Amtraks Acela is really a joke.

[Anonymous]

Erik,

Aviation fuel taxes go to the Aviation Trust Fund.  They are not earmarked, which means they can be used to support a variety of FAA operations.  The FAA typically covers 80 to 85 per cent of its costs from fuel taxes, fees, excise taxes, etc. 

Jet fuel is taxed at 21.9 cents per gallon.  However, because of exemptions, the commercial airlines pay only 4.4 cents per gallon, although as one can imagine, they gobble up a lot of fuel and generate a lot of tax revenue.  Aviation gasoline is taxed 19.4 cents per gallon.  In addition, each state imposes an aviation fuel tax on top of the federal aviation taxes, just as they do for the motor fuels that we use in our cars.

I don't see why Amtrak should be exempt from fuel taxes or any other taxes.  The exemption gives it an advantage over its competitors, especially competing bus operators, i.e. Bolt Bus, Red Bus, Peter Pan, etc.

The airlines pay inventory, property, excise, sales, etc. taxes, although frequently they are buried in lease agreements or rental charges.  During the 90s, for example, Dallas, TX, which is home to Southest Airlines, hit the company with very high inventory taxes.  Southwest threatened to move its headquarters if the city did  not reduce the taxes.  The city tax office reassessed the value of the inventory and decided it had been overly aggressive in valuing the inventory, thereby reducing the inventory tax bill for Southwest. 

Most airports in the United States are owned by municipalities, counties, or airport authorities.  The airports don't pay property taxes.  It would not make any sense for them to do so.  But they are required to recover the cost of the facilities from the users, although on occasion they get monies from the federal government for airport improvements.  However, the amounts, according to the FAA budgets, are relatively small.

The airlines pay a variety of fees to use the airports, i.e. landing fees, gate fees, terminal fees, hangar fees, etc.  In most instances their payments reflect their proportional use of the facilities.  They don't pay the total cost of the facilities because in most instances they are not the sole user of the facilities. By the same token they are not the sole users of the airways.  According to the FAA, nationwide the airlines account for approximately 32.5 per cent of flight operations, with most of the operations being accounted for by general aviation.    

In 2007 the commercial airline industry had net income of $4.6 billion.  In 2008 they lost $14.7 billion, and in 2009 they lost $5.7 billion.  I have not pulled the numbers for 2010, but I understand that they had positive net income in 2010. 

American Airlines is financially challenged.  Yet, it had positive net income in 2005 and 2006.  More important than the Income Statement or any other financial statement for that matter is the Statement of Cash Flows.  This is the statement that tells investors whether the company has a future.  Thus, although American, as an example, lost money in 2010, 2009, and 2008, according to the Income Statement, it had positive cash flows in 2010 and 2008.  Equally important, it was able to obtain approximately $2 billion in funds for capital expenditures, i.e. new airplanes, facilities, etc.  They would not have been able to arrange this financing if they had never generated a positive return for their shareholders or if the investment community believed that the company is not likely to continue as a going concern.  Thus, by example, I am saying that one really needs to drill into airline finances to understand them and by implication the health of the industry.   

Clearly, the airline industry does not generate high returns, but it is not true to say that it has never produced a return for their investors.  In any given year some of the airlines, even in the worst of times, generate a positive return to their shareholders, whilst some of them have difficulty generating a positive return under the best of times. 

[blue streak 1]

Sam. I came across an Oct Aviation week (Business Aviation) publication that stated that in the past FY Stimulus money to GA airports in all 50 states amounted to over $1B. The article was written before the election. It further stated another Billion was going to GA airports this FY however exactly what has happen this year is to be determined. 

[erikem]

Sam1

Aviation fuel taxes go to the Aviation Trust Fund.  They are not earmarked, which means they can be used to support a variety of FAA operations.  The FAA typically covers 80 to 85 per cent of its costs from fuel taxes, fees, excise taxes, etc. 

Jet fuel is taxed at 21.9 cents per gallon.  However, because of exemptions, the commercial airlines pay only 4.4 cents per gallon, although as one can imagine, they gobble up a lot of fuel and generate a lot of tax revenue.  Aviation gasoline is taxed 19.4 cents per gallon.  In addition, each state imposes an aviation fuel tax on top of the federal aviation taxes, just as they do for the motor fuels that we use in our cars.

Sam,

I remember stories from the early 1970's about the Aviation Trust Fund having a multi-billion dollar surplus and resulting complaints about the money not being spent on needed airway and airport improvements, particularly those that would have helped the general aviation community. It's possible that the FAA was taking a breather after a decades effort implementing a new Air Traffic Control system and replacing LF/MF ranges with VOR and VORTAC stations. As an aside, I would be very surprised if there weren't a lot of SAGE veterans working on developing the ATC system back then.

Looks like the federal aviation tax rate is more equitably balanced than 40 years ago. I suspect that the states vary wildly in the proportion of aviation fuel taxes being used to support aviation related activities. Montana, for example, did provide some funding for airports and installation/operation of non-directional beacons.

State collected motor vehicle fuel tax revenues generally goes to highway construction and maintenance. There is some controversy here in Calif about how much of the sales tax needs to go to road funding, though there are several places (San Diego county is one) where part of the general sales tax goes to funding road construction (and mass transit projects).

I don't see why Amtrak should be exempt from fuel taxes or any other taxes.  The exemption gives it an advantage over its competitors, especially competing bus operators, i.e. Bolt Bus, Red Bus, Peter Pan, etc.

I wouldn't have strong objections to Amtrak paying sales tax on its fuel, but don't see any reason for fuel taxes above and beyond that, much as I don't see any reason why a homeowner would need to pay anything beyond sales tax on the #2 fuel oil he/she uses to heat the home. FWIW, the Southern Pacific did have a dodge around California's sales tax on fuel, the Espee would haul the fuel from the refinery in El Segundo to to a Standard Oil of California fuel depot in Arizona, buy the fuel there and haul it back to LA for use in their locomotives.

I also wouldn't have strong objections to Amtrak paying taxes on rolling stock and some of their inventory. I do not think it is unfair that Amtrak does not pay taxes for its right of way as bus lines do not pay an equivalent of property tax for the roads they use and the airlines do not pay an equivalent of property tax for the FAA facilities they make use of.

As for my comments about the airline's overall rate of return, I used "claim" for a reason, i.e. it is not a proven fact.

I do think that it would be worthwhile upgrading the NYC-Wash portion of the NEC. I am not so sure about many of the other HSR projects, though DFW-Houston would seem to be a natural choice. LA-SF seems to be really iffy, the one benefit would be improved services to cities in the San Joaquin valley. In my curmudgeonly view, setting aside 5% of the proposed Cal HSR program budget for improving the LOSSAN corridor would have a lot more bang for the buck.

- Erik

[blue streak 1]

Paul_D_North_Jr

 There are 2 S curves one near Elizabeth and the other location I cannot recal right now south of Elizabeth. At one time both were 60 MPH but now?? and both are in the AMTRAK upgrade proposal 

 http://www.amtrak.com/servlet/ContentServer?c=Page&pagename=am%2FLayout&p=1237608345018&cid=1241245669222  

  From another source, here's a link to another Amtrak document that does have that kind of information - but it's in 2 separate tables, and there's not a 'clean' 1-to-1 correlation between those tables of the cost and time benefit for each item.  See Amtrak's "An Interim Assessment of Achieving Improved Trip Times on the Northeast Corridor" Revised Version October 21, 2009 (23 pages, approx. 1.74 MB in size), esp. Appendix Table A-1 - NEC Main Line: Detail of Order-of Magnitude Infrastructure Improvements Needed to Meet Trip Time Goals" on page 20 (Page 22 of 23 of the 'PDF' format version), and Appendix Table A-2 - NEC Main Line: Estimated Trip-Time Savings by Initiative to Meet Long-Range Goals" on page 21 (Page 23 of 23 of the 'PDF' format version), at:

 Note that per these Tables, the Curve Realignments/ Modifications are estimated to cost $500 Million to save 2 minutes - that's about the same cost as installing the Constant Tension catenary, which with other Track and Signal upgrades, would save an estimated 5 minutes . . .   

 - Paul North.  

Paul: Table A-2 had in its body the curves that I finally found. They are at Elizabeth, Lincoln, Crroyden, Torresdale, Frankford , for  --   2 minutes.

Portal bridge --  1 min

Constant tension CAT  -  5

Change unbalance -- 2 

[blue streak 1]

Paul_D_North_Jr

 Note that per these Tables, the Curve Realignments/ Modifications are estimated to cost $500 Million to save 2 minutes - that's about the same cost as installing the Constant Tension catenary, which with other Track and Signal upgrades, would save an estimated 5 minutes . . .   

 - Paul North.  

Here is a portion of Amtrak's statement on Constant tension CAT.

Since the conversion to constant-tension catenary is expensive and disruptive to service, an initial step would be to install intermediate catenary structures to shorten the overall span lengths of the existing variable tension catenary. The reprofiling of the existing catenary system on these new intermediate structures would significantly shorten the existing spans, greatly reducing the sagging of the existing catenary while providing the shorter spans necessary for future conversion to a constant tension system. These shorter spans could also allow interim increases in speeds above 135 mph (possibly up to 150 mph) with the existing catenary system, producing immediate benefits prior to the installation of constant tension catenary that would allow speeds greater than 150 mph to be achieved.

Constant-tension catenary was installed in the 1990s between New Haven and Boston as part of the NHRIP program. It is also being installed on Metro North’s New Haven Line territory under the currently underway program to upgrade the catenary system on that line. The approach Amtrak plans to utilize to upgrade the catenary system between New York and Washington would provide some immediate trip time benefits with the existing variable tension catenary, while initiating the process for conversion to a constant tension system.

[Paul_D_North_Jr]

Yep - I saw that, too, yesterday.  Just one more reason to attack this challenge 'incrementally' as opposed to "Build a completely new system".  For only 1/2 a $Bil, that would enable a comparative lot of improvement in travel time and reliability, for both Amtrak and the commuter operators on each segment.  Not 'rocket science', either, nor does it need to wait for a big program like a new equipment fleet order to be approved and funded. 

- Paul North.   

[blue streak 1]

Paul_D_North_Jr

Yep - I saw that, too, yesterday.  Just one more reason to attack this challenge 'incrementally' as opposed to "Build a completely new system".  For only 1/2 a $Bil, that would enable a comparative lot of improvement in travel time and reliability, for both Amtrak and the commuter operators on each segment.  Not 'rocket science', either, nor does it need to wait for a big program like a new equipment fleet order to be approved and funded. 

- Paul North.   

PDN: you are on the right "track". It appears  that the latest Amtrak request for funds that other political persons rejected seems to cover most of the items in the report. Upgrading from Newark to just south of Trenton will benefit many riders. The NJ Transit getting 125 MPH ALP-46s and ALP-45DMs capable of running 125MPH under CAT appears to be preparation for the AMTRAK upgrade.

The costs and complications on into PHL appear to be engineering nightmares?

IMHO if persons that ride trains realize that their train is covering the O & D in slightly less time than before they will become happy "trackers". 

 

[n012944]

Phoebe Vet

http://bungalowbillscw.blogspot.com/2010/11/federal-airline-subsidies-in-airline.html 

http://www.joplinglobe.com/local/x150253919/Congress-eyes-ending-airline-subsidies 

http://www2.timesdispatch.com/business/business/2010/dec/02/jetb02-ar-689270/ 

 

 

I am not quite sure what the point of these links are.  The first one is a BLOG, full of misinformation, and half truths.  It is not a good source at all.  The second conceres EAS.  As pointing out already in this thread, the government pays airlines to service small towns that are not large enough to warrent air service.  It really has no place in this thread because, as I am sure that you know, Washington, NYC and Boston are not EAS cities.  The last link demonstrates how bad cities want airline service.  Most cities will court airlines that are not flying to their city.  If the airline does not much of a chance to make a profit, it will require revenue guarantees for a certain period of time.  If the city really wants that service they will pay it.  However this is the exception to the rule, and the guarantee lasts for a short period of time.

[Anonymous]

blue streak 1

Sam. I came across an Oct Aviation week (Business Aviation) publication that stated that in the past FY Stimulus money to GA airports in all 50 states amounted to over $1B. The article was written before the election. It further stated another Billion was going to GA airports this FY however exactly what has happen this year is to be determined. 

As per the FAA's FY10 Performance Report, in FY09 the excise taxes, fees, and other revenues covered 68.4% of the FAA's expenditures.  In FY10 these same sources covered 67.6% of the FAA's expenditures.  Historically, the FAA has covered approximately 80% of its expenditures from taxes, fees, etc., whilst depending on transfers from the general fund to cover the remainder.  The change in the ratios in 09 and 10 probably are a function in part of ARRA.

In FY10 the FAA spent $4.1 billion on airports, i.e. airport improvements, towers, approach and departure control facilities, research, noise suppression, etc.  Assuming that the transfer to revenue ratio outlined in the preceding paragraph applied across all FAA activities, $1.3 billion of the airports expenditures would have come from the general fund.

According to the CIA's World Fact Book, the United States has 15,079 airports.  Approximately 1/3^rd of them have paved runways; the others have a variety of surfaces.  Only 379 airports have scheduled airline service.   The FAA FY10 Performance Report does not provide a breakdown of the airports that received monies for the airport improvement program.  The information is available, but digging through the detail may not be worth the outcome, especially given the time required.  In any case it is reasonable to assume that not all the funds went to primary airports, which are those that board at least 10,000 passengers per year. 

Broadly speaking the airlines account for slightly more than 30 per cent of the FAA's operational activities, with the remainder being devoted to general aviation and military operations in civilian airspace.  At the primary airports, the airlines account for considerably more than 30 per cent of the operations, but at most airports they don't have a presence.  Using this ratio as a guide, approximately $388 million of the expenditures went to the primary airports with scheduled airline service.  Doubling the ratio would result in $755 million going to these airports.  No matter how the numbers are sliced and dices, the amount of money spent by the FAA on airports with commercial air service is miniscule compared to the operating budgets and invested capital for those airports.

In FY10 the total federal subsidy received by domestic airline passengers, i.e. those enplaning and deplaning in the United States, was approximately 99/100s of one per cent per passenger mile.  Or another way to put it, it was 99 basis points.

The amount of the federal subsidy, i.e. monies not covered by ticket fees, excise taxes, etc. allocable to airline passengers is very small.  I am at a loss as to why supporters of passenger rail go there.  At the end of the day the federal subsidies that benefit airline passengers, especially on a passenger per mile basis, is very small compared to the subsidies received by rail passengers.   

[henry6]

So it borders on comparing apples to oranges.  So...if passenger rail service were funded at the same amount, not same rate, it might have enough passenger customers to make both peaches!

 

[blue streak 1]

Sam1

blue streak 1:

Sam. I came across an Oct Aviation week (Business Aviation) publication that stated that in the past FY Stimulus money to GA airports in all 50 states amounted to over $1B. The article was written before the election. It further stated another Billion was going to GA airports this FY however exactly what has happen this year is to be determined. 

The amount of the federal subsidy, i.e. monies not covered by ticket fees, excise taxes, etc. allocable to airline passengers is very small.  I am at a loss as to why supporters of passenger rail go there.  At the end of the day the federal subsidies that benefit airline passengers, especially on a passenger per mile basis, is very small compared to the subsidies received by rail passengers.   

I am confused???  What does grants to general aviation airports have to do with federal subsidies benefitting airline passengers? The number of persons  (ga pilots) benefitting from these grants is very much smaller than the Amtrak subsidities?? 

[Paul Milenkovic]

Sam1

No matter how the numbers are sliced and dices, the amount of money spent by the FAA on airports with commercial air service is miniscule compared to the operating budgets and invested capital for those airports.

In FY10 the total federal subsidy received by domestic airline passengers, i.e. those enplaning and deplaning in the United States, was approximately 99/100s of one per cent per passenger mile.  Or another way to put it, it was 99 basis points.

The amount of the federal subsidy, i.e. monies not covered by ticket fees, excise taxes, etc. allocable to airline passengers is very small.  I am at a loss as to why supporters of passenger rail go there.  At the end of the day the federal subsidies that benefit airline passengers, especially on a passenger per mile basis, is very small compared to the subsidies received by rail passengers.   

So it borders on comparing apples to oranges.  So...if passenger rail service were funded at the same amount, not same rate, it might have enough passenger customers to make both peaches!

Dunno, because some people never give up?

With more seriousness, I think the argument could be made and was made at the inception of Amtrak that a passenger train subsidy was needed to level the playing field.  In response to the argument made by Sam1 and others that on a cents per passenger mile basis, the playing field is more than level, the response is OK, on a cents per passenger mile basis, Amtrak is expensive, but that is only because Amtrak at 1+ billion/year in subsidy is underfunded, give Amtrak the 30+ billion of the Highway Trust Fund or the 10+ billion of the Aviation Trust Fund, lets see how Amtrak is doing then.

Henry6 has taken up the cause that Amtrak is spread too thin and one train per day is not operating a service.  OK then, would people accept that at least in the NEC, Amtrak with more than 1 train per hour in each direction in a densely populated transportation corridor where the roads are saturated is running a service?  Under those favorable conditions, the Acela is at least covering its above-the-contact-patch direct operating cost, but it is doing this by charging very high fares, which the elites who need to move about between the nation's financial center and its seat of government are able to pay.

I think this makes the case that passenger trains are a particularly high cost common carrier mode of transportation, which are competitive on hauls that are short enough that air transport becomes equally expensive on account of the short trip length, but not too short that one would just jump in the the car.  The NY-Philly segment is probably the "short enough to jump in the car" category were it not for traffic on the New Jersey roads and that there is a demand for city center to city center travel along with well developed transit systems in NYC and in Philly.

[schlimm]

Precisely!

[Anonymous]

blue streak 1

Sam1:

blue streak 1:

Sam. I came across an Oct Aviation week (Business Aviation) publication that stated that in the past FY Stimulus money to GA airports in all 50 states amounted to over $1B. The article was written before the election. It further stated another Billion was going to GA airports this FY however exactly what has happen this year is to be determined. 

The amount of the federal subsidy, i.e. monies not covered by ticket fees, excise taxes, etc. allocable to airline passengers is very small.  I am at a loss as to why supporters of passenger rail go there.  At the end of the day the federal subsidies that benefit airline passengers, especially on a passenger per mile basis, is very small compared to the subsidies received by rail passengers.   

 

I am confused???  What does grants to general aviation airports have to do with federal subsidies benefitting airline passengers? The number of persons  (ga pilots) benefitting from these grants is very much smaller than the Amtrak subsidities?? 

I misunderstood your initial posting.  I thought that you were referring to airports in general. 

People in these forums frequently claim that the nation's airlines benefit from federal subsidies to the airline industry.  And at least imply that if the feds did not subsidy the airlines, passenger rail would be much more competitive, ignoring the fact that rail passengers receive the largest per passenger mile subsidy of any commercial transport mode.

The larger question is what do grants to general aviation airports have to do with passenger rail? 

[henry6]

Interesting logic Sam...but..what if the airlines did not have municipal owned and operated airports, non FAA operated air traffic control system, military funded research and development, and whatever other government aid that might be there and have had to develop their own airports, develop and police their own rights of way, included research and development in the purchase price of their equipment?  We have Amtrak because the airlines received all this while private enterprise railroads were paying for what they needed.  The fallacy of it all was that Amtrak would be the same as the subisdies given to airlines.

Again, at this point of the game, airlines are far ahead of passenger services because the government has been in it longer and never gave equal amounts to Amtrak; Amtrak will never get even to airlines at this rate.  This is why I keep saying that if we expect to have efficient and effective transportation services in this country we've got to stop thinking in terms of what was and what is but instead must act if nothing exists and start from there.    

[schlimm]

All of this is interesting, but the original theme of the thread was the title.  I think most of us would agree that the Acela service (and NE Regional) are not jokes.   They are useful and valued services and provide a blueprint for the direction to go in developing passenger rail services for the future.