HOW DO LONG-DISTANCE TRAINS PERFORM FINANCIALLY?

[blue streak 1]

The report only lists loss per passenger.  I  would also like to see loss / net per passenger mile of each category.

[CMStPnP]

Overmod

Heaven knows Ed Ellis had relatively low costs in those areas -- and still wound up as he did.

Yeaaaahhhh, not sure I would rate Ed in the business man category.    Railfan or Rail Enthusiast probably.    The fact that his venture had no staying power.....at least he tried but I am more taken aback by some of the shortcuts he took vs good business decisions.    I think he got emotionally invested in his business and would have done anything to keep the fantasy going instead of having an exit plan and responsibly walking away from it when he should have. 

[charlie hebdo]

Overmod

To be honest, any long-distance service 'randomly' patronized is likely to require socially-based subsidy if it is to run regularly, let alone frequently or to satisfy demand for 'daylight' access to many city pairs.  The situation is more observable with transit, outside of areas where the whole demand can be satisfied with only a few hours' completely schedulable service per day.

In addition, even the provision of less-frequent 'boutique' LD trains, or even services appended to scheduled LD trains, has not been long-term successful -- and that, I think, is true independent of opportunity cost for the capital used on those ventures.  It might be interesting to see what 'social subsidy' claims could be advanced for private ventures approximating some of Amtrak's national coverage, or filling 'obvious' gaps in that coverage not suitable for some reason to fill with "local political support".

In very few cases would I expect nonsubsidized ventures to come anywhere near the cost of purchasing and then maintaining new equipment.  Heaven knows Ed Ellis had relatively low costs in those areas -- and still wound up as he did.

 

It is sobering. If only 18% of LD train ridership is from small towns and rural areas between end points and larger intermediate cities, that percentage is even less of total Amtrak ridership. Although Amtrak has been around 50 years,  any justification for continuing that legacy service has expired with time,  other than as an inducement (bribe)  to small population Western state senators to pass Amtrak subsidy budgets. 

My impression of Ed Ellis was that he was more of carnival barker than rail operator. 

[Overmod]

To be honest, any long-distance service 'randomly' patronized is likely to require socially-based subsidy if it is to run regularly, let alone frequently or to satisfy demand for 'daylight' access to many city pairs.  The situation is more observable with transit, outside of areas where the whole demand can be satisfied with only a few hours' completely schedulable service per day.

In addition, even the provision of less-frequent 'boutique' LD trains, or even services appended to scheduled LD trains, has not been long-term successful -- and that, I think, is true independent of opportunity cost for the capital used on those ventures.  It might be interesting to see what 'social subsidy' claims could be advanced for private ventures approximating some of Amtrak's national coverage, or filling 'obvious' gaps in that coverage not suitable for some reason to fill with "local political support".

In very few cases would I expect nonsubsidized ventures to come anywhere near the cost of purchasing and then maintaining new equipment.  Heaven knows Ed Ellis had relatively low costs in those areas -- and still wound up as he did.

[NKP guy]

   The Report is easier to read and understand than I feared.  It is certainly sobering if not dismaying in its presentation of the facts.  Yet as an advocate of LD trains, I recognize an additional set of facts:

 1.  These trains will require similar if not larger subsidies to continue being of service; 2. These trains have been dependent on subsidies for 50 years; and 3. The public, through its Congressional representatives, has for half a century shown they want and will support these trains.

 

[JPS1]

Here are some key takeaways from an Amtrak White Paper on the impact of the long-distance trains on the company’s FY18 finances: 

 

Revenues were $523.4 million; operating expenses were $1,066.7 million, which resulted in an operating loss of $543.3 million.  The cost recovery ratio was approximately 49% compared to 166% for the NEC and 90% for the state supported trains. 

 

Revenues did not cover any of the $297 million in route variable costs (equipment, reservations, and food service) and $243 million in system/fixed costs (share of overhead and corporate expenses),

 

The average operating subsidy per long-distance passenger was $120 vs. $21 for state supported services (state and federal) and an operating profit of $43 per NEC passenger,

 

The long-distance trains racked up 38% of Amtrak’s train miles but produced only 20% of passenger revenues and were responsible for 86% of federally subsidized operating losses,

 

The federal government is the only source to cover the operating losses and capital requirements of the long-distance trains,

 

Amtrak spent $260 million on capital investments for long-distance service; the largest expenditure was for equipment overhauls,

 

Passengers traveling to and/or from stations in rural areas accounted for 18% of long-distance ridership,

 

Excluding the Auto Train, only 3.5% of the long-distance riders rode end point to end point,

 

From FY10 to FY18 ridership grew 1%.  Had it not been for long-distance riders along the NEC, ridership would have declined 5.4%?  Passenger miles decreased 12.5% while seat miles decreased 2.6%.  The average load factor declined from 61% to 55%, and trips of 600 or more miles declined 21% while trips under 300 miles increased 33%.

 

Here is a link to the White Paper for those that would like to dig into the whole document:

https://www.amtrak.com/content/dam/projects/dotcom/english/public/documents/corporate/position-papers/white-paper-amtrak-long-distance-financial-performance.pdf