The one thing Samantha failed to factor in about California is it is the Liberal bastion of the nation. We are nearly two months late getting a budget signed and the state is $15 billion in debt. The Govenator much to the chagrin of his own party has even offered the Dems a 1cent sales tax increase to be retired when the red ink is eliminated. The Dems are not willing to give up one penny of Pork in return. I have lived to retirement age and in my lifetime can't recall a sales tax increase ever being retired.
Al - in - Stockton
As you say, the plug-ins are intended for commter travel; and therefore are not germain to intercity travel.
What would be a significant number of Texans? Most assuredly, not even 5% of the State's registered drivers would be attracted to rail travel. On the other hand, could improved train service attracting an average of 300 passengers per trip be considered significant?
Furthermore, the question is not so much about owners of gas-guzzlers as all car owners. Owners sensitive enough to buy a fuel-efficient vehicle will be more sensitive to costs.
What facts does Texas give us? The two existing long-distance trains are too slow and erratic for any meaningful contribution to intra-state travel. People have switched to Amtrak with the cost of gas. The 14% increase in ridership is significant for Amtrak, even it it represents only about a 0.1% change in mode choice nationally. While the Amtrak network is not ubiquitous as are the roads, or frequent on most lines to accommodate the needs of most travelers, trains still attract and benefit riders that are significant in numbers with respect to the costs and markets of the service.
Even acknowledging that it's improper to compare all of California [for example] to the number of rail trips; the populations in the rail corridors themselves do not reflect the smaller overall corridor travel (intercity, non-local trips). Corridor trips for all modes is the truer base for measurement and more likely to yield a more relevant and significant proportion for rail use. The corridor demand itself does not include non-local travel to non-corridor destinations or the substantial proportion (~85%?) of the population not making a non-local trip.
The load factor is a fairly volitile measure. The average load for the Hiawathas is quite low; but this belies the packed rush hour trains. I think this has more to do with consumer sensitivity to fares rather than any aversion to train travel; but that's another discussion and a beef of mine.
HarveyK400 wrote: Samantha, Regarding hybrid cars: How good is the fuel economy of a plug-in hybrid after the first 40 miles? With the exceptions of Dallas-Fort Worth and a few other city pairs, 40 miles would be enough juice to get you to an Amtrak station for an intercity trip.The kilowatt hours aren't free either.Power generation still relies substantially on fossil fuels.Railroads are evaluating hybrid locomotives too.Maybe only 2% of all Californians take Amtrak.That doesn't mean 98% of the population uses California-99 during the year. The percentage of rail travel in given corridors rather than all travel in every direction would be considerably higher.One Surfliner accounts for at least a quarter lane capacity in peak hours.Harvey
Samantha,
Regarding hybrid cars:
Maybe only 2% of all Californians take Amtrak.
Harvey
The current crop of hybrids gets about 40 mpg around town and 48 mpg on the highway. GM's new Volt will be able to run the first 40 miles on the re-chargeable batteries. After that a small gasoline engine will kick in to recharge the batteries whilst powering the vehicle with both systems. The Volt, however, is intended to be a commuter car, which should work well, since the average commute in America is just over 20 miles.
The idea that a significant number of Texans will give up their gas guzzling vehicles in favor of trains is not supported by the facts. What they are doing, however, is moving to smaller, more fuel efficient vehicles, as an interim step, with the ultimate goal being alternate fueled vehicles.
Most Texans don't want to drive to the railway station, get a train, and then wrestle with getting suitable transport when they arrive at their destination, which in this state is more often than not a suburban location. They will take a plane if time is critical, or they are going more than 250 miles.
Except to the extent environmental constraints increase the cost of driving or flying, they are not the primary drivers for alternate modes of transport. My argument is simple. Trains only make sense in highly congested corridors where the cost of expanding the highways or airways is cost prohibitive. There are no areas in Texas, with the possible exception of the mix master in Dallas, where this is the case. However, this is likely to change as the population of Texas increases.
Many Californians live outside the practicable service area for the corridor rail services and, therefore, cannot use them. Including them in an estimate of the percentage of people who ride the corridor trains understates the percentage of people who live within reach of the corridor who actually use the trains. On the other hand, California, has a high concentration of people in southern California and the Bay area, which are served by the corridor trains. I don't have the data to estimate how many people live there, as opposed to the rural areas of the state, but if the demographics are like other Standard Metropolitan Statistical Areas, it is a significant per cent of the state's population. Accordingly, it is probably fair to say that only a small percentage of Californians, including those who live near the corridors, use the trains. The relatively low load factors seem to support this view.
SRen wrote: Phoebe Vet wrote: The attitude you describe is indicative of the "chicken vs the egg" senario the Amtrak faces.People don't ride the trains because the are too slow, too infrequent, and don't go enough places. Amtrak won't make the trains faster, more frequent, or add more destinations because not enough people ride them.So here we sit.It's not about how much money, it's about priorities. How many miles of high speed rail could we lay for the price of ONE aircraft carrier, or for the cost of the 23 new (european built) helicopters for the President's transportation desires?Big ditos and hazahs to Phoebe Vet. Samantha always uses the poor performance of underfunded Amtrak to argue against any need to invest in passenger trains. The reason why Texans think cars first and planes second is because infrastructure that suports autos and airlines is well funded. If rail infrastructure were funded on the par with highways and airways passenger trains would be a viable alternative for travel in Texas.Oh, by the way, according to my crystal ball that I have next to my computer we will soon be treated to a lecture by Samantha stating that Texans will never leave behind their cars for trains, she will probably throw in some comment about her red neck neighbors and their Smart cars.
Phoebe Vet wrote: The attitude you describe is indicative of the "chicken vs the egg" senario the Amtrak faces.People don't ride the trains because the are too slow, too infrequent, and don't go enough places. Amtrak won't make the trains faster, more frequent, or add more destinations because not enough people ride them.So here we sit.It's not about how much money, it's about priorities. How many miles of high speed rail could we lay for the price of ONE aircraft carrier, or for the cost of the 23 new (european built) helicopters for the President's transportation desires?
The attitude you describe is indicative of the "chicken vs the egg" senario the Amtrak faces.
People don't ride the trains because the are too slow, too infrequent, and don't go enough places. Amtrak won't make the trains faster, more frequent, or add more destinations because not enough people ride them.
So here we sit.
It's not about how much money, it's about priorities. How many miles of high speed rail could we lay for the price of ONE aircraft carrier, or for the cost of the 23 new (european built) helicopters for the President's transportation desires?
Big ditos and hazahs to Phoebe Vet. Samantha always uses the poor performance of underfunded Amtrak to argue against any need to invest in passenger trains. The reason why Texans think cars first and planes second is because infrastructure that suports autos and airlines is well funded. If rail infrastructure were funded on the par with highways and airways passenger trains would be a viable alternative for travel in Texas.
Oh, by the way, according to my crystal ball that I have next to my computer we will soon be treated to a lecture by Samantha stating that Texans will never leave behind their cars for trains, she will probably throw in some comment about her red neck neighbors and their Smart cars.
If you had paid attention to my posts, you should know that I favor rapid corridor rail where the cost of upgrading highways and airways is prohibitive, and the market is sufficient to cover the operating costs. I don't favor a large investment in passenger rail, e.g. NARP and Passenger Rail Working Group, where there is little justification for it.
I have buttressed my views on passenger trains and public transit (pro and con) with numbers that can be validated. They are predicated on hours of homework as opposed to unsubstantiated opinions based on little if any analytics.
Accusing my neighbors of being red necks, without knowing any of them, is out of order and offensive. Texans can think for themselves. They tend to make choices that best suit their needs. This is the reason most of them have chosen highways and airways.
California is to Texas as day is to night. One only needs to look at the political landscape to begin to get an idea of the magnitude of the differences.
Californians may be flocking to its state supported passenger trains, but they still loose a lot of money. They are on track to lose $37.5 million before other charges in 2008. They lost an average 14.2 cents a passenger mile during the first three quarters of FY008 whilst averaging 32.3 per cent of capacity.
For the first three quarters of FY08 the Pacific Surfliner, Capital Corridors, and San Joaquin's carried 3,974,111 riders. The population of California in 2006 (latest U.S. Census Bureau estimate) was 36,457,549. If the riders on these train were one time a year only passengers, approximately 10.7 per cent of Californians took to the rails, excluding the long distance trains, which carry a relatively small number of passengers. But a significant per cent of the riders probably take the train more than once a year. Many of the Pacific Surfliner riders, for example, are commuters. If the riders only took the train twice a year, the per cent of Californians who rode the train would drop to approximately 5.3; three times a year would drop to 3.6 per cent and so on and so forth.
Gasoline prices have dropped more than 30 cents a gallon in Texas. It is hard to predict where they will be next year. In time, however, they will increase as petroleum becomes more difficult to find and produce.
In 2010 GM, Nissan, Toyota, etc. will be offering plug-in hybrid vehicles that will get considerably better mileage than today's vehicles. As Americans move away from gas guzzling vehicles, with an increasing number opting for alterative fueled ones, the argument that high fuel costs will be an enabler of passenger rail, high speed or otherwise, will fall by the wayside.
As far as the gas prices go, I assume it will go just like it did in the '70s.
Gasoline will quadruple in price, then will fall back 30 or 40% and everyone will say "now that's more like it" and be happy with the new "lower" price even though it's double what it was when they started.
I have another analogy, but it's political, so I will bite my tongue.
Dave
Lackawanna Route of the Phoebe Snow
Texas can't be that much different than California when it comes to people in love with their four wheelers and Californians are turning to the train in record numbers.
The very best service ever provided by SP and AT&SF down the San Joaquin Valley four daytime trains. Amtrak California operates seven San Joaquins today and is looking to add probably two more. It is the same story with the Capitols and Surfliners. Record numbers of riders and the need for additional trains.
On this falls ballot HSR may become reality. Early polls show the measure has a better than 65% chance of passing. This is a 9 billion Bond measure to provide service between San Francisco and Los Angeles with connecting service between Sacramento and Los Angeles. Both services will operate through the San Joaquin Valley. If approved it will provide 7000 jobs at the height of construction. The proposed service would provide hourly service between San Francisco and Los Angeles and every other hour service between Sacramento and Los Angeles. There is already proposals on the table to extend the service from Los Angeles to San Diego and possibly from LA to Santa Barbara. One other proposal would extend the service north from Sacramento to Redding via the old highway 99 cities.
I for one believe that if fuel prices continue their upward trend, which looking in my crystal ball seems most likely Californians will be more than willing to park there cars and take the HSR. I would bet that if it is built and operates at the speeds proposed within two years the airlines will have half the flights they do today between LA and SF and LA and Sacramento. And I would go further and say the new service will eventually surpass the NE corridor for ridership between Boston-New York-Washington.
Phoebe Vet wrote:The attitude you describe is indicative of the "chicken vs the egg" senario the Amtrak faces.People don't ride the trains because the are too slow, too infrequent, and don't go enough places. Amtrak won't make the trains faster, more frequent, or add more destinations because not enough people ride them.So here we sit.It's not about how much money, it's about priorities. How many miles of high speed rail could we lay for the price of ONE aircraft carrier, or for the cost of the 23 new (european built) helicopters for the President's transportation desires?
Thanks Samantha:
I knew Eeyore wouldn't let me down.
Incidentally, that is not a criticism of either party, but of the entire beltway mentality. Twisted priorities.
Phoebe Vet wrote: gardendance wrote: Samantha wrote: Southwest Airlines has 60 flights a day between Dallas and Houston. If the economy goes south, it can reduce the number of flights to 40 or 50 and still have a viable operation. It can park the excess airplanes, layoff the crews, and save on the other variable costs, e.g. fuel, maintenance, etc. At least Amtrak's not going to decrease it's Dallas to Houston service anytime soon.If Southwest can fill 60 flights a day between Dallas and Houston, I see no reason why a 150 MPH Acela type service running 5 or six trains a day in each direction couldn't capture a significant portion of that. Surely big flat rural Texas could build a relatively straight ROW.OK Samantha. You may now tell me why investment in such a service would be foolish.
gardendance wrote: Samantha wrote: Southwest Airlines has 60 flights a day between Dallas and Houston. If the economy goes south, it can reduce the number of flights to 40 or 50 and still have a viable operation. It can park the excess airplanes, layoff the crews, and save on the other variable costs, e.g. fuel, maintenance, etc. At least Amtrak's not going to decrease it's Dallas to Houston service anytime soon.
Samantha wrote: Southwest Airlines has 60 flights a day between Dallas and Houston. If the economy goes south, it can reduce the number of flights to 40 or 50 and still have a viable operation. It can park the excess airplanes, layoff the crews, and save on the other variable costs, e.g. fuel, maintenance, etc.
Southwest Airlines has 60 flights a day between Dallas and Houston. If the economy goes south, it can reduce the number of flights to 40 or 50 and still have a viable operation. It can park the excess airplanes, layoff the crews, and save on the other variable costs, e.g. fuel, maintenance, etc.
At least Amtrak's not going to decrease it's Dallas to Houston service anytime soon.
If Southwest can fill 60 flights a day between Dallas and Houston, I see no reason why a 150 MPH Acela type service running 5 or six trains a day in each direction couldn't capture a significant portion of that. Surely big flat rural Texas could build a relatively straight ROW.
OK Samantha. You may now tell me why investment in such a service would be foolish.
Getting Texans to use trains will require two biggies.
The first will be a sea change in attitudes about taking the train. People in Texas think car first and airplane second. Less than one per cent, if that many, people in Texas think train. And until driving or flying become cost prohibitive - we are not even close to that point - trains are not likely to play a significant role in the Lone Star State, except for commuter rail.
The second is investment capital. Amtrak estimates that it would cost $25 to $40 million a mile to build high speed rail. And this does not include the real estate and equipment costs. Thus, a line that paralleled I-45 from Dallas to Houston would cost approximately $7.8 billion before real estate and equipment costs. The real estate costs would probably bring the figure well north of $10 billion.
Texas looked at high speed rail about 15 years ago. The fare box would not cover the cost; therefore, the proponents looked to the state for support, and the state said no. Given the debt loads being carried by Texans, as well as Americans, I doubt that the state would now say yes to high speed rail.
A more feasible albeit not ready for prime time plan would be rapid rail. But it won't work until the cost of driving and flying, driven by congestion, gets much higher than it is. Even it would require a significant outlay of money by the state and federal governments. And for the reasons cited I don't see it happening in the near future.
The most likely next passenger rail system in Texas will be the Austin to San Antonio commuter rail service and possibly the Houston to Galveston rail corridor. They will not be high speed. In fact, they probably won't even be rapid rail, which I define as trains that average 80 mph between end points.
Amtrak gave the Dallas to Houston market a go. It failed. And the service was discontinued.
I was using an analogy to show that a business with a high demand has plenty of wiggle room to adjust its cost. Amtrak, outside of its major corridor operations, does not have the flexibility to adjust its cost structure like a real business.
Southwest's load factor in 2007 was 72.6.
They operate 3400 flts a day with 527 planes.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
Samantha didn't say Southwest fills their flights, she says they have 60 flights.
It's a bit ironic that some of the talk on this thread is about how increased passengers has not overcome increased cost, and so has not resulted in increased surplus money, but that decreased passengers WILL result in decreased surplus money, or rather increased deficit money. I almost forgot myself and typed 'profit' and 'loss', forgetting that the passenger railroads we're talking about are not for profit enterprises.
Patrick Boylan
Free yacht rides, 27' sailboat, zip code 19114 Delaware River, get great Delair bridge photos from the river. Send me a private message
Both Samantha and Harvey are right on target with their remarks about the Eagle. It's nb schedule of 31hrs-14min to cover the 1305 miles between San Antonio and Chicago equates to a blazing 41.75 mph average speed. But I think its chronic inability to maintain even that pathetic schedule is a greater disgrace. The performance report I remember seeing for the latest month indicated the Eagle arrived in Chicago at least 2 hours late every single day and it averaged arriving over 3 hours late on each trip that month.
The Amtrak website even has a "Service Alert" advising passengers to expect delays of 2-6 hours and suggests those traveling from St. Louis to Chicago should consider booking their reservation on one of the regional Lincoln Service trains rather than the Eagle.
Delays are primarily attributed to "freight congestion" and track work. Both Amtrak and Texas rail advocate groups have repeatedly complained to the Union Pacific about the train's delays. Despite UP assurances of improvement, the Eagle's performance hasn't gotten any better and may, in fact, have deteriorated recently. I personally think the UP would be delighted to have both the Eagle and the Sunset Ltd off its rails and wouldn't put it past them to purposefuly delay both trains in hope a decline in ridership will lead to their eventual discontinuance. If that's the UP's strategy it's at least temporarily been thwarted by high gas prices which have prompted recent increases in passenger numbers. Unfortunately new first time riders are likely to be turned off from future train travel after experiencing the miserable performance of the Eagle.
I would hate to see the Eagle discontinued since it's the only train serving my neck of the woods and we do ride it occasionally. I used to recommend to family and friends that they consider taking the train but no longer do so because I'm embarrased by its shortcomings. If there's no hope for future performance improvement it may be best to discontinue the train - just shoot the Eagle and put the poor thing out of its misery.
Mark
Not only is the Texas Eagle schedule padded like a hockey goalie, especially in Texas, it cannot even keep to it.
As of August 15th Number 21 was late by an average of 104 minutes arriving into Fort Worth. By the time it got to San Antonio it was late by an average of 126 minutes. That's more than two hours, but who is counting? Instead of arriving in San Antonio at 10:25 p.m., it arrives usually after midnight. On 37 occasions this year it arrived after 2:00 a.m., and on two occasions it did not arrive until 7:30 a.m. Its departure time from San Antonio is 7:00 a.m. On those occasions when the train is expected to arrive in San Antonio after midnight, passengers connecting with Number 2 are taken off the train in Austin and placed on a bus that takes them to Houston.
Number 22 has not been much better. It has been late arriving into Fort Worth by an average of 67 minutes. At Chicago it was on time 0% during July. And it has only been on time 2.8 per cent of the time in 2008. Amtrak counts a long distance train on time if it arrives within 30 minutes of the advertised. This means that Number 22 was late at its end point by more than 30 minutes 97.2 per cent of the time.
The major culprit is freight train congestion on the UP and BNSF. The Eagle runs on a single track railroad for most of its route. It is chockers with traffic. Thus, Eagle passengers get numerous opportunities to watch Texas Longhorns from a stationary platform.
Another problem is a circuitous route between Dallas and San Antonio. Whereas it is only 275 highway miles between Big D and the Alamo City, it is 314 miles via the Eagle route. Out of Dallas the train heads west to Fort Worth, a distance of approximately 32 miles. Then it runs south on the BNSF to Temple, which is not the most direct route between Fort Worth and Austin or San Antonio. From Temple it runs over the former Katy line to Taylor, which is another dog leg. At Taylor it picks up the UP line for the run through Round Rock to Austin. And at San Antonio it has to loop around to get to the Amtrak Station, which is located on the old SP line.
Because of the schedule, as well as the train's inability to adhere to it, the Fort Worth crew gets off the train in Austin, together with the dinning car crew, and a new train crew takes the train from Austin to San Antonio. In the morning a train crew takes the train from San Antonio to Austin, where they hand the train over to a Fort Worth crew, and go back to San Antonio in a van. This just ups the cost even more of running the Eagle.
As noted Number 21 gets 10 hours and 5 minutes to go from Dallas to San Antonio, whereas Number 22 gets 8 hours and 20 minutes for the reverse trip. By comparison MapQuest says that it should take 4 hours and 29 minutes to drive it, and Greyhound, which has 18 schedules a day between Dallas and San Antonio, runs it off in approximately 5 hours and 30 minutes. Most people, irrespective of the cost, are not going to spend more than 10 hours getting from Dallas to San Antonio when they can get there in a fraction of the time by alternative means.
Amtrak has been offering a $26 promotional fare from San Antonio to Dallas and a $31 dollar fare from Dallas to San Antonio. But the word is out. Who wants to arrive in San Antonio at 12:30 a.m. in a station where getting a taxi or public transport is difficult at best?
KUT Austin (NPR) reported recently on the increase in Amtrak's ridership. The reporter got many facts wrong, although the thrust of her reporting was correct. It was obvious that she has never been on the Eagle. She noted, however, that Amtrak has a reputation in Texas for not being able to run its trains on time.
The best way to improve passenger rail service in Texas would be to discontinue the Eagle, along with the equally dismal performing Sunset Limited, and use the monies, together with state funds, to begin developing a true rapid rail corridor in the Texas Triangle. People will use the train if it is frequent, reliable, safe, comfortable, and economical. But they will not flock to a consistently late running, once a day train, which serves stations with signs in the parking lots advising motorists not to park their cars there overnight.
Why is it always about the Eagle?
The abismal Eagle schedule has got to be a significant reason for not taking the train in Texas: 10:05 hours southbound from Dallas and 8:20 hours nourthbound from San Antonio - and it's only 314 miles. It's 2:31 hours for 83 miles just from San Antonio to Austin. The route is not all that bad to wind up with a 38mph average speed, and that's the faster northbound train. Get the the schedule down to six hours and maybe the load factor will improve.
A faster train also needs to be convenient for travel. The schedule does not permit a day trip between San Antonio and Dallas. However, the sb train would do better with the 12:20pm departure from Dallas getting people to San Antonio by supper time rather than by the late news. Unfortunately, the nb could be adjusted to arrive in Little Rock, Saint Louis, and Chicago an hour earlier; but unless the Eagle kills two hours in Dallas, Little Rock or St Louis, it would get in too late to afford travelers a useful afternoon.
What if the rail fare was reduced? The Amtrak fare between Chicago and Milwaukee is about $0.37 a mile one way while the monthly pass is just $0.08 a mile. The rushhour train carrying heavily discounted commuters is full and the others are virtually empty.
What's the use of running empty trains? The revenue may not increase, but the service will be relevant to a larger public.
KCSfan wrote: Samantha wrote: Setting fares is a challenge. Amtrak has to consider competing air and bus fares, as well as the cost of driving. Moreover, it has to consider time, convenience, and comfort factors. And it has to consider its cost structure. In a nutshell, if Amtrak raises its fares, it will drive some potential passengers to alternatives, i.e. planes, buses, and personal vehicles. The trick, which is more difficult than most people realize, is to raise the fares without chasing off so many passengers as to result in lower rather than higher revenues. Doing so is a big whoops! I fully agree but think, in the case of the Eagle at least, coach fares could be increased by 15 percent and still be competetive. Forget the business travelers and those for whom time is the major factor. They'd still fly even if Amtrak gave free rides. Amtrak's market is those who don't want to fly or endure the rigors of a long bus ride and those who want to see the scenery. For these persons it pretty much boils down to a choice between train and auto travel. I've driven between Shreveport and Chicago many times and 15 hours is about the time it takes. You could make it in the stated 13-1/2 hours if you had either a catheter or carried a tin can in your car and brown bagged it or ate only at Mickey D's along the way. Even 24 hours on the train spent relaxing, quaffing a drink or two, reading, playing cards, etc. is far more pleasent than that kind of a car trip.Mark
Samantha wrote: Setting fares is a challenge. Amtrak has to consider competing air and bus fares, as well as the cost of driving. Moreover, it has to consider time, convenience, and comfort factors. And it has to consider its cost structure. In a nutshell, if Amtrak raises its fares, it will drive some potential passengers to alternatives, i.e. planes, buses, and personal vehicles. The trick, which is more difficult than most people realize, is to raise the fares without chasing off so many passengers as to result in lower rather than higher revenues. Doing so is a big whoops!
Setting fares is a challenge. Amtrak has to consider competing air and bus fares, as well as the cost of driving. Moreover, it has to consider time, convenience, and comfort factors. And it has to consider its cost structure.
In a nutshell, if Amtrak raises its fares, it will drive some potential passengers to alternatives, i.e. planes, buses, and personal vehicles. The trick, which is more difficult than most people realize, is to raise the fares without chasing off so many passengers as to result in lower rather than higher revenues. Doing so is a big whoops!
I fully agree but think, in the case of the Eagle at least, coach fares could be increased by 15 percent and still be competetive. Forget the business travelers and those for whom time is the major factor. They'd still fly even if Amtrak gave free rides. Amtrak's market is those who don't want to fly or endure the rigors of a long bus ride and those who want to see the scenery. For these persons it pretty much boils down to a choice between train and auto travel. I've driven between Shreveport and Chicago many times and 15 hours is about the time it takes. You could make it in the stated 13-1/2 hours if you had either a catheter or carried a tin can in your car and brown bagged it or ate only at Mickey D's along the way. Even 24 hours on the train spent relaxing, quaffing a drink or two, reading, playing cards, etc. is far more pleasent than that kind of a car trip.
Taking the Eagle from Texas to Chicago is an attractive alternative to the bus or driving. I agree. I take the Eagle two or three times a year to Chicago and beyond.
Whether the Eagle could tolerate a 15 per cent fare increase is problematic. For the first three quarters of FY08, its occupancy rate was right at 50 per cent. The loss per passenger mile increased over the first nine months of FY07. Moreover, although I don't have the numbers for the occupancy rate south of St. Louis, based on my observations, the train carries a hefty load north of St. Louis, but the loads south of St. Louis are relatively light, and they are very light south of Fort Worth, except for the sleepers, in part because of its reputation for being tardy. Thus, a 15 per cent increase in fares might reduce the load factor and, therefore, the revenues even more.
I assume that your fare is for two seniors. I checked to see what it would cost you to travel from Shreveport to Chicago on September 3rd and return to Shreveport on September 10th. I looked at train, airline, and bus fares as well as driving a car similar to my Corolla. These are the factors that Amtrak has to consider in setting its fares.
On Amtrak a coach seat would cost $352, which is close to the fare that you quoted. The trip would take 21 hours and 14 minutes, assuming the Texas Eagle is on time. Don't bet the farm on it. It is infamous for running late. In addition to the coach fare, you probably will have some incremental meal expense in the dinning car, i.e. the difference between what it costs you to eat at home and what it would cost you to eat in the dinning or lounge car. A roomette would cost $737.60, but meals are included in the price of the room.
Several airlines are quoting $399 for two people from Shreveport to Chicago and return. Northwest has four flights a day that offer this fare. Continental has considerably more flights, but it wants $528 or $176 more than the coach train fare. The best flying time is 4 hours and 10 minutes. Excluding students and retirees, time is a consideration for most people. For them the difference between the airfare and train fare ($47) is immaterial. And for business people the $176 is immaterial. Time is very important for most business people.
Greyhound wants $275.10 for two round trip tickets from Shreveport to Chicago. The travel time is 20 hours and 50 minutes or slightly quicker than the Texas Eagle. In addition to the fare, you probably would have some incremental meal expense at the transfer points.
Driving a car similar to my Corolla would cost $473. This is the fully allocated cost, which includes fuel, maintenance, depreciation, insurance, etc. It also includes the number of miles over the life of the vehicle and its estimated residual value. The estimated driving time is 13 hours and 32 minutes according to MapQuest. In addition, you probably would incur some incremental meal expense on the road, depending on where you eat, and you would have the cost of a motel, since you don't want to drive all the way through.
When Amtrak sets its fares it has to take all of these factors into consideration. Its coach fare is more than the bus fare and only slightly less than the best airfare. When meals are factored into the matrix, the total cost of traveling by train could equal the cost of flying. Even the difference between driving and the train is not terribly significant ($121), excluding the motel cost. If you need to rent a car in Chicago, driving, even with the two extra motel nights, could be less than taking the train, depending on how long you rented the car in Chicago.
If Amtrak was a business, it would have to set its prices to cover all of its costs and provide a return to its shareholders. But it is not a business. It sets its fares to respond to the market factors discussed above, with the understanding that its federal and state government partners will cover its loses.
The retro-active wage settlement appears to have been charged to FY08 train operations.
If the settlement consisted solely of a lump sum payment for past wages, it would be a one time labor charge for FY08. If it is a retro-active adjustment of wages, the sum paid from the settlement date to FY08 would be a one off, but future labor costs would reflect the adjustment in the wages. In this case Amtrak's future labor costs, as well as any benefits tied to wages, would increase by the amount of the settlement.
Had Amtrak's costs not risen in line with the increase in riders and revenues, it would have realized improved financial performance. It would have lost less money on train operations. But its operating costs rose in parallel with the increase in revenues. This suggests that Amtrak is challenged to hold its train operating costs in line.
The train operating costs, by the way, are before other charges, e.g. depreciation, interest, infrastructure management, etc. It is these costs that turn some of the positive train operating results negative. For example, NEC revenues cover its train operating expenses and make a contribution to the other charges. Unfortunately, the other charges are so great that the NEC turns an operating profit into a NEC corridor loss.
The price of gasoline has dropped 24 per cent in August. What impact this will have on Amtrak's riders is not clear. It will depend on whether it is signaling a long term decline in the price of gasoline or whether it is a relatively short term price adjustment. If it is a downward trend that is with us for awhile, some of Amtrak's new found riders are likely to head back to their cars. A decrease in riders will result in a decrease in revenues unless Amtrak is able to offset it with a price increase. This is unlikely given the relatively weak economy. To compensate for any decrease in riders and revenues, Amtrak would have to decrease its cost in line with the decrease in revenues. Unfortunately, Amtrak, given the nature of its operations, would have a tough time accomplishing this goal.
A significant portion of Amtrak's costs are fixed, e.g. equipment, infrastructure, labor, management, etc. Normally, labor is a variable cost, but in Amtrak's case, because of labor contracts, it cannot shift its labor costs as quickly as a firm that is not bound by similar contracts. Moreover, due to the nature of its operations, it cannot shift the costs of its product line as quickly as its competitors.
Outside of the NEC, Chicago, and California corridors, Amtrak would be hard pressed to reduce its schedules, since they tend to be thread bare. Reducing the schedule of the Sunset Limited, for example, from three days a week to two days a week would be a challenge. Three days a week is a barebones schedule; reducing it to two days a week would make it even more so. On top of the economic and marketing considerations Amtrak would have to consider the political implications. If it attempted to reduce the schedule of the Sunset to adjust its expenses, it would be beset by an army of angry federal and state politicians representing the interests of the states that it passes through.
At least Amtrak's ridership and revenue increases could absorb most of the cost increases, particularly for fuel and labor.
How does a retro-active wage increase work? Is this a one-time charge in corporate overhead?
Will the absence of the one-time charge next year cushion a possible decrease in ridership when people can less-afford travel or gas prices fall?
I imagine Illinois' train performance is simliar to North Carolina's and will quell some anxiety over State support.
Samantha wrote: For the first eight months of FY 2008 train operating revenues were up approximately 12.5 per cent over 2007. Train operating expenses were up by approximately 12.9 per cent. I rounded the numbers. When calculated without the rounding, the train operating ratio is essentially unchanged, as I pointed out previously. During the period Amtrak's train operations had significantly unfavorable expense variances compared to 2007 for salaries, wages, and overtime payments, offset partially by a reduction in employee benefits. Other unfavorable variances occurred in train operations, including access fees; fuel, propulsion power, and utilities; materials; facility, communication, and office; advertising and sales; casualty and other claims; and other expenses, offset in part by indirect costs capitalized to P&E.Only two of Amtrak's 11 roll-up expense categories had favorable 2008-2007 variances. The largest variances occurred in wages and overtime, which were up nearly 23 per cent; fuel, propulsion power and utilities, which were up approximately 30 per cent; and other expenses, which rose by approximately 16 per cent.
For the first eight months of FY 2008 train operating revenues were up approximately 12.5 per cent over 2007. Train operating expenses were up by approximately 12.9 per cent. I rounded the numbers. When calculated without the rounding, the train operating ratio is essentially unchanged, as I pointed out previously.
During the period Amtrak's train operations had significantly unfavorable expense variances compared to 2007 for salaries, wages, and overtime payments, offset partially by a reduction in employee benefits. Other unfavorable variances occurred in train operations, including access fees; fuel, propulsion power, and utilities; materials; facility, communication, and office; advertising and sales; casualty and other claims; and other expenses, offset in part by indirect costs capitalized to P&E.
Only two of Amtrak's 11 roll-up expense categories had favorable 2008-2007 variances. The largest variances occurred in wages and overtime, which were up nearly 23 per cent; fuel, propulsion power and utilities, which were up approximately 30 per cent; and other expenses, which rose by approximately 16 per cent.
It sounds like some Amtrak fare increases are in order. Consider the following.
Later this month my wife and I will be making a round trip from Shreveport to Chicago on the Texas Eagle (thruway between Shreveport and Longview). With our senior discount the Amtrak fare is $354. While we've driven straight through before, 15 hours behind the wheel is a killer so we now take two days when we drive. Using just 1/2 the the IRS allowance for car usage plus a motel and additional meals enroute, the cost of this trip by car comes to $540. The undiscounted Amtrak fare could be increased 25 percent and still be cheaper than driving. If only one person were traveling, even with the fare hike, the cost of this trip by train would still be about half the cost by car. Of course driving is less costly if more than two persons are making the trip.
Cost isn't the only factor to consider. Allowing for the usual lateness of the Eagle, I figure our trip will take nearly 24 hours each way. Though it's slower, the train will take us only one day each way vs two days by car.
The cost comparisons for other routes will be somewhat different but, based on this example, I feel certain there are opportunities for Amtrak to increase fares and still be competetive with auto travel.
gardendance wrote:That's why proposals have a 'do nothing' scencario. Despite carpooling your gas bill did not decrease, but what would have happened to your gas bill if you hadn't carpooled?
If you have three people drive in one car, as opposed to driving individuallyin three cars, the amount of gasoline burned goes down for that portion of the trip where two of the drivers park their car and join in the car pool.
If the price of the gasoline increases, the reduction in the volume consumed is can be offset partially or completely by a price increase. In addition, depending on the size the the vehicle, the added weight may reduce the miles per gallon. And the driver may see an increase in his maintenance costs and insurance rates because he is hauling people to work, assuming that is where he is going, as opposed to driving solo.
This is what has happened to Amtrak. It is hauling more passengers with a slightly lower fuel burn per train mile and by implication per passenger. But the cost of the fuel has rising dramatically, thereby offseting the reduction in volume. In addition, most of the other costs associated with train operations have risen, some nearly as much as the fuel, thereby negating the gap between revenues and costs that one would have otherwise expected to widen.
At the end of the day one needs to look at all the costs.
Unfavorable expense variance. Gotta try that one on my wife. "Honey, I just got back from the model railroad hobby shop, and our family budget has experienced an unfavorable expense variance."
So Amtrak has experienced an increase in ridership, but any improvement in their finances has been offset by increased fuel cost, a pay increase for employees, and a bunch of other expenses. Not knowing about these other costs, seeing that Amtrak expenses grew in proportion to increased ridership may suggest that Amtrak is not seeing any productivity gains, which is not the case.
Owing to increased load factor, they are getting more fuel efficient and their labor is getting more productive, but this is offset with cost increases for fuel and wages. Kind of like joining a car pool and seeing your gas credit card bill stay the same. You are saving gas, but the price of gas has gone up too.
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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