Home
»
Trains Magazine
»
Forums
»
Passenger
»
Amtrak, political realities and the future (PRRIA 2015)

Edit post

Edit your reply below.

Post Body
Enter your post below.
<div style="margin:0in 0in 8pt;"><span style="font-size:14pt;"><span style="font-family:Calibri;">No worries!  The 2008 act was the Passenger Rail Investment Improvement Act.  The proposed 2015 act is the Passenger Rail Reform and Investment Act of 2015.  Changing the name should solve a lot of issues.  At least in the minds of the politicians!</span></span></div> <div style="margin:0in 0in 8pt;"><span style="font-size:14pt;"><span style="font-family:Calibri;">If the key NEC elements of PRRIA 2015 are implemented, Amtrak stands a good chance of being a viable, competitive commercial enterprise in the NEC.  It just may be on the way to earning better, wider support, at least where passenger trains make sense. </span></span></div> <div style="margin:0in 0in 8pt;"><span style="font-size:14pt;"><span style="font-family:Calibri;">Amtrak’s financials improved between 2010 and 2014.  The loss from continuing operations declined 17.3 per cent, while the total loss shrank by 21.8 per cent.  After adjustment for inflation, the total loss declined 14.9 per cent.</span></span></div> <div style="margin:0in 0in 8pt;"><span style="font-size:14pt;"><span style="font-family:Calibri;">The NEC and State Supported and Other Short Distance Corridor trains (SOSDC) have been major contributors to Amtrak’s improving financials.  </span></span></div> <div style="margin:0in 0in 8pt;"><span style="font-size:14pt;"><span style="font-family:Calibri;">In FY14 the NEC had an operating profit of 25 cents per passenger mile before depreciation and interest compared to 3 cents in 2010.</span></span></div> <div style="margin:0in 0in 8pt;"><span style="font-size:14pt;"><span style="font-family:Calibri;">The SOSDC trains lost 4 cents per passenger mile in FY14 compared to 13 cents in FY10 before depreciation, interest, and state payments.  An increased in state payments has been a significant factor in the improvements shown by the SOSDC trains.  Between 2010 and 2014 state capital payments increased 110.3 per cent, and state operating subsidies increased 36.8 per cent.  When the state payments are factored into the accounting, the loss on the SOSDC trains in FY14 was 23 cents per passenger mile. Clearly, the bulk of the losses on these trains has been shifted to the state taxpayers. </span></span></div> <div style="margin:0in 0in 8pt;"><span style="font-size:14pt;"><span style="font-family:Calibri;">The long distance trains (LD) improved their numbers, losing 19 cents per passenger mile in FY14 compared to 21 cents in FY10.  </span></span></div> <div style="margin:0in 0in 8pt;"><span style="font-size:14pt;"><span style="font-family:Calibri;">Amtrak does not reveal depreciation and interest by service line, i.e. NEC, SOSDC, and LD.  The lion’s share of the depreciation probably is driven by the capital spends on the NEC.  A guesstimate is that the NEC wears 80 per cent of the depreciation and interest expense, with the remainder allocated in equal amounts to SOSDC and LD.  If this is a valid assumption; there is no way to prove it; then in FY14 the total loss for the NEC would have been approximately 5 cents per passenger mile.  </span></span></div> <div style="margin:0in 0in 8pt;"><span style="font-size:14pt;"><span style="font-family:Calibri;">The NEC could have covered its fully allocated costs by raising the average ticket price 5 cents per passenger mile, reducing expenses by a like amount, or some combination of the two.  </span></span></div> <div style="margin:0in 0in 8pt;"><span style="font-size:14pt;"><span style="font-family:Calibri;">Amtrak’s marketing gurus would have to determine whether the NEC could stand a 5 cent per passenger mile fare increase.  It probably could in those markets where air and bus competition is marginal.  Also, a higher proportion of any fare increase probably could be laid on the Acela riders.  Many if not most of them are traveling on an expense account.  Or hopefully Amtrak could find a way to decrease its operating expenses to offset some of the fare differential. </span></span></div> <div style="margin:0in 0in 8pt;"><span style="font-size:14pt;"><span style="font-family:Calibri;">Future capital requirements could change the picture significantly.  If Amtrak were to adopt a moderate capital improvements posture, as opposed to best in breed, it might be able to cover the costs out of the fare-box. </span></span></div> <div style="margin:0in 0in 8pt;"><span style="font-family:Calibri;"><span style="font-size:14pt;">If PRRIA 2015 were adopted, especially the provisions to plow the NEC operating profits back into the NEC, as well as increase the amount of low cost loans available to Amtrak, it could be a win-win outcome for passenger rail in the NEC, as well as the U.S. by demonstration.  </span><span style="font-size:12pt;"> </span> </span></div> <div style="margin:0in 0in 8pt;"><span style="font-family:Calibri;"> </span></div>
Tags (Optional)
Tags are keywords that get attached to your post. They are used to categorize your submission and make it easier to search for. To add tags to your post type a tag into the box below and click the "Add Tag" button.
Add Tag