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HOW DO LONG-DISTANCE TRAINS PERFORM FINANCIALLY?

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Posted by charlie hebdo on Wednesday, January 27, 2021 12:10 PM

There have been serious proposals/studies by UI transportation department a few years ago to convert the old IC mainline into HSR (170 mph) south in Illinois to Chambana with branches over to Indy and StL. among other locales. 

I suppose the Mississippi Valley is different than other corridors?  St.  Louis all the way to New Orleans is ~670 miles via Interstates, ~10 hours vs over one day on bus + Amtrak or bus alone. Memphis and Jackson are the major intermediate population centers.  Feasible?  Useful? 

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Posted by Overmod on Wednesday, January 27, 2021 11:17 AM

charlie hebdo
One would think linking St. Louis more directly with Memphis and points south would be a potential corridor,  as long as the trains entered the 21st century in frequency and overall speed. 

The problem is that there's currently no corridor-level traffic south of Memphis at least as far as Jackson, and while there is certainly a large potential demand for 'commuter' rail between the burgeoning development 'south of the border' in DeSoto County and whatever is cooking in the Tunica area, concentrating on one of the routes and not the other leaves many potential communities unserved, but perhaps not enough aggregate demand to serve both with anything larger than bus-sized.  There is also the concern between allocating subsidy between Mississippi and chronically cash-strapped far southwest Tennessee.  

I'm not sure what the traffic between Memphis and St. Louis would actually develop into with faster rail service, but it is inadequate to support more than a stop on the longer bus routes from Memphis to Chicago -- themselves now suspended in the pandemic, so likely not that grand.  This with the inherent number of communities accessible on the 'west bank' route of I-55; with the completion of I-269/69 north out of Tennessee toward Indianapolis, many of the communities served south of Carbondale may likewise be better served by buses to more disparate points as well as St. Louis directly (from whence HSR via tha Alton corridor might be expediently also reached)

If I recall correctly the rail connection from Carbondale across to St. Louis proper is about 61 miles, a bit too short for true HSR except if the equipment turns and continues, almost certainly north to continue in Illinois and not south to other states.  I'd argue that a high-quality shuttle operation, perhaps with multiple railcars timed to meet different services, would be of greater value than 'one-seat' trains on a less frequent schedule, especially if they turned south.

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Posted by JPS1 on Wednesday, January 27, 2021 10:45 AM

CMStPnP
Nobody complains about coach fares. 

 

Here is a hint why they may not complain. 

For coach class travel from NYC to Chicago on the Lake Shore Limited, a seat would be $90 for travel on February 17th.  From Washington to Chicago on the same date, the fare would be $84.  The fares change frequently, and they probably are lower than usual because of the pandemic. 

 
In 1957, the year that I graduated from high school, a one-way coach ticket on the PRR from NYC to Chicago was $34 (rounded).  Washington to Chicago was $29 (rounded).  When adjusted for inflation, using the Bureau of Labor Statistics CPI calculator, today the fares would be $321 from NYC to Chicago and $274 from Washington to Chicago. 
 
Amtrak would have to increase the price of a coach class ticket from NYC to Chicago 3.6 times and from Washington 3.1 times to be on a par with the coach fares in 1957. 
 
Fare comparisons would be different for intermediate stations to either end point station, but the picture is clear.  There are not enough people in the United States that are willing to pay a fare to cover the cost of the long-distance trains irrespective of whether they ride coach or sleeper class. 
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Posted by JPS1 on Tuesday, January 26, 2021 8:31 PM

GERALD L MCFARLANE JR

Rule #1, NEC costs should only be applied to NEC corridor trains...period, and not spread out amongst the whole system(as has been proven several times by a few state agencies that have looked at the numbers). 

The states contract with Amtrak to operate the state supported trains, e.g., Oklahoma and Texas have a contract with Amtrak to operate the Heartland Flyer.   
 
The states don’t have any direct involvement with the long-distance trains.  Their concern is the state supported trains.  If the states believe a disproportionate percentage of shared costs, i.e., stations, reservation centers, etc., are being allocated to the long-distance trains, they are not likely to squawk.  They would raise the issue if it is the other way around. 
 
No contract is perfect. The contracting parties often times interpret the terms differently.  To help reduce the potential for conflict, Amtrak and its state partners created the State-Amtrak Intercity Passenger Rail Committee (SAIPRC).  It brings the parties’ contract managers together to deal with a variety of issues. 
 
The notion that Amtrak arbitrarily allocates a disproportionate percentage of shared costs to the state supported trains is or vice versa not correct.
 
Five long-distance trains run on the NEC between New York City and Washington, D.C.; two other long-distance trains use joint facilities in NYC.  They are allocated costs associated with using the NEC.  It is the appropriate accounting treatment.   
 
The costing methodology for allocating NEC costs was developed pursuant to Section 212 of the Passenger Rail Investment & Improvement Act of 2008 (PRIIA).  
 
The long-distance trains that come in and out of NYC are serviced at Sunny Side Yard.  Yard crews switch cars in and out of trains as well as provide a variety of services.  The costs driven by these activities are allocated based on the number of locomotives, cars, etc. serviced and/or moved.  More cars mean more costs are allocated to a train. 
 
There is no evidence that the costs allocated to the long-distance trains along the NEC are improper. 
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Posted by CMStPnP on Tuesday, January 26, 2021 6:32 PM

JPS1
Why doesn’t Amtrak raise the average price of its tickets to at least cover the operating costs of the long-distance trains? 

They should I'll bet with the old inflation calculator exercise again we might find coach ticket prices cheaper today then they were when the Private Railroads were running the business.   Same deal with dining car meals.     I think the marketing of Amtrak is the problem, it was originally setup by Congress to attract the max amount of riders possible vs a specific rail clientel.    So pricing and marketing was simplified and the striations of all the different add-ons the Private Railroads had disappeared into just Coach Class and First Class.   No extra charge for Parlor,  Full Service Lounge car with bartender is gone,  seems to me I remember a lot more price levels for sleeping accomodations also different price levels between a premium train like the Super Chief and a non-premium train like the El Capitan.

All that is gone with Amtrak.

So First Class Sleeping Car Accomodations are not quite up to standard with those that would be willing to pay money for them and Coach Class could be made better and a higher ticket price charged there vs the Greyhound Bus approach on rails they use with Coach now.   Just listen to the complaints in this Forum.   Deluxe Sleeper is too expensive,  Economy Sleeper is too expensive.    Nobody complains about coach fares.

 

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Posted by Gramp on Tuesday, January 26, 2021 5:23 PM

 Re: St Lou. Before trying to knit together any additional cities with trains or new routes, why not look at interstate highway/depot connections.  Got to be easy to get to and from trains. Make it the path of least resistance from and to homes. Example: I270/hwy203 exit area Illinois side northeast St. Lou. on the StL-Chic. Route. Eliminate time eating, slow running into dangerous downtown for thousands along 270 belt around StL. Alton, Il. Station is too far off the beaten track. 

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Posted by charlie hebdo on Tuesday, January 26, 2021 3:51 PM

One would think linking St. Louis more directly with Memphis and points south would be a potential corridor,  as long as the trains entered the 21st century in frequency and overall speed. 

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Posted by Overmod on Tuesday, January 26, 2021 3:41 PM

charlie hebdo
Would that be a revival of the IC's connection to the Panama, CNO etc.? 

I'd hope so too; there's no reason why communities to the south (perhaps including Memphis) shouldn't share in the enhanced Chicago traffic.  But I was thinking more of the Carbondale to Chicago as an Illinois corridor, and the greater share of the St. Louis connection would be 'new' Illinois mileage as well -- but the city deriving much of the 'benefit' is Missouri, and the southern communities are Kentucky, Tennessee, etc.

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Posted by charlie hebdo on Tuesday, January 26, 2021 1:49 PM

Overmod

 

 
charlie hebdo
Can you think of some feasible alternative routing for St. Louis trains so that larger suburban populations could be better served?

 

I'd like to see enough growth on the Chicago-Carbondale service that could justify a dedicated trip with a full train (or vastly better bus than the execrable Thruway) over to St. Louis.  The logic of having "two" reasonably high-speed St. Louis to Chicago services seems just as valid as the case for the EB in connecting more intermediate communities together and to the major-market endpoints.

 

 

Would that be a revival of the IC's connection to the Panama, CNO etc.? 

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Posted by Overmod on Tuesday, January 26, 2021 1:02 PM

charlie hebdo
Can you think of some feasible alternative routing for St. Louis trains so that larger suburban populations could be better served?

I'd like to see enough growth on the Chicago-Carbondale service that could justify a dedicated trip with a full train (or vastly better bus than the execrable Thruway) over to St. Louis.  The logic of having "two" reasonably high-speed St. Louis to Chicago services seems just as valid as the case for the EB in connecting more intermediate communities together and to the major-market endpoints.

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Posted by charlie hebdo on Tuesday, January 26, 2021 12:10 PM

I recall seeing something about major changes at the Joliet Union Station.  

The SW and south suburbs have never been very familiar to me so I don't know where the growth is.

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Posted by CSSHEGEWISCH on Tuesday, January 26, 2021 11:57 AM

One alternative that gets kicked around periodically is using the former Rock Island route north and east of Joliet.  Blue Island could serve as a suitable intermediate stop.  A major downside is that it would require new platforms at Joliet east of the existing station and a connecting track at Englewood to get into CUS.

The daily commute is part of everyday life but I get two rides a day out of it. Paul
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Posted by charlie hebdo on Tuesday, January 26, 2021 11:22 AM

CSSHEGEWISCH

Since Charlie Hebdo asked for some input on the St. Louis route, I see that it follows the former Alton route which unfortunately goes through a fair amount of undeveloped areas.  Metra's Heritage route has only three round trips and four intermediate stations on this route.  Lemont might work but it isn't close to any population areas.

 

Thanks for your response.  Can you think of some feasible alternative routing for St. Louis trains so that larger suburban populations could be better served? There is a lot of growth around Plainfield area so maybe Joliet still makes sense.  

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Posted by JPS1 on Tuesday, January 26, 2021 10:14 AM

GERALD L MCFARLANE JR
...you can't tell me that a LD train can't make it's ABOVE THE RAIL costs from revenue alone, which is essentially all they should be looking at.  

In FY20, for route breakeven operations, Amtrak would have needed to raise the average ticket price per long-distance train rider or ticket by $241.  The average increases per rider would have been $9 for the state supported trains and $1 for the NEC.  Due to the pandemic FY20 was an aberration. 
 
In FY19 the average ticket price per rider on the long-distance trains to breakeven on operations would have needed an average boost of $104, while the average for the state supported trains would have been an average increased by $4.  The NEC had an average operating profit of $45 per rider.
 
In FY18 the numbers would have been an average of $120 for the long-distance trains compared to $6 for the state supported trains.  The NEC had an average operating profit of $43 per rider. 
 
Why doesn’t Amtrak raise the average price of its tickets to at least cover the operating costs of the long-distance trains?  It does not have the marketing power to pull it off.  Unless the cost structure is changed significantly, i.e., labor costs are reduced, the long-distance trains will never come close to covering their operating costs. 
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Posted by CSSHEGEWISCH on Tuesday, January 26, 2021 10:06 AM

Since Charlie Hebdo asked for some input on the St. Louis route, I see that it follows the former Alton route which unfortunately goes through a fair amount of undeveloped areas.  Metra's Heritage route has only three round trips and four intermediate stations on this route.  Lemont might work but it isn't close to any population areas.

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Posted by CMStPnP on Tuesday, January 26, 2021 10:03 AM

GERALD L MCFARLANE JR
I can guarantee you it can be done, without getting rid of any types of service and bringing back real cooked food...but you need to know the exact numbers for each and every expense before figuring out what your ticket prices would need to be.  

OK so for the Dining Car then every item produced by the kitchen the average labor cost per item has to be between .20 cents and 33 cents.    Higher than that and your over budget for labor.    Additionally, staffing of the car is a valley and peak schedule of hours with the peak of all hands on deck at dinner service time and the valley in between meals.    Which of course means some will put in a full days work and others will not.

Using the term home cooked meals could get you into legal trouble because commercially sold meals have to be made in commercially inspected and approved kitchens.    At some point you need to also draw the line of where the cook from scratch stops.    For example would you make your own gravy?   Broth for soup?   Make your own Ketchup? Mayo? Mustard?    How much food will you accept as packaged and how much are you going to make.

Your going to need a practiced chef as well to support and approve the menus.   Because of limitations of onboard storage cold and freezer space, your going to have to consolidate ingredients and only pick ingredients that can be used in serveral dishes on the menu.   Plus you need a skill only chefs have if your going to offer items cook to order or allow subtractions/additions from ingredients which happens a lot with the public if you specify made from scratch.     Also consider with lets say an average Amtrak Passenger Load of say 150-200 passengers.    They are all going to want to eat in your dining car fo all three meals.    Not likely and consquently the most important item, headcount for each meal will probably will fall far short of break even for your fixed costs.

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Posted by JPS1 on Monday, January 25, 2021 10:30 PM

OK!  Passenger Miles.

In FY20 the long-distance trains had an operating loss per passenger mile of 46 cents compared to 7 cents for the state supported trains and 1 cent for the NEC. 

In FY19 the long-distance trains had an operating loss per passenger mile of 19 cents compared to 3 cents for the state supported trains and an operating profit of 28 cents for the NEC.  

Assuming the NEC wears 70 percent of Amtrak’s capital expenses, i.e., depreciation, interest, etc., with the remainder split evenly between the state supported and long-distance trains, which is just a guess, the fully allocated losses in FY20 would have been 56 cents per passenger mile for the long-distance trains compared to 21 cents for the state supported trains and 65 cents for the NEC. 

In FY19 the fully allocated loss per passenger mile would have been 25 cents for the long-distance trains compared to 10 cents for the state supported trains and 2 cents for the NEC. 

Operating results consist of operating revenues offset by operating expenses stated in current dollars.  OTOH, fully allocated costs include the amortization of historic dollars, which have not been adjusted for inflation, offset in part by current dollars.  They are somewhat distortive.  This is the reason Amtrak, as well as most other corporations, do not allocate capitalized charges to product and service lines in their public financials. 

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Posted by MidlandMike on Monday, January 25, 2021 8:12 PM

charlie hebdo

 

 
MidlandMike

 

 
 

 

Since the LD trains generate about 40% of passenger miles, then doing that with only 29.1% of employees sounds like a good deal.

 

 

 

Passenger miles as a measure of utility is senseless.  It inflates usage, which is the point of a passenger rail service

 It is always used by advocates of LD trains to rationalize their existence.  

What matters is how many people use trains,  not how far they run.  A train coach carrying one person 500 miles is clearly not utilized as much as one carrying five people 100 miles. 

 

Passenger-miles actually completely measures usage.  It's always used by LD advocates because it is the accurate measure, and it tells the whole story.  Number of "passengers" does not measure people, as many corridor passengers are repeat commuters, so you don't actually know how many different people use the service.  Instead it measures number of tickets sold.  In statistics this is called a count.  The total amount of revenue from those tickets would be called the sum, which is also more reflective of passenger-miles.

Also the original point of my post was to answer employee costs as percentage of operating costs, between airlines and Amtrak.  A CHI-LAX flight might take 4 hours, whereas the train takes 2 days.  You are going to have to pay the ATK crew a lot more houres than the flight crew.  You would also have to pay an LD crew more hours than a corridor crew, for the same number of passengers.  Or maybe you think they should be paid the same per trip, since they carry the same number of people.

 

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Posted by charlie hebdo on Monday, January 25, 2021 4:06 PM

Do you have enough spare change to cover that guarantee? 

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Posted by GERALD L MCFARLANE JR on Monday, January 25, 2021 3:18 PM

Rule #1, NEC costs should only be applied to NEC corridor trains...period, and not spread out amongst the whole system(as has been proven several times by a few state agencies that have looked at the numbers).  

Secondly, you can't tell me that a LD train can't make it's ABOVE THE RAIL costs from revenue alone, which is essentially all they should be looking at.  I can guarantee you it can be done, without getting rid of any types of service and bringing back real cooked food...but you need to know the exact numbers for each and every expense before figuring out what your ticket prices would need to be.  

As for the below the track costs, I'd incentivize the RR's to maintain the track routes through tax credits instead of having AMTRAK pay them directly.  Of course, I also think the FRA/STB should put in a regulation stating that an OR of between 65 and 75 is optimal for the best service/financial stability ratio, but that would make Wall Street cry(as well they should).

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Posted by charlie hebdo on Monday, January 25, 2021 2:59 PM

I don't know about other cities,  but barring a route change,  the Chicago suburbs I mentioned earlier seem correct to me.  The only lines that might need research and revision are the routes to St. Louis and LA.  Joliet has always been their stop but it might not be the best choice now.  CSSHegewisch might have an idea. 

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Posted by Overmod on Monday, January 25, 2021 11:21 AM

CMStPnP
Believe it or not this is a common marketing practice.

I'm familiar with the idea; it was used extensively by the Port Authority in the years I was involved with them.  What I don't know is the geography or the neighborhoods, and I don't have the time to carefully review and then masticate the demographic census data to figure out potential customers vs. station relocation costs.

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Posted by charlie hebdo on Monday, January 25, 2021 7:48 AM

MidlandMike

 

 
JPS1
Until 2017 Amtrak’s Monthly Operating Reports showed the number of operating people assigned to each service line, i.e., long-distance, NEC, etc.  In 2016, the last year the information was publicly available, the long-distance trains required 29.1 percent of the operating employees, carried approximately 15 percent of the system passengers, and generated 22.4 percent of the ticket revenues.  And therein lies the problem.  But don’t take my word for it.  You can look it up.

 

Since the LD trains generate about 40% of passenger miles, then doing that with only 29.1% of employees sounds like a good deal.

 

Passenger miles as a measure of utility is senseless.  It inflates usage, which is the point of a passenger rail service

 It is always used by advocates of LD trains to rationalize their existence.  

What matters is how many people use trains,  not how far they run.  A train coach carrying one person 500 miles is clearly not utilized as much as one carrying five people 100 miles. 

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Posted by CMStPnP on Monday, January 25, 2021 4:43 AM

Overmod
For us Chicago-challenged readers, why are these stops important to Amtrak and what alternatives would be practical?

Believe it or not this is a common marketing practice I was surprised when I read it in the MN DOT rail study.    However GM does this yearly to ensure their dealerships are in correct locations to maximize walk-in sales.    Army Recruiting command does it once a quarter to ensure their recruiting stations are in locations that max walk-in recruits.   Basically it involves taking a CENSUS overlay of age and preference demographics and overlaying it onto a map using software such as map info.    You can buy the marketing preference data from University of Michigan and I believe access to Census tracts are free.   Anyways that is how it works technically.    Census tracts are once every 4 years but you can use a bunch  of them from the past to forecast what will likely happen until the next Census tract is released.

Why is it important to Amtrak well the study on an additional Empire Builder freq between Chicago to Milwaukee that the lack of a West Milwaukee station could be costing the corridor between approx 50-80,000 passengers annually (figure off top of my head it was around that range but can't remember the exact range).

Because what they found across other rail passenger studies is a lot of people will not ride the train unless the station is conviently located and easy to use.    In the case of the missing station the drive to Intermodal Station in Milwaukee can take 30-45 min from an outlying suburb and then the rider has to pay to park (which on per daily charge is not cheap).   If the passenger takes a shuttle van the cost can be up to $45-65 per passenger each way.    Taxi is $75-100.   Have not priced Uber or the rest.

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Posted by MidlandMike on Sunday, January 24, 2021 11:02 PM

JPS1
Until 2017 Amtrak’s Monthly Operating Reports showed the number of operating people assigned to each service line, i.e., long-distance, NEC, etc.  In 2016, the last year the information was publicly available, the long-distance trains required 29.1 percent of the operating employees, carried approximately 15 percent of the system passengers, and generated 22.4 percent of the ticket revenues.  And therein lies the problem.  But don’t take my word for it.  You can look it up.

Since the LD trains generate about 40% of passenger miles, then doing that with only 29.1% of employees sounds like a good deal.

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Posted by charlie hebdo on Sunday, January 24, 2021 2:30 PM

They (or other alternative suburbs) are important for the reasons CMStPnP detailed. For years in the past,  those middle to outer suburban stops served many travelers,  now more than ever. 

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Posted by Overmod on Sunday, January 24, 2021 12:52 PM

charlie hebdo
I think that's true.  At least on lines going west, north and south of Chicago,  Amtrak has retained legacy station stops in Homewood,  Joliet,  Glenview and replaced Aurora with Naperville. 

For us Chicago-challenged readers, why are these stops important to Amtrak and what alternatives would be practical?

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Posted by charlie hebdo on Sunday, January 24, 2021 12:25 PM

CMStPnP

 

 
JPS1
blue streak 1
 We need to wonder how  much operating costs are increased due to late trains.  

 

In an audit report Train Operations: Better Estimates Needed of the Financial Impacts of Poor On-Time Performance, dated October 14, 2019, Amtrak’s IG found a quantifiable relationship between improved OTP, increased revenue, and decreased costs. 
 
The audit team estimated that improving OTP by five percent on all routes would generate a $12.1 million benefit to the company’s operating financials.  The benefits would include $8.2 million in reduced costs and $3.9 million in increased revenues. 
 
In the long run, if the OTP for the long-distance trains could be improved to 75% and sustained for at least a year, the company could realize an estimated $41.9 million per year in operating cost savings.  It would also realize a one-time savings of $336 million by reducing equipment needs. 
 
Progress in improving the OTP of the long-distance trains is still wanting.  In How Do Long-Distance Trains Performance Financially, reference to the problem of “late” running trains is mentioned 4 times. 

 

 
Minnesota DOT raised a valid point in one of it's rail passenger studies that Amtrak has not done a study of rail passenger demographics in relation to where it's suburban and near suburban stations are placed.   Demographics and in a lot of cases population has shifted significantly in several areas since many of those stations were built in the 1950's & 1960's and prior.    Minnesota feels Amtrak could grab a larger population willing to ride corridor trains if it relocated some of it's suburban and near suburban stations and/or built new ones.    In one study it offered the case of significant suburban growth West of Milwaukee and commented that a station in Pewaukee could attract more people to ride the trains just as has the South Milwaukee Station on the Airport property at Mitchell Field.
 
You have to wonder that if Amtrak replicated that throughout it's Corridor system how many more passengers it would carry or how much higher ticket revenue would be.    Some of that translates to Long Distance trains as well since a number of Long Distance Trains transverse the smaller rail corridors and haul corridor traffic.
 

I think that's true.  At least on lines going west, north and south of Chicago,  Amtrak has retained legacy station stops in Homewood,  Joliet,  Glenview and replaced Aurora with Naperville. 

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Posted by Gramp on Sunday, January 24, 2021 12:02 PM

Something I've thought about all along. To the point of eliminating some costly "downtown" stations. And now with the virus, changed traffic/shopping patterns are becoming permanent. 

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