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Posted by Anonymous on Saturday, January 19, 2008 6:34 PM

 JT22CW wrote:
I don't see a single reference to support anything you've asserted. Care to provide them? As far as I've heard, plenty of direct subsidy goes into air traffic control, and without it, it would fall apart. (Is the Airline Trade Group an unbiased source?)

Here is some beef for the numbers that I quoted in my post regarding Southwest Airlines and airline subsidies. 

My original estimate used some but not all of NARP's numbers.  I eliminated the ones that were not supported, e.g. $700 million to $1 billion of NASA research that NARP claims benefited general aviation. 

Information regarding Southwest Airlines' flights from Dallas to Austin, Houston, San Antonio, etc., can be found in Southwest's on-line schedules.  I added up the flights for the second Monday in February. 

For FFY ended 30 September 2007, Amtrak received a federal subsidy of $1,051,500,000 for train related operations.  During the year it carried 25,847,531 passengers.  Dividing the subsidy by the number of passengers gives an average system subsidy of $40.68. 

The average subsidy for NEC passengers was $2.52, while the average subsidy for state and other corridor train passengers was $16.00.  It averaged $129.78 for long distance passengers. I assumed that 80 per cent of the interest and the depreciation was attributable to the NEC, leaving 20 per cent to be split evenly between the other two categories. 

NARP lists 15 Federal Subsidies for Aviation.  Four can be quantified.  The others cannot be quantified without making assumptions that would be difficult to support, or they relate to investments - airways and airports - that go back as far as WWII, or they don't tell the whole story. 

NARP lists the assumption of the pension plan obligations of several bankrupt airlines by the Pension Benefit Guaranty Corporation (PBGC), as well as a change in the actuarial assumptions for funding legacy airline pensions, as an aviation subsidy.  But they failed to mention that the PBGC is an insurance program.

PBGC is not funded by general tax revenues.  It collects insurance premiums from employers that sponsor insured pension plans, earns money from investments and receives funds from pension plans it takes over.  The airlines paid actuarially adjusted premiums to the PBGC.  Equally important, actuaries frequently change the minimum funding assumptions associated with legacy pension plans.  The treatment received by the bankrupt airlines with legacy pension plans was not extraordinary.  They collected on an insurance policy.  The net benefit would have been the present value of the benefit stream offset by the present value of the premiums paid since the formation of the PBGC.

NARP fails to differentiate between commercial aviation and general aviation, thereby implying that commercial aviation is the sole beneficiary of a subsidy.  General aviation does not compete with Amtrak.  People who can afford to fly their own plane or be whisked around the country in the corporate jet are not serious candidates for taking a train. 

Governmental investments in airports and airways facilities are listed as significant subsidies.  It is true that the airlines have benefited from a variety of fiscal incentives to build airports and airways facilities.  It is equally true that the railroads have enjoyed similar fiscal benefits, i.e. the large land grants for the development of western railroads, local tax incentives to build union stations, etc.  Amtrak would not have any tracks out west to run on if it had not been for these subsidies.  To cite historical incentives for the development of airports and airways without citing similar support for railway development is disingenuous.  Translating these incentives into present dollars would be a daunting challenge.  Both are sunk costs and are irrelevant for on-going comparisons. 

NARP claims that 15 per cent of FAA operations are a function of military operations in FAA controlled airspace.  It provides no data to substantiate this number.  

NARP claims that FAA operations were slated to receive $2.703 billion of general funds in 2007.  It further claims that $1.453 billion was destined for general aviation, implying that half of the subsidy must be for commercial airline operations.  I cannot determine how they came up with this number, as per the next paragraph.

Assuming that the federal subsidy was spread across all FAA operations, the amount that would have been available in 2007 to control general aviation and commercial airline operations would have been $2,297,550,000 (2.703 X .85).  According to the FAA Aerospace Forecast Fiscal Years 2006-2017, in 2005 - latest audited figures - commercial airlines flights made up 26.1 per cent of tower operations - ground control, take-off and landing clearance, and approach/departure control hand-offs.  They accounted for 35.1 per cent of Enroute controlling.  The average of these two numbers is 30.6.  Thus, under a conservative scenario, the FAA federal operations subsidy applicable to commercial airline operations using NARP's numbers would be $703,050,300 (2,297,550,000 X .306).

In 2005, the latest year for audited financial numbers, $2,827,809,000 was transferred from the general fund to support FAA operations.  Assuming military flights make-up 15 per cent of FAA's workload, for conservative illustrative purposes, $2,403,637,650 (2,827,809,000 X .85) would have been available for general operations, of which $735,513,121 (2,403,637,650 X .306) could be considered a subsidy to control commercial airline operations.

These are just some of the disconnects that I found.  There are others.

NARP's verifiable figures add up to $5,852,845,871 before the removal of unsupported items, e.g. NASA research.  After the removal of these items, the general fund subsidy totals $4,619,787,047.  According to Federal Department of Transportation (DOT), for FFY ended October 30, 2007, approximately 678,000,000 passengers boarded commercial airliners for flights in the United States.  Dividing $5,852,845,871 by this number gives an average passenger subsidy of $8.63, while the math after removal of the questionable items shows an average passenger subsidy of $6.81.

Using the latest audited numbers - 2005 to 2007, the properly allocated - general, commercial, and military aviation operations - verifiable federal subsidy for controlling commercial airline operations was approximately $2,951,485,487.  Dividing this number by the same number of passengers shows an average passenger subsidy of $4.35.  I only used audited or verifiable numbers for this calculation.  Thus, if a 2005 number was the latest audited or verified number, it is the one that I used.  It resulted in some mixing and matching of the numbers, but the year to year differences were relatively small.  Thus, the bottom line could change a little once the 2007 figures have been audited and verified, but it would be minimal. 

Failure to prorate the subsidies between general aviation and commercial airline operations accounts for most of the variances.

Digging through government figures is a daunting task.  But at the end of the day, no matter how one slices and dices the numbers, the average per passenger federal

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Posted by Phoebe Vet on Wednesday, January 16, 2008 12:25 PM

Actually, it was originally called the Dwight D. Eisenhower National System of Interstate and Defense Highways.  It still bears the flag of a 5 star General on signs in many areas.

It was authorized by the  Federal Aid Highway Act of 1956, which was popularly known as the National Interstate and Defense Highways Act of 1956.

The reason the Highway Trust Fund is insufficient to maintain the road system is because huge portions of it are used for pork projects.  In just the last two years it has been used for 3 million dollars to rebuild the Packard Museum, $400,000 for the Erie Canal Museum, $950,000 to build a bicycle and pedestrian walkway along an abandoned rail right of way, a 1.5 million dollar bus stop in front of the Anchorage Museum of History and Art, 2.3 million for landscaping along the President Reagan Freeway, $300,000 for boadwalks at Pismo Beach, 4 million dollars to build a parking lot in Baltimore, etc.

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Posted by oltmannd on Tuesday, January 15, 2008 7:17 AM
 erikthered wrote:

The second point is that you have to take away choices.  That's another kind of emminent domain.  Oltmann, living here just south of you, I know what driving through Atlanta is like.  What do you suppose would happen if the state government said, "We aren't going to build a highway into Atlanta.  Instead, you must use a train."

Well, the state pretty much has said the first part - "no more highways thru Atlanta".  But, they've yet to do anything about the second part, except talk.  We did get a small network of express commuter busses from an initiative started under the previous gov.  But, the current gov. hasn't shown any leadership w.r.t. transportation and with the balance of power in the state gov't tilted away from metro Atlanta toward rural GA, nothing is happening.  Add to that, the new DOT head has uncovered that the DOT is a complete disaster of project planning and deliverly and you have quite mess.

Maybe they'll surprise me this legislative session.  The leading pro-commuter rail line group has already started beating the drum.  Maybe this is the year the state'll let loose with some money.....but I doubt it.  The Gov is too busy praying for rain.  Meanwhile the traffic gets thicker and bloom that is Atlanta starts to wilt and petals start to drop.

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by oltmannd on Tuesday, January 15, 2008 6:58 AM
 Samantha wrote:

Whether people are aware of the subsidies received by all or nearly all forms of transport in the U.S. does not change the subsidy.  It is still a payment that is not covered by the user fees.  It is, in a sense, a hidden tax. 

The question in my mind is who received the subsidies and what economic and social value goals are achieved as a result.

That, pretty much, is how I look at it, too. However, I'd go a step farther.

I would suggest that gov't or gov't agency collected "user fees" are really just taxes with strings attached.  And those strings often result in sub-optimum allocation of resources.

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by al-in-chgo on Monday, January 14, 2008 7:29 PM
 erikthered wrote:

Another big difference I believe we should take into account is difference in priorities.

The biggest expenditures this country has made have all been "Defense" related.  Not neccessarily so in Europe.  I don't want to open up a can of worms or political anger, but simply put, the money for design, funding, and operating an HST has to do a lot with priorities Americans see fit to employ.

The reason the Interstates were built was Defense related.  Eisenhower had personally led a convoy coast to coast in a vehicle, plus he had also seen the Autobahns in Germany.  The Interstates were built to facilitate rapid movement of military vehicles over terrain.  (In fact, I have heard that one of the specifications of an Interstate highway is that they had to have straight sections built in, to act as emergency runways for fighter aircraft.)

That kind of engineering costs a lot of money- to the point of excluding other means of transportation.

You don't have to worry about ancilliary costs of purchasing real estate, or environmental protection, if your country is laid flat to start with.  A theory I have is that the reasons Germany, France, and continental Europe are so "modern" is because they literally had to start over from scratch.  They didn't need to worry about large standing armies, the latest technology for aircraft, or whether running the railroad through John Gotbuck's back yard might be a concern.  John Gotbucks was probably dead, and his mansion was flattened.

If you bomb a country back into the Stone Age, you should not be surprised when that country takes the technology you have unleashed on them and improves on it.  Especially when you tell them that you will guarantee their safety, at your own expense.  While you are busily and happily cranking out billion dollar bombers, your "protectorate" is taking the same money they would have spent on a Luftwaffe, an Imperial Navy, or a hundred division Army, and building up a balanced infrastructure.

You won't get an HST in the United States until a couple of things happen.  First, you will have to empower the government far beyond what it is now.  The governments of Germany, France, and even the UK are much more willing to run over civil "entitlements" if they see a positive, lasting impact on the country as a whole.  So, to build an HST corridor implies, in my mind, granting the Federal, State, or even local governments the power to confiscate land under "emminent domain".  That won't happen- in fact, the current feeling of most Americans is that the government has too much power to do that already.

The second point is that you have to take away choices.  That's another kind of emminent domain.  Oltmann, living here just south of you, I know what driving through Atlanta is like.  What do you suppose would happen if the state government said, "We aren't going to build a highway into Atlanta.  Instead, you must use a train."

I would suspect the rail system, from MARTA to AMTRAK, would improve dramatically in terms of capacity- not neccesarily comfort.  I've been on regular commuter trains in Japan that were fast, clean, efficient, and run on time.  They still required rail employees to herd the crowds onto the train, and made the ride as comfortable as a hot, steamy summer day on the New York subway.

To build ridership, you have to take away the choices of a self indulgent society that believes it's neccessary to get into their SUV and drive 45 minutes into work 18 miles away.  Not going to happen in this country.

We have the technology to build an HST network.  We just haven't been forced into doing it... Europe has, and so has Japan.

 

I agree with the above thread, but just want to touch on Eisenhower's defense rationale for building the original Interstate highway system:  it was part of the reason, but not the primary one(s): to save lives on the highway and with the safety, improve speed (although nothing like the "recommended" 130/kph [ca. 80 mph] that Germans still enjoy on most of their Autobahnen, in rural areas).  Recall that Ike had originally called for a (federally sponsored or subsidized, I guess) system of toll highways that would run from the edge of one city, with relatively infrequent intermediate exits, and terminate at the edge of another city. BTW that was how the original Hitlerian roads were laid out and even today, except for several very large German cities, one doesn't expect to find exits that permit cross-town driving.  Those familiar with Chicago will note that the original 1953 Chicago Skyway (which connects to the Indiana Toll Road at the border) ended at Stony Island Boulevard, a broad avenue and probably a great place to begin and end a toll road -- Ike would be proud, although those early Northeastern and Midwestern toll roads were built with little or no public subsidy that I know of past the state level of gov't.  Also note that the Indiana Toll Road and Ohio's toll version of same have fewer exits than a "free" Interstate:  Toledo has only one exit, for example.   

I believe it was also Eisenhower's administration that promoted the idea of a national sales tax per gallon of retail gasoline.  Most people will say that worked well, but it is sadly apparent today that those funds are not enough for all the expenses related to our now frequently ancient system of freeways and toll roads. 

Later in the early Sixties the defense connection was stengthened when Sec'y of Defense Robt. McNamara (sp?) proposed that the Interstates would be useful in any coming atomic war or sudden build-up; hence the many, many bridges over Interstates that list the bridges' height, especially those over the older tollways or freeways: The newer roads were to carry mobile missles-on-a-truck platforms should need arise, and the newer freeways etc. were designed so that a warning label wouldn't be necessary (to those trucks w/ cannons).  McNamara held, and probably correctly, that the nation's railroads couldn't get their act together enough to coordinate routes AND offer priority service within a two- to three-day window.  It didn't hurt, I would guess, that the Interstates already had become, by virtue of being public highways if nothing else, under state control -- fortunately we have not had to go beyond (state) Troopers or local police to, well, police the new roads.  Again I don't think McNamara's jawboning brought forth the expanded budgets for new and better Interstates all by itself; but doesn't it seem in our history, both before and since, that often a relatively good idea often is sweetened with a possible defense purpose, sealing it as a deal-maker?  And since that's getting into politics, I'll say no more on that. Ashamed [*^_^*]

IIRC, it was primarily under LBJ's administration that funding for specifically urban-oriented Interstates became widely, and generously, available.  For example, Roanoke Virginia has an Interstate spur built in the Sixties that originally extended from the "mainline" Interstate 81 to downtown; over the years the erstwhile &

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Posted by Anonymous on Monday, January 14, 2008 2:43 PM

Samantha, the question should not be "who received the subsidies"- that's a matter of public record.  The question should be, "What did they do with them when they got them?"  Did they get an HST or a boondoggle bridge to nowhere?  When you ask what goals or values resulted from those subsidies, I would add the question- did those goals and values reach an appropriate base of people?  To illustrate the question, what effect does an ACELA serving the Eastern seaboard have on Californians?  Texans?  Floridians?  Practically speaking, no effect at all, yet federal tax dollars from everyone are spent on a relative few people.

That's the kind of question people have about AMTRAK, light rail projects, and railroads in general... and is the sort of thing journalists label as "pork barrel projects".

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Posted by Anonymous on Monday, January 14, 2008 1:53 PM

Whether people are aware of the subsidies received by all or nearly all forms of transport in the U.S. does not change the subsidy.  It is still a payment that is not covered by the user fees.  It is, in a sense, a hidden tax. 

The question in my mind is who received the subsidies and what economic and social value goals are achieved as a result.

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Posted by Phoebe Vet on Sunday, January 13, 2008 12:45 PM
You are assuming that people are even aware of the subsidies...

Dave

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Posted by Anonymous on Sunday, January 13, 2008 12:01 PM

Another big difference I believe we should take into account is difference in priorities.

The biggest expenditures this country has made have all been "Defense" related.  Not neccessarily so in Europe.  I don't want to open up a can of worms or political anger, but simply put, the money for design, funding, and operating an HST has to do a lot with priorities Americans see fit to employ.

The reason the Interstates were built was Defense related.  Eisenhower had personally led a convoy coast to coast in a vehicle, plus he had also seen the Autobahns in Germany.  The Interstates were built to facilitate rapid movement of military vehicles over terrain.  (In fact, I have heard that one of the specifications of an Interstate highway is that they had to have straight sections built in, to act as emergency runways for fighter aircraft.)

That kind of engineering costs a lot of money- to the point of excluding other means of transportation.

You don't have to worry about ancilliary costs of purchasing real estate, or environmental protection, if your country is laid flat to start with.  A theory I have is that the reasons Germany, France, and continental Europe are so "modern" is because they literally had to start over from scratch.  They didn't need to worry about large standing armies, the latest technology for aircraft, or whether running the railroad through John Gotbuck's back yard might be a concern.  John Gotbucks was probably dead, and his mansion was flattened.

If you bomb a country back into the Stone Age, you should not be surprised when that country takes the technology you have unleashed on them and improves on it.  Especially when you tell them that you will guarantee their safety, at your own expense.  While you are busily and happily cranking out billion dollar bombers, your "protectorate" is taking the same money they would have spent on a Luftwaffe, an Imperial Navy, or a hundred division Army, and building up a balanced infrastructure.

You won't get an HST in the United States until a couple of things happen.  First, you will have to empower the government far beyond what it is now.  The governments of Germany, France, and even the UK are much more willing to run over civil "entitlements" if they see a positive, lasting impact on the country as a whole.  So, to build an HST corridor implies, in my mind, granting the Federal, State, or even local governments the power to confiscate land under "emminent domain".  That won't happen- in fact, the current feeling of most Americans is that the government has too much power to do that already.

The second point is that you have to take away choices.  That's another kind of emminent domain.  Oltmann, living here just south of you, I know what driving through Atlanta is like.  What do you suppose would happen if the state government said, "We aren't going to build a highway into Atlanta.  Instead, you must use a train."

I would suspect the rail system, from MARTA to AMTRAK, would improve dramatically in terms of capacity- not neccesarily comfort.  I've been on regular commuter trains in Japan that were fast, clean, efficient, and run on time.  They still required rail employees to herd the crowds onto the train, and made the ride as comfortable as a hot, steamy summer day on the New York subway.

To build ridership, you have to take away the choices of a self indulgent society that believes it's neccessary to get into their SUV and drive 45 minutes into work 18 miles away.  Not going to happen in this country.

We have the technology to build an HST network.  We just haven't been forced into doing it... Europe has, and so has Japan.

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Posted by Anonymous on Sunday, January 13, 2008 10:33 AM

The amount of subsidy an economic activity needs to help cover its costs may seem like a red herring, but it is not for those who have to add up the pesky numbers and pay the bills.  Nor is it for the taxpayer who has to write a check to cover the subsidy.

The subsidies required by each mode of transport - air, highway, pipeline, rail, waterway - indicate its economic worth and financial viability.  Comparisons indicate the social value of each mode.  If people will not pay the full cost of an economic activity, its social value is presumed to be lower than the value of an activity that people will cover.  If all modes are subsidized, then the one that requires the greatest subsidy is presumed to have a lower social value than the competing modes.

Gross numbers, especially for comparison purposes, can be misleading.  For example, many people hear that a corporation earned billions of dollars and may say that it has earned obscene profits.  But net profits are not a good indicator of profitability.  The key number is return on invested capital.

The historical return for publicly held U.S. corporations has averaged approximately 9.5 per cent per year, as reflected in the S&P 500 over many decades.  During the same period an individual who bought AAA bonds would have had a return of approximately 6.5 per cent.   Understanding the profitability of a business requires a slicing and dicing of the numbers.  The same applies to the subsidies required by various forms of transport.  

The gross amount of subsidy received by a transport mode is meaningless until it is understood on a unit basis.  The unit for passenger transport is the passengers or passenger seat miles.  To note, for example, that airlines received a subsidy of $5.5 billion and compare it to Amtrak's $1.3 billion subsidy doesn't tell the reader about how many people benefited from the subsidy or its social value.   

Airlines carry many times more passengers than are carried by Amtrak; they create greater economic worth and social value.  Therefore, to get a meaningful comparison, the subsidy per passenger or passenger seat mile is the best way to do it. 

Capacity utilization is a measure of operating efficiency and is an indicator of how well the mode is being managed.  If a unit of activity is operating below its optimum capacity, it is relatively inefficient.  One way to increase the efficiency is to increase capacity turnover.  That is to say, increase the number of users without expanding capacity.  The best way to do this is to reduce the price - Amtrak's current long distance sale - to a point where the variable costs are covered and something is left over for the fixed costs.  The key in the business world, of course, is to ensure that the fixed costs are covered and the shareholders receive a return on their investment.  If capacity has been optimized, adding more capacity may be warranted.  In Amtrak's case, with the exception of the NEC, the system is not anywhere near optimum capacity. 

The airline vs. Amtrak subsidies that I showed were taken from figures presented by NARP.  They are preliminary.  I intended to dig into them when I have the time.  I am suspect of NARP's numbers.  They put a favorable spin on them to support their argument for more trains; they overlook numbers that detract from their position.

I did not claim that NARP represents all railway interests. 

The subsidies shown are per passenger averages.  I suspect that if they were calculated on passenger seat mile, the train would come off worse than it does by comparing the subsidy for passengers.  Airplanes run a lot more seat miles than trains.  So do personal vehicles, although the seat miles are difficult to calculate because no one knows for sure how many people occupy a private vehicle.

Southwest Airlines is owned 100 per cent by its shareholders.  One can argue that it gets a subsidy in that the airports that it flies out of were built with tax free municipal bonds, but the amount of the subsidy is marginal, especially in the case of the older airports, which were paid for long ago.  One can also argue that Southwest, as well as the other commercial air carriers, doesn't pay its fair share of the air traffic control system, but the point is arguable.  A forceful argument has been made that in fact commercial air carriers pay more than their fare share and are in turn subsidizing the general aviation operators.  But Southwest is not owned by the government.

 

 

 

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Posted by Anonymous on Friday, January 11, 2008 10:28 AM

During the 1970s, if I remember correctly, a proposal was made to have the federal government buy the U. S. railway infrastructure.  It was during a period when the railroads were struggling.  The idea was to make the rights-of-way available to any operator that could meet the operating standards, much like a public highway.  The railroad companies and unions pushed back hard.  They did not want to compete with other common rail carriers.  The proposal was a nonstarter.

Amtrak is a government owned railroad.  It owns the railway from Washington to Spuyten Duyve and New Rochelle, as well as from New Haven to Pawtucket and New Haven to Springfield.  It also owns the line from Philadelphia to Harrisburg and several small segments in other parts of the country.  The whole line from Washington to Boston is owned by a government or government entity and leased to the operators.  On its segments of the NEC Amtrak leases operating rights to freight carriers and commuter operators.

Amtrak owns 46 of its 525 stations.  Many of the others are owned by a local government, which acquired them with tax free municipal financing like that used to fund most of the nation's commercial airports.

Amtrak carries nearly 50 per cent of the commercial passengers between Washington and New York on its government railroad.  But it only totes six per cent of the passengers going from Washington to Boston. 

The lowest one way weekday air fares from Washington to New York range from $84 to $114, compared to $146 to $188 on the Acela and $69 to $98 on a regional train. 

The air fares are $79 to $301 from Washington to Boston compared to $166 to $211 on the Acela and $83 to $118 for a regional train. 

New York to Boston airfares range from $94 to $114 compared to $102 on the Acela and $59 to $84 on the regional train.

In 2007 the NEC trains covered their avoidable costs and contributed $258.3 million toward the interest and depreciation associated with the NEC.  It still had a $185.3 million deficit, assuming 80 per cent of the interest and depreciation is chargeable to the NEC.  If Amtrak was required to cover all of its costs, it would have to raise its NEC fares by an average of $18.50 per ticket.  And it would have to raise them further if it was expected to provide a return on equity. 

According to Alex Kummant, it would take approximately $7 billion of capital investments to make the NEC a truly high speed railroad.  Doing so would lop an estimated 25 minutes off the running time from Washington to New York and allow an average speed of 96.9 mph.  If it attracted the same number of riders as in 2007, this would add another $55.25 to the average ticket price, assuming that the capital investments were depreciation over a 30 life, and the government owned railroad was able to borrow the funds at the Treasury long bond interest rate.     

With the exception of the highest airfare, traveling on the Acela is more expensive than flying.  However, traveling on a regional train can be less expensive than taking the plane.  If Amtrak was required to recover its current costs, adding an average of $18.50 to the ticket prices shown above would close the regional train - plane price gap significantly.  And the cost of a true high speed railroad would push the fares even higher. 

The train is time competitive for downtown Washington to downtown New York traffic, but it is not competitive for time sensitive Washington to Boston traffic.  It is, of course, competitive for many intermediate city pairs.

These numbers tell us is that government ownership of the railroad is not a magic bullet.  They also tell us that passenger trains, no matter where they are found, have a tough time competing with other forms of transportation because of their capital intensive nature.  This is especially true in the case of a high speed railroad like the TGV that was built from scratch.     

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Posted by DMUinCT on Friday, January 11, 2008 9:32 AM

 I sill love the Acela, 150 mph is good, would another 20 mph make it any better in the short runs between stations in the Norteast ?

Don U. TCA 73-5735

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Posted by oltmannd on Friday, January 11, 2008 8:37 AM
 Paul Milenkovic wrote:

My point was only that only the railroads are expected to build and maintain their own right of way, so comparing subsidy costs is irrelevant.

Just comparing these numbers with a quick "back of the envelope" calculation, if you took the $1B and spent the $375 to do the commuter rail project and then stuck another $80M in the bank at 5% to cover the operating subsidy, you'd have $545 to give back to the taxpayers.

Here is a tale of two approaches to operating subsidies to passenger trains.  One way is to just throw up one's hands and say there are no valid baselines for comparison, so just give us the money.  The other way is to say that spending a small but quantifiable amount on operating subsidy can save big dollars on capital spending with another mode.

The advocacy community (cough, NARP, cough) has spent the past 37 years going about it the first way.  It is time we pursued the second way, making a case for passenger rail in quantifiable terms instead of simply getting mad at the Amtrak critics and everyone who doesn't agree with us.

I suspect NARP doesn't even try it because there is ZERO capital spending needed to accomodate all the LD train riders on other modes?

When you start to talk about corridors, though, even fractional highway lane capacity provided by rail can make a big difference on at or close to capacity highways.

A good approach would be to look at the total net present cost of alternative where the ongoing operating subsidy is brought back to a current value and added to the capital cost.   It might also be good to capture the highway construction traffic delays as part of the net present cost for the highway alternative - ever met a highway construction project that didn't include traffic delays?  These are rarely, if ever, considered as a cost by state DOT's, as far as I know.  Wrapping up all the costs together to try to get project funding would stop the sub-optimization caused by there being different kinds of money, capital and operating.  After all, money is money and a tax is a tax!

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by al-in-chgo on Thursday, January 10, 2008 4:29 PM

 Phoebe Vet wrote:
My point was only that only the railroads are expected to build and maintain their own right of way, so comparing subsidy costs is irrelevant.
 

And IIRC, railroads, as (mostly) private entities, have to pay property tax on the ROW too!  Talk about unbalanced! 

 

al-in-chgo
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Posted by JT22CW on Thursday, January 10, 2008 4:13 PM
 DMUinCT wrote:

 Just to clarify, not to start a debate.

Speed of the Acela has at least two different published values.  The U.S. Dept. Of Transportation had a News Release by then Secretart Rodney Slater on October 18, 2000.

"Acela Express services will operate at speeds of up to 150 mph between New York and Boston and 135 mph between New York and Washington D.C.   During testing on the NEC, the train achieved speeds of 170 mph."

The "BLE" news letter from the same time claimed 168 mph test speed. 

----------------------

    Amtrak awarded the $611 milllion contract to build 20 "American Flyers" (name later changed to Acela [Express]) to a Consortium led by Bombardier of Canada.  "Bombardier, which holds exclusive rights to TGV technologies in North America, was joined by Alstom, maker of the French TGV."   Bombardier held 75% of the Consortium, Alstom 25%.   The "Buy American" meant  building them in Bombardier's Barre Vermont (now closed) and Plattsburgh New York factories.  The builder, Bombardier, also provided the entire $611 million financing to Amtrak.

-----------------

Noted Amtrak changes among others: 

1. 4 axle cars, so one car could be removed for service or cars added.       

2. Must meet  the new 1999 DOT Safety Standard.   Engine crew protection, car integrity, emergency rescue from passenger cars

3. Must operate on 12,000 and 25,000 volts AC at 25 or 60 Hz.    

4. The proven Bombardier "Tilt Technology" to be provided to tilt 6.5 degrees.   

5. Airliner type interiors, latching overhead cargo bins, fold down large tables, 115 volt outlets at each seat.                     

 The finished train ended up 45% heavier than a TGV.  Another result was a train 4" TO(O) WIDE to meet the AAR Plate C Clearance Standard !   The "tilt" had to be reduced and speed restricted in some curves.  The 180 year old Canton MA Viaduct was widen(ed).   Shortly after service started the "to be corrected Punch List" grew to 92 items incluiding some of the engine shrouding blowing off at full speed.

  While tilting makes the ride comfortable, it does not lessen the impact on the rails in a curve.  The train pays for its self, but Amtrak has taken a big hit on track maintenance making the total a losing investment.  The ticket price is competitive with airlines, and with the airport security and delays, makes the city to city time faster.

  • Several HST models are designed to operate on diverse voltages, and even between DC and AC overhead (the TGV operates on both 3kV DC and 25kV 50Hz AC, for example; and some international high-speed trains are adapted to use Germany's oddball 15kV 16.67Hz AC system). Compared to those models, Acela Express is simpler.
  • "Airliner-style" interiors for high-speed trains have been de rigeur for close to half a century.
  • AAR Plate C appears to specify a maximum width of 10 feet 8 inches. Acela Express cars (including power cars) are actually two inches narrower than most US rolling stock, including (and especially) Amfleets, and of course four inches narrower than Plate C.
  • No TGV, apart from an experimental model (the P-01), is a tilt train.
  • Tilt trains such as the X2000 and ICE-T have similar truck configurations to the Acela Express (no articulation).
  • The Acela Express is 10.7 percent heavier than an equivalent-length (six passenger cars, two power cars) 804-class ICE 1 train. (Direct comparisons with the TGV are, for the most part, apples/oranges comparisons.)
  • As for track wear, it seems like deferred maintenance remains the order of the day in the USA. Increasing superelevation in concert with active-tilt would help with track wear on tilt trains. Given the higher average speeds of tilt trains in other countries (which means that the trains are exerting more force per mass) as well as tracks being of lighter weight, perhaps the report about the "big hit on track maintenance" is alarmist. Certainly, high-speed rail alignments experience harder forces than tilt trains would exert on a traditional rail alignment; but the benefits outweigh the costs, not to mention the costs being far lower than the infrastructure costs of competing modes.
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Posted by Paul Milenkovic on Thursday, January 10, 2008 3:24 PM

My point was only that only the railroads are expected to build and maintain their own right of way, so comparing subsidy costs is irrelevant.

Just comparing these numbers with a quick "back of the envelope" calculation, if you took the $1B and spent the $375 to do the commuter rail project and then stuck another $80M in the bank at 5% to cover the operating subsidy, you'd have $545 to give back to the taxpayers.

Here is a tale of two approaches to operating subsidies to passenger trains.  One way is to just throw up one's hands and say there are no valid baselines for comparison, so just give us the money.  The other way is to say that spending a small but quantifiable amount on operating subsidy can save big dollars on capital spending with another mode.

The advocacy community (cough, NARP, cough) has spent the past 37 years going about it the first way.  It is time we pursued the second way, making a case for passenger rail in quantifiable terms instead of simply getting mad at the Amtrak critics and everyone who doesn't agree with us.

If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?

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Posted by oltmannd on Thursday, January 10, 2008 12:27 PM

 JT22CW wrote:
Indeed.

Agree!

Down here in the "interesting" southern state of GA, there is, and has been a proposal to do a commuter rail project.  The capital cost is $375M or so with an annual operating subsidy of $4M or so.  Do get the equivalent congestion relief by building highways would cost about $1B, presumably with no operating subsidy.

Just comparing these numbers with a quick "back of the envelope" calculation, if you took the $1B and spent the $375 to do the commuter rail project and then stuck another $80M in the bank at 5% to cover the operating subsidy, you'd have $545 to give back to the taxpayers.

Commuter rail is a no-brainer!  But, the project's been stalled for years because of the way the "game" is rigged.  Transportation capital money comes from the state, but operating subsidies have to come from the local counties.  Since the state has lots of small counties, any regional project requires all of them to get together and agree how to fund and split the operating subsidy.  This particular project runs through 5 counties.  The state won't even start considering letting any capital money loose until they have solid agreements in place from each county guaranteeing they pay the operating subsidy for 10 years.  Failing to get this, the state will have no trouble coming up with the $1B for the highway improvment, though.

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by DMUinCT on Thursday, January 10, 2008 12:05 PM

 The 157.6 miles from Boston to New Haven, the section with the most curves as it follows the "Shore Line" of the former New Haven Railroad, was not under wire untill 1999. All track has been rebuilt and high speed switches installed (with moving frogs).

 Amtrak service in this area was with F40-PH locomotives and Amfleet cars that toping out at 110 mph. Service was roughly every 2 to 4 hours. Today you have an Acela or a Regional train with the HHP8 every hour, more often at peak hours.  The Acela has two 6,000 HP locomotives, one on each end, one pulls, the other pushes, that got to be tough on curves.

  The Right Of Way is not fenced, ever see a Deer that was hit by an Acela, no one hurt but Acela had to be towed.

Don U. TCA 73-5735

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Posted by Paul Milenkovic on Thursday, January 10, 2008 10:28 AM

The remark that the Acela is costly in terms of track maintenance -- I am not doubting or demanding references, just curious.  Is the maintenance impact of the Acela relative to what they used before (AEM-7 and Amfleet) quantifiable, or is there anecdotal evidence regarding extra or more frequent repairs?  Amtrak is also said to be critical of the Amfleet streetcar-style inside-bearing trucks and prefers the GSI swing motion trucks on account that Amfleet is "hard on the tracks."  Is any of this quantifiable or is it just a hunch or expert knowledge from operating or maintenance people?

The reason I ask, my dad was at GATX in the late 60's and early 70's when there was a research interest in high-speed rail.  He talked about the dynamic or impact forces going up with the square of speed, and part of the interest in EMU's over locomotives (OK, power cars) was having enough adhesion not to get into a high-speed wheel slip, part of it was reducing axle loads to reduce maintenance requirements on the track.

For all of the talk about America needs to be ashamed for not having HSR, HSR is a costly undertaking, not only in terms of a purpose-built track, but in terms of maintenance of both track and rolling stock.  Much of the British APT research was on addressing those concerns.  I am not questioning whether 150 MPH trains are hard on the tracks, but I am curious if the maintenance burden of HSR is a known, quantifiable item. 

If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?

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Posted by DMUinCT on Thursday, January 10, 2008 9:59 AM

 Just to clarify, not to start a debate.

Speed of the Acela has at least two different published values.  The U.S. Dept. Of Transportation had a News Release by then Secretart Rodney Slater on October 18, 2000.

"Acela Express services will operate at speeds of up to 150 mph between New York and Boston and 135 mph between New York and Washington D.C.   During testing on the NEC, the train achieved speeds of 170 mph."

The "BLE" news letter from the same time claimed 168 mph test speed. 

----------------------

    Amtrak awarded the $611 milllion contract to build 20 "American Flyers" (name later changed to Acela) to a Consortium led by Bombardier of Canada.  "Bombardier , which holds exclusive rights to TGV technologies in North America, was joined by Alstom, maker of the French TGV."   Bombardier held 75% of the Consortium, Alstom 25%.   The "Buy American" meant  building them in Bombardier's Barre Vermont (now closed) and Plattsburgh New York factories.  The builder, Bombardier, also provided the entire $611 million financing to Amtrak.

-----------------

Noted Amtrak changes among others: 

1. 4 axel cars, so one car could be remover for service or cars added.       

2. Must meet  the new 1999 DOT Safety Standard.   Engine crew protection, car integrity, emergency rescue from passenger cars

3. Must operate on 12,000 and 25,000 volts AC at 25 or 60 Hz.    

4. The proven Bombardier "Tilt Technology" to be provided to tilt 6.5 degrees.   

5. Airliner type interiors, latching overhead cargo bins, fold down large tables, 115 volt outlets at each seat.                     

 The finished train ended up 45% heavier than a TGV.  Another result was a train 4" TO WIDE to meet the AAR Plate C Clearance Standard !   The "tilt" had to be reduced and speed restricted in some curves.  The 180 year old Canton MA Viaduct was widen.   Shortly after service started the "to be corrected Punch List" grew to 92 items incluiding some of the engine shrouding blowing off at full speed.

  While tilting makes the ride comfortable, it does not lessen the impact on the rails in a curve.  The train pays for its self, but Amtrak has taken a big hit on track maintenance making the total a losing investment.  The ticket price is competitive with airlines, and with the airport security and delays, makes the city to city time faster.

Don U. TCA 73-5735

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Posted by Simon Reed on Wednesday, January 9, 2008 2:45 PM

Not precisely a definative reply but this article:-

http://www.railwaygazette.com/news_view/article/2007/09/7742/new_lines_boost_rails_high_speed_performance.html

gives a ranking of the fastest point to point trains in each country.

US ranks 12th.

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Posted by JT22CW on Wednesday, January 9, 2008 12:33 PM
Indeed.
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Posted by Phoebe Vet on Wednesday, January 9, 2008 12:21 PM
My point was only that only the railroads are expected to build and maintain their own right of way, so comparing subsidy costs is irrelevant.

Dave

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Posted by JT22CW on Wednesday, January 9, 2008 11:56 AM

Already tried in Britain in relation to rail, right?

Open access does not exist anywhere in the world, at present. The complexity of dispatching would require a lot of federal oversight. It'd be like if we had Amtrak take over all the railroads, or if you like, a return to USRA. (And IIRC, the prevailing judgment is that USRA was directly, not indirectly, responsible for the so-called "golden age" of US railroading.)

Hold on; we gotta take away direct subsidy payment to all commuter rail and transit, too. Let's see what that results in...   

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Posted by Phoebe Vet on Wednesday, January 9, 2008 11:42 AM

I have a solution to the red herring about subsidies.

Let's eliminate all direct payment subsidies to Amtrak.

Then we'll have the Federal and State governments build, and maintain all the track and right of ways, like they do the highways that are the right of way for busses and trucks.  Then we'll have the local governments build and maintain all the train stations and yards like they do the airports that are the terminals for the airlines. And, of course, the dispatch centers which perform the same function as Air Traffic Control.  Oh, did I forget hire and pay the railroad police like they do the traffic enforcement and accident investigation on the highways and at the airports.

With the government owned infrastructure open to anyone, subject to a rr fuel and ticket tax, I bet you would see lots of new railroads serving both freight and passengers.  Anyone who could afford to buy an engine and a couple of cars could start scheduled or on demand passenger service.

 

Dave

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Posted by JT22CW on Wednesday, January 9, 2008 11:15 AM

The Acela Express is not "based on the TGV". The TGV is not a tilt train, like the AE is. The only things that the AE shares with the TGV are the traction components and wheel truck setup. Other than that, it's a new-build that is distantly related (pardon the pun) to Bombardier's LRC.

During testing, the AE hit 169 mph and did not hit or exceed 170 mph.

Germany's ICE 1 is comparable to Acela Express in weight, although overall it is lighter. (ICE 1's power cars are 172,000 lbs whereas AE power cars, not "locomotives", are 204,000 lbs; the heaviest cars on the ICE 1 weigh a bit over 128,000 lbs whereas the AE's heaviest cars, next to the power cars, weigh 142,000 lbs. Going with newer ICE designs, the average per-car weight of ICE-T tilt trains is 110,231 pounds.) Not only is the AE not all that much heavier than other high-speed trains, it's not even that heavy for US passenger rolling stock.

It's not necessary to "take the curves out" on traditional railroad rights of way, such as the NEC is; certainly if the ICE-T can achieve average speeds of 120 mph, and the X2000 achieve average speeds of 109 mph, on traditional railroads, the AE ought to be able to achieve similar results. The FRA has gotten in the way, in some respects, requiring "Class 8 track" (whose specifications still elude me; France and Germany run high speed on 132 lb/yd track whereas more 140 lb/yd tracks on the NEC are limited to "Class 7"??) for operation faster than 125 mph, and of course the need for newer constant-tension catenary wire, for rapid operation on the former PRR in particular.

As far as "build it and they will come", all the proofs to the effect (the high-speed endeavors of other countries combined with the example in the USA and even Canada) ought to make arguments to the contrary moot.

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Posted by DMUinCT on Wednesday, January 9, 2008 9:11 AM

 Lets backup a little bit.

  The "Acela" does not "rattle" down the track.  Inside at full speed it rides better than an Amfleet Car.  The locomotive rides hard at 150, about the same as an F40-PH at 80 mph.

  The Acela was based on Alstrom's TGV 300 klm French train. U.S. Safety Standards has made the Acela heavier than the French version. As the Northeast Coridor is built on old railroad Right of Ways, buying more land to take the curves out would be too costly taking homes and factories, more acceleration was needed.  Gearing was set for a 250 klm cruse speed (153), It has hit over 170 mph during testing. Multi-deck parking garages are built, not only in the city, but also outside majior cities on the Interstate Beltways.

  "You Build It, They Will Come"  The 20 Acela Bullet Trains running between Boston and Washington reported a 19% increase in riders in just 2007.

 

Don U. TCA 73-5735

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Posted by JT22CW on Wednesday, January 9, 2008 2:22 AM
I don't see a single reference to support anything you've asserted. Care to provide them? As far as I've heard, plenty of direct subsidy goes into air traffic control, and without it, it would fall apart. (Is the Airline Trade Group an unbiased source?)

I've pointed out on another thread that claiming "per passenger" subsidy is a red herring, especially when seat-mile availability is not brought into the equation. In addition, would it be an endeavor to keep intercity passengers captive to domestic air travel (which burns 13 billions of jet fuel per year) in order to keep the passenger miles up, rather than giving them a choice in modes? The continued question of why there are highway and aviation trust funds but no rail trust fund must be kept in the spotlight.

Attacking NARP, especially in the vein of them representing all potential rail passengers, is also a logical fallacy.  As is attempting to claim (by inference) that long-distance trains operating at an average speed of 40 mph are the same as high-speed trains operating at average speeds of between 125 and 175 mph.

SWA is not a 100-percent private enterprise. They do not own their own airports, nor do they operate their own ATC system out of pocket that is dedicated to their operations. Their counterclaim is utterly invalid.
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Posted by Anonymous on Monday, January 7, 2008 4:59 PM

Southwest does not fly from DFW if by that you mean DFW International Airport.  It flies from Love Field, which is approximately 11 miles east of DFW.

Southwest flies 60 flights a weekday between Dallas and Houston, 26 flights between Dallas and Austin, and 30 flights between Dallas and San Antonio.  Southwest's 737s can carry an average of 149 passengers.  Its load factor in 2007 on its Texas flights was approximately 80 per cent.  This means that it carried approximately 3,595,072 passengers between these three cities during the week.  The number of flights on the weekend and over certain holiday periods varies from the weekday operations. 

Add in the passengers carried on the weekends or special holiday flights, plus the passengers carried to its other Texas cities (Amarillo, Corpus Christi, El Paso, Harlingen, and Lubbock), and Southwest carried more passengers in Texas in 2007 than all of Amtrak's long distance trains (3,819,267). 

Southwest is only one of the many airlines serving Texas.  When you throw in the passengers carried by the other carriers (American, Continental, etc.) within Texas, as well as into and out of Texas, the airlines serving Texas probably enplaned and deplaned more passengers than Amtrak carried over its system with the possible exception of the Northeast Corridor. 

Approximately 15 years ago, if I remember correctly, a consortium of investors proposed building a high speed rail line to connect first two and then all the Texas Triangle cities.  I believe the first candidates for the rail line were Dallas and Houston.  Their proposal did not fly - no pun intended - because the state legislature would not guarantee the bonds needed to raise the funds for the project.  They promoters could not raise enough money in the capital markets to float the project.  It died. 

Southwest Airlines, amongst others, opposed public funding for the project.  It argued that a potential competitor should not receive government money to complete against a private enterprise. 

Supporters of the rail project argued that Southwest was hypocritical.  It gets, so they argued, a hefty subsidy from the federal government because the airports that if flies from were built with municipal bonds, which attract a lower interest rate because they are tax free.  This in turn supports lower landing fees, etc.  The supporters also pointed to the argument that the commercial airlines, including Southwest, don't pay their fair share of the costs associated with the air traffic control system.  These two points are debatable.  The airline trade group, for example, has some reasonable numbers that show airline passengers pay a disproportinately high percentage of the control system costs.

The subsidies received by the airlines, even in a worse case scenario, don't match the subsidies received by Amtrak's passengers, especially those traveling on long distance trains.  In 2007 airline ticket buyers received an average subsidy of approximately $5.75 per passenger.  Amtrak's passengers, by comparison, received an average system wide subsidy of approximately $40 per ticket.  The long distance train riders received an average subsidy of approximately $138 per passenger. 

In addition to the federal subsidies pay to Amtrak, it gets other subsidies.  For example, the Dallas and Fort Worth stations are owned by the cities.  Amtrak shares space in them with other carriers and pays a nominal fee for its space. 

The Dallas Union Station complex is being refurbished.  Yep!  The city will use taxpayer bonds to do the job.  One could argue, I think, that this is a subsidy akin to the airport subsidy referred to above.

The airline subsidy numbers were taken from NARP's website and are subject to revision.  Other than adding them up, I have not yet had time to dig into them.  

NARP makes a big deal about the subsidies received by airline passengers and highway users.  By comparision, however, the subsidies received by Amtrak's patrons appear to be higher.  I have suggested to them that they should focus on rail passenger issues. 

 

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