Why can't the big class 1s take ownership for passenger service?

[Prairietype]

I wonder about market factors in the old days, specifically was part of the low profitability the result of many railroads having to compete and interact with each other. If, today, the several giant railroads operated passenger rail service, could they make a profit from the benefit of their huge systems?

[Ulrich]

I appreciate that rail and air services are different...I brought up Southwest only to show that passenger transportation can be profitable even when the mode involves high capital expediture.

 Freight was also unprofitable 30 years ago...but the railroads remained in that market. Maybe high speed passenger rail service is the wrong approach. Surely the current infrastructure can handle speeds of 50 mph, and passengers save time with downtown to downtown service.

[CG9602]

Well, the private RR's left the passenger market to start with because they could not make money. There are no other carriers clamoring to take over any of Amtrak's routes because they know there are no profits there. They could not compete with taxpayer funded highways, and the convienience of the car and cheap fuel. To upgrade existing lines in order to accomodate higher speeds would require a much more positive rate of return on the investment, and Amtrak has a negative rate of return - even on its busiest (read that: most capital intensive and demanding) routes. In fact, the shorter routes, which carry many people, are also the LEAST profitable on a train-mile or passenger-mile basis.

You also shoud not compare rail service to airlines, as the two are dissimilar items. SW Air does not serve the same markets, in identical fashion, as Amtrak does.

[Ulrich]

It's no secret that the big class 1 railroads are doing very well with operating ratios at or below 80%. They are profitable, and I'm glad I'm a shareholder in some of them. But I really wonder why the taxpayer is still being asked to support passenger rail operations in both Canada and the United States..it doesn't seem fair with the railroads cherry picking the good stuff and leaving the rest for the taxpayer to support.

I appreciate that the railroads are in business to make a profit....but where does it state that passenger service cannot be profitable? Look at Southwest Air...an airline with one of the safest records, and they have similar high capitable investment requirements, and they're very profitable. With the right managment passenger rail can be very profitable.

The governments should get out of the pasenger rail business and instead perhaps offer rail carriers a tax incentive and maybe other incentives to take back and run the trains. An added benefit would be a return to variety in trains that reflect the regions they run through. The railroads would also be able to showcase their operations to shippers and the public at large.