than offset by the $10.9 million reduction in operating costs. Some of the operating costs, however, are non-cash items, whereas the ticket revenues are cash items.
The total number of passengers on the Silver Meteor decreased from 346,097 in FY15 to 339,407 in FY16 or 1.9 percent. Ticket revenues decreased from $38,455,934 to $36,652,426 or 4.7 percent.
The average sleeping car fare on the Silver Star in FY16 was $202.69. The average fare for a sleeper on the Silver Meteor was $279.08.
The average fare for all passengers on the Silver Star in FY16 was $80.33. The average fare for the Silver Meteor passengers was $107.99.
If the trends for the Silver Star experiment continue, Amtrak may have found a better financial and service model for the Florida trains. It may be applicable to some or all of the other long distance trains.
Rio Grande Valley, CFI,CFII
Costs down on the Star, but traffic too -- by more than on the Meteor. What a triumph!
I missed identification of the Star savings with elimination of the diner, in whole or in part.
dakotafredCosts down on the Star, but traffic too -- by more than on the Meteor. What a triumph!
But he said the sleeping-car patronage was UP on the Star, which is the only part of the patronage that counts with unavoidable dining-car losses ... or is where we'd most expect to see passenger loss (to the Meteor, perhaps) if the legacy dining car service were important to large numbers of sleeping-car passengers.
Note that a significant reason for the increase in sleeper passengers was 'lower fares', which if I recall correctly were in large part a direct result of stopping the built-in dining-car "subsidy" in the sleeper fares.
I'm surprised nothing was made of the latter point, explicitly, in justification of the diner 'experiment' and its likely extension to other routes. It's the combination of lower costs without the diner, and lower fares reflecting this leading to presumably greater sleeping-car patronage, that was the initial premise given for the experiment, and it would appear fair to me that the data given would substantiate that idea.
I do not know whether the 'non-sleeper' traffic loss can be attributed in part to the absence of dining-car service; in fact, I don't know if Amtrak keeps separate statistics for meals served as part of sleeper accommodations vs. to other passengers. But I find it unlikely that the necessary large number of 'disappearing' coach passengers would make the decision not to travel on Amtrak simply because diner meals were not being served.
dakotafred Costs down on the Star, but traffic too -- by more than on the Meteor. What a triumph! I missed identification of the Star savings with elimination of the diner, in whole or in part.
Establishing cause and effect can be challenging.
If there was only one major change in an operation, ie. removal of the dining car from the Silver Star, as opposed to multiple changes, ie. schedule changes, equipment configuration changes, etc., a reasonable conclusion is that the removal of the dining car from the Silver Star was the major driver in reducing the train's operating expenses in 2016.
An important hint that dropping the dining car from the Silver Star was the most significant factor in reducing the expenses of the Star is shown in the Other Post Employment Benefits expense, which is driven by the number of employees. The OPEB expense for the Silver Star declined by more than $700,000 in 2016, probably as a result of the elimination of the dining car employees.
Amtrak creates a ticket for every passenger who eats in the dining car on the long distance trains. It knows the percentage of passengers that come from the coaches and the percentage of passengers that come from the sleepers.
As far as I can tell, however, they don't make these numbers public.
While the Star's operaring loss dropped considerably to 17 cents per passenger mile, that is still higher than the Meteor's at 15.2 cents per passenger mile. Obviously there is more to the story than just dining car costs.
MidlandMike While the Star's operaring loss dropped considerably to 17 cents per passenger mile, that is still higher than the Meteor's at 15.2 cents per passenger mile. Obviously there is more to the story than just dining car costs.
Both trains probably incurred lower fuel espenses, but I doubt lower fuel expenses were a major driver in the $10.9 million reduction in the Star's expenses.
If there is more to the story than just the elimination of the expenses associated with the dining car, the challenge is to identify he other variables from Amtrak's verifiable data.
What the numbers tell us suggests that removal of the dining car from the Star, coupled with a reduction of sleeper class fares, was the major expense reduction driver. But there could have been others.
Maybe removal of the diner, along with a coach due to lower coach volumes, made it possible to run the train with just one locomotive. I don't know. However, even if removal of the diner resulted in a reduction in the number of coaches pulled and the number of locomotives required to pull the train, the initiating change driver probably was the removal of the dining car, unless we can get some verifiable data that other variables played a major role in the expense reduction outcomes.
RME dakotafred Costs down on the Star, but traffic too -- by more than on the Meteor. What a triumph! But he said the sleeping-car patronage was UP on the Star, which is the only part of the patronage that counts with unavoidable dining-car losses ... or is where we'd most expect to see passenger loss (to the Meteor, perhaps) if the legacy dining car service were important to large numbers of sleeping-car passengers. Note that a significant reason for the increase in sleeper passengers was 'lower fares', which if I recall correctly were in large part a direct result of stopping the built-in dining-car "subsidy" in the sleeper fares. I'm surprised nothing was made of the latter point, explicitly, in justification of the diner 'experiment' and its likely extension to other routes. It's the combination of lower costs without the diner, and lower fares reflecting this leading to presumably greater sleeping-car patronage, that was the initial premise given for the experiment, and it would appear fair to me that the data given would substantiate that idea. I do not know whether the 'non-sleeper' traffic loss can be attributed in part to the absence of dining-car service; in fact, I don't know if Amtrak keeps separate statistics for meals served as part of sleeper accommodations vs. to other passengers. But I find it unlikely that the necessary large number of 'disappearing' coach passengers would make the decision not to travel on Amtrak simply because diner meals were not being served.
dakotafred Costs down on the Star, but traffic too -- by more than on the Meteor. What a triumph!
Looks like the experiment on the Star is a success, at least based on the numbers provided. It should be tried on another one-night LD route in 2017.
C&NW, CA&E, MILW, CGW and IC fan
JPS1 Amtrak creates a ticket for every passenger who eats in the dining car on the long distance trains. It knows the percentage of passengers that come from the coaches and the percentage of passengers that come from the sleepers. As far as I can tell, however, they don't make these numbers public.
In the Monthly Performance Report, they do list sleeper class only ridership and revenue. You could go back and subtract from total ridership and revenue.
But NARP breaks down the numbers (FY 2015) in more detail: (https://www.narprail.org/site/assets/files/1038/trains_2015.pdf)
Each LD train has ridership separated between coach and sleeper.
Examples:
Silver Meteor:
Coach Sleeper Total
Passengers 298,592 43,407 341,999
Average trip 583 miles 942 miles 629 miles
Average fare $ 87.00 $278.00 $111.00
Lake Shore Limited:
Passengers 314,449 38,555 353,004
Average trip 443 miles 721 miles 473 miles
Average fare $ 60.00 $247.00 $ 80.00
Southwest Chief:
Passengers 299,214 63,785 362,999
Average trip 783 miles 1382 miles 888 miles
Average fare $ 82.00 $315.00 $123.00
By percentage:
SWC: 17.6% of passengers are sleeper
SM: 12.7% of passengers are sleeper
LSL: 10.9% of passengers are sleeper
So you expect between 10-20% of Amtrak passengers use sleeper service. Based on these three, the longer the potential ride the more likely a passenger will use sleepers.
The numbers I posted are for 2016, which was the first full year of operating the Silver Star without a dining car.
The financial performance of the Silver Star in 2016 improved significnatly compared to that of the Silver Meteor.
In 2016 the Star carried 24,864 more passengers than the Meteor. This number was impacted by the increase in sleeper passengers offset by a decline in coach passengers.
In 2016 9.6 percent of the Star's passengers rode in a sleeper compared to 12.3 percent for the Silver Meteor.
Between 2011 and 2016 sleeper passengers made up an average of 14.9 percent of long distance passengers and 2.1 percent of system passengers.
Sleeping car passengers pay more per passenger mile than coach passengers. Whether they cover the fully allocated cost of their ride is unknown, or at least Amtrak does not publish the numbers.
According to the only study that I have seen regarding subsidies for long distance passengers, which was published by the DOT IG in 2005, sleeper class passengers required a higher subsidy than coach passengers. Whether this dynamic still holds is unknown.
It might be interesting to compare FY16 to Fy14, if data is available. The "no diner" experiment started in July 2015, which causes 3 months of savings in FY15 or about $2.7 million. Adding this to the $10.9 million gives an actual savings of about $13.6 million, which should be seen when comparing to FY14. Fuel savings is not significant, as you stated. If we knew how many diner staff were deleted, we could figure that saving. Subtracting that from the total savings should give a number for cleaning, stocking, maintenance, overhaul of diner and percentage of locomotives, fuel, food, and administration, etc. This could be further broken down by selectively using percentage of total expenditures.
In the 2005 IG report they state that sleeper car passengers eat a little more than half of all the meals from the diner. Thus coach passengers are a little less than 50% of the diner customers.
Jim200 It might be interesting to compare FY16 to Fy14, if data is available.
It might be interesting to compare FY16 to Fy14, if data is available.
NARP Data, FY 2014
https://www.narprail.org/site/assets/files/1038/trains_2014.pdf
Philly Amtrak Fan Jim200 It might be interesting to compare FY16 to Fy14, if data is available. NARP Data, FY 2014 https://www.narprail.org/site/assets/files/1038/trains_2014.pdf
A better comparison, I believe, would be to wait until 2017 is in the books, and then see whether the trend that developed in 2016, which was the first full year of the experiment, continues.
Most corporate planners like to see at least two or more years of data to determine if a trend will stick. They also like to see a full calendar cycle that incorporates seasonal changes, etc.
The most important point, at least from my perspective, is the Silver Star saw a significant reduction in its operating costs in 2016. The only identifiable event I can think of that triggered the reduction was the elimination of the dining car and the corresponding reduction in sleeper class fares.
Hopefully Amtrak will stick with the experiment long enough to see whether one of its long distance trains sans the dining car has market staying power.
JPS1 Hopefully Amtrak will stick with the experiment long enough to see whether one of its long distance trains sans the dining car has market staying power.
One factor I don't see referenced is that the Silver Meteor serves eastern parts of the Carolinas that have, I believe, somewhat more people. How does this affect the calculations?
A McIntosh One factor I don't see referenced is that the Silver Meteor serves eastern parts of the Carolinas that have, I believe, somewhat more people. How does this affect the calculations?
I would think the Star serves more people when it comes to North Carolina as it serves Raleigh which is one of the largest cities in the state (2nd to Charlotte). All you have in Eastern North Carolina is Rocky Mount and Fayetteville.
Looking at the 2010 census numbers, the Star serves seven Carolina cities that the Meteor does not serve, with a toal population of 674,615. The Meteor serves five Carolina cities that the Star does not serve, with a total population of 365,440. The population of Raleigh alone (400,892) is greater than that of all of those places that the Meteor serves. Cary (Kerry) alone had a population of 135,234--almost as much as that of Charleston, and Columbia had 9,000 more inhabitants than Charleston had.
Johnny
Deggesty Looking at the 2010 census numbers, the Star serves seven Carolina cities that the Meteor does not serve, with a toal population of 674,615. The Meteor serves five Carolina cities that the Star does not serve, with a total population of 365,440. The population of Raleigh alone (400,892) is greater than that of all of those places that the Meteor serves. Cary (Kerry) alone had a population of 135,234--almost as much as that of Charleston, and Columbia had 9,000 more inhabitants than Charleston had.
blue streak 1 Deggesty Looking at the 2010 census numbers, the Star serves seven Carolina cities that the Meteor does not serve, with a toal population of 674,615. The Meteor serves five Carolina cities that the Star does not serve, with a total population of 365,440. The population of Raleigh alone (400,892) is greater than that of all of those places that the Meteor serves. Cary (Kerry) alone had a population of 135,234--almost as much as that of Charleston, and Columbia had 9,000 more inhabitants than Charleston had. Maybe that is the reason the STAR is selling out WASH <> SAV quicker than the Meteor ? But that route also served by Palmetto.
I'm suprised both the Meteor and Star are still running, Dosen't one of those trains have a heritage diner or have those been replaced by newer equipment?
They both still operate, the meoter with a diner, the star with no diner. They both operate on slightly different routes. The star takes a little longer to make her entire NYC to Mia route due to the fact she goes to Tampa as well, stopping twice in Lakeland. The star operates NYC to TPA, then Tampa to Mia, thur the wye in Lakeland.
The Meteor is faster and has a better time slot in NYC causing it to more easily gather people from farther afield such as western New York and Boston. It is also great for the weekend for those who can work Friday morning, take the afternoon off, and get a head start on a vacation, to see family, or to go fishing, golfing, or whatever. Returning to NYC is also convenient. NYC to Orlando has the most passengers, use the most sleepers, and returns the most revenue. Washington DC to Orlando is #2, followed in revenue by NYC to: Jacksonville, Charleston, Miami, and Savannah,(2013 data, to includes to/from).
The Star gathers a lot of its passengers from Florida with the first 6 city pairs for ridership being Tampa to: Miami, West Palm Beach, Orlando, Fort Lauderdale, Hollywood, and Deerfield Beach in that order. This is followed by NYC to: Orlando, Richmond, and Tampa. However, the most revenue is received from NYC to Orlando, followed by NYC to Tampa. Tampa to Miami is#3, followed by NYC to: Richmond, Columbia, Raleigh, and Jacksonville in that order,(2013 data).
Activity by station in 2013 for the Meteor is Orlando 95,720, New York City 89,720, Jacksonville 52,437, Washington DC 45,977, Miami 38,627, Charleston 37,848, Savannah 34,664, West Palm Beach 31,517, Fort Lauderdale 26,356, Philadelphia 25,527, and Kissimmee 24,886. The Meteor steadily gained 84,400 passengers from 2007 to 2012 with a high of 368,300. Since then it has lost 26,300 passengers in 2015 with 342,000. Station activity has been lost in all of the cities above except for New York City with Philadelphia nearly steady.
The Star has some station activity different and some the same. The numbers in 2013 are Tampa 133,355, New York City 62,208, Orlando 58,567, Miami 42,132, Jacksonville 41,194, Raleigh 40,037, Washington DC 38,973, Columbia 35,878, West Palm Beach 31,405, Cary 27,906, Richmond 27,739, Fort Lauderdale 25,992, Philadelphia 22,918, Lakeland 22,621, and Kissimmee 20,020. For comparison purposes, Savannah is further down the list with 9,514. The Star steadily gained 95,100 passengers from 2007 to 2012 to a high of 416,800. Since then it has lost 38,000 passengers in 2015 with 378,800. Station activity has been lost in some of the above cities with gains for New York City, Richmond, Cary, and Raleigh, and with Philadelphia and West Palm Beach holding steady.
FY2016 has not changed the downward course for the Star or the Meteor, but the Star has made a significant overall financial improvement.
As well as fewer passengers there is also a reduction of PM / TM
The largest cost reduction I could see from dropping the Heritage (Budd) diners was $4.560 Million a year if all (3) three diner staff members are displaced along with the physcial car (See Appendix).
The cost estimated is conservatively high however, and if the difference is only (2) two staff members, with another staff member augmenting the café assignment, there would likely only be $3.810 Million of cost avoidance. However, I suspect the large cost savings in the reports are an artifact of the assignment of cost by a dependent variable, either from the commissary or pool, not so much true efficiency.
The $3.846 Million revenue drop is close to a wash with what is likely the true $4ish Million cost savings from the elimination of the diner.
While the sleeper revenue declined by $0.964 Million, or about $47 per passenger, note that the overall coach revenue declined by $2.822 Million as well (perhaps with a portion of the coach revenue for sleeper passengers baked into the coach numbers).
So the elimination of the diner is hurting coach revenue as well, which makes sense as about half the diner patrons on longer runs like this are coach passengers. The flooding also had an effect if you care to filter that out by comparing the Meteor runs.
This all goes to show that there are limits to cutting as a way to improve financial performance. Increased passenger volume and segmentation of the market with higher price points for better amenities are typically better solutions.
Adding just (2) two all bedroom sleepers per each Meteor and Star trainset, pulling in $0.80/room-mile, would increase net revenue by $18 Million a year ($9 Million each) by my estimate for the pair of trains. It would also provide more traditional revenue (walks in that buy and then tip) for food and bar service, moving those services closer to break even. More volume supports better station services and rental car availability and then provides enough stock to sell true same week purchase high dollar fares.
Appendix – Check on Cost Savings claimed by NRPC for Silver Star FY16 vs. FY15:
Assuming the US average full time wage x 142 % the labor cost might be $1.815 Million a year (20 hours paid per one-way trip if correct).
Assuming $2000 per trip for the cost of goods sold for a cost of $1.461 Million a year.
Assuming that the staff is based from NYC the Miami layover cost might be $0.132 Million a year. If they were Miami based, then a step-off agreement near NYC would allow for a same day turn back.
Finding $1.151 Million a year in car related maintenance cost:
1. Using 0.2 gallons of diesel a car-mile from the Davis equation, acceleration energy, and HEP energy x $2 gallon (no road tax)
2. Using $0.35/car-mile for a prorating of overhauls and $0.27/car-mile for routine servicing and repairs.
While I think it's important for long-distance trains to have adequate food service options (i.e., more than a snack bar), I also like the idea of separating meal payments from sleeping care fares. Not only does this give passengers a choice, it would also make it easier to evaluate each service on its financial merits.
I hear New Jersey. Without a diner, a LD train is just a bus on rails. No reason for its existence. There are already plenty of buses.
dakotafred I hear New Jersey. Without a diner, a LD train is just a bus on rails. No reason for its existence. There are already plenty of buses.
A long distance train without food service is not workable. But most people don't appear to be advocating no food and beverage service; they are advocating scaling the service to the needs of most of the passengers and pricing it to recover the costs.
In 2016 the overwhelming majority of long distance passengers – 84.9 percent – rode coach. I suspect most of them would be happy with enhanced offerings in the lounge cars.
Amtrak's IG found that from 2006 through 2012, Amtrak's food and beverage service had $609 million in direct operating losses, or an average annual loss of $87 million. More than 85 per cent of the loss can be traced to the long distance trains.
What is the moral imperative for the taxpayers to underwrite the cost of train meals, especially for sleeping car passengers? They appear to be the majority of passengers in the dining cars, in large part because their high priced sleeping accommodation fares include meals in the dining car.
I can make a case for taxpayer subsidizes for passenger rail, including some long distance services. But justifying taxpayer subsidizes for food and beverages on the trains is not supportable.
On occasion I take the bus from El Paso to Tucson and vice versa. We stop in Lordsburg for a brief meal. The taxpayers are not picking up the tab for my meal at the bus stop.
In the original post two primary errors were made:
1. Amtrak does not state that the reduction in costs are soley or even largely from the removal of the diner. $10+ Million in avoided costs for this action is nonsensical as shown by the back check above. It appears to be a dependent variable error.
2. Previous reports (PRIAA 2011) show that coach passengers make up about half of the diner patrons on the eastern long distance routes, whose preference for a diner is evidenced by the decline in coach revenue representing more than 2/3rds of the revenue decline.
We as a nation pay for automobile operating costs, such as the serious medical costs of a drunken driver's accident, sometimes requiring decades of care, costing far and above any fuel taxes ever collected, but fresh toast and an omlet to induce that same person onto a safer train is off limits? We can't have anything nice as all the funds have to be sacrificied to the unquestionable automobility idol after all.
The larger story is that the elimination of the Silver Star diner was not mentioned at all as a net revenue improvement in the studies under PRIIA while various activities proposed to increase revenues were not undertaken. It seems that the realistic cost avoidance is pretty close to the revenue drop, aka no apparent net improvement. Have we even talked about the costs of layoffs and bumps?
So why are no actions taken to increase revenue or sensibly reduce costs such as by step-off food service staff agreements?
Here were the benefits identified 5 YEARS AGO for the Viewliner II order that would improve this train far beyond the sillyness.
Page 85 PRIIA 2011 Report
"New dining cars on order will allow Amtrak to:
o Operate long-distance trains at up to 125 miles per hour (mph) on the Northeast Corridor...
o Implement cart-based galley equipment that increases operating and mechanical efficiency in the yard and commissary.
o Improve accommodations for disabled customers.
New sleeping cars on order will allow Amtrak to:
o Increase sleeper capacity on single-level trains, which frequently sells out today, to accommodate demand and improve financial performance.
o Improve the economics of on-board food service by generating additional food and beverage revenue from a greater number of passengers carried."
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