blue streak 1 sam -- link to report ?
sam -- link to report ?
This IG's report has been around for a long time. It can be found at: www.oig.dot.gov/sites/dot/files/pdfdocs/CR-2005-068.pdf. Other sources include the BLS calculators. The calculations are my own.
According to the DOT Inspector General’s Report on Analysis of Cost Savings on Amtrak’s Long-Distance Services dated July 22, 2005, elimination of sleeping cars, dinning cars, and lounge cars would reduce but not eliminate the losses associated with the long distance trains.
The DOT analysis was focused on reducing the losses associated with the long distance trains. It assumed that the 2004 routes would be retained. It did not propose eliminating them altogether.
If the aforementioned services were dropped from the long distance trains, leaving coach only services with minimum on-board food options, i.e. box lunches, carts, etc., Amtrak could save approximately $75 to $158 million annually. It would also save an estimated $79 million per year in planned capital expenditures. These estimates are in 2004 dollars. When adjusted for inflation using the Bureau of Labor Statistics CPI calculator, which is a rough estimate, the amounts would be $89.3 to $188.1 and $94.1 million in 2011 dollars.
In FY11 the long distance trains had an operating loss of $615.4 million before allocation of depreciation, interest, and miscellaneous charges. If the maximum savings were realized, Amtrak would still have had an operating loss of $437.3 million on its long distances trains.
Elimination of the capital spend for new sleepers, dinning cars, and lounge cars would reduce the depreciation charges in future years and, therefore, could result in a further reduction of the operating loss. If the lounge car was retained, the savings as per above would be reduced by $52.4 to $$39.3 million in 2011 dollars.
With numbers like these, even when adjusted for the fact that they are getting a bit long in the tooth, it is difficult to see how Amtrak could break even on any of its long distance services without a significant change in its business model, i.e. drop the sleepers and dinning cars as well as institute other significant cost saving strategies, i.e. elimination of checked baggage, etc. It might be able to get there, but not with the current mind set.
The IG also found that the federal subsidy for sleeping car passengers was approximately 208.9 per cent of the subsidy for coach passengers. When adjusted for inflation, the average sleeping car subsidy in 2011 dollars was $395.62, bringing the average cost of the service to $632.59. To generate a reasonable return on its sleeping car service, which includes meals in the dinning car, a private operator probably would have to raise the room charges significantly or find a way to drastically cut the costs or some combination thereof. I doubt that there is enough demand to support such charges.
Dixie,
I don't know what the union contracts with Amtrak provide. However, ordinarily if the Federal Government eliminates a position there is no obligation to buy out the person holding that position. There are bumping rights; a person whose position is eliminated has a right to other positions which he or she is qualified to do provided the person in that other position has less seniority. And a person who is a Federal Employee and is laid off when a position is abolished has a right to return if a new position opens within his or her qualifications. Finally, Amtrak could arrange with a new private sleeping car operator to give Amtrak employees jobs to the extent that jobs are available and the laid off employees want them.
There are times when the Federal Government has a reduction in force (RIF) and suddenly hundreds of Federal employees lose their jobs.
I have never taken the Cardinal, but I have seen it pulling into Chicago. It had one sleeper. Perhaps someone can comment on the number of sleepers assigned to each train.
When I rode in October a few weeks ago the Cardinal had one Viewliner Sleeper. The crew used 4 rooms as I recall.
If the true cost to operate a sleeping car is $3-$4 per mile then divided by an occupancy of 20-50 is a marketable rate per mile based on 100% occupancy
Politically it seems a winner. Congress has always felt uncomfortable operating a business but has seemed willing to offer coach service as a social need.
I am not sure I would let the government off the hook on the dining service.
As to the investment risk I would have the government guarantee the loans to purchase the sleepers. If Amtrak discontinues Long Distance Service just as there would be a lobor buyout so there would be a settlement for sleepers privately funded.
As currently opperated it seems the sleeping car itself costs a bit more than $3/mile to operate, inclusive of capital. The question is always how to cover the base train operation costs. you need a long train to do so.
Rail and sleeping car fares probably are a function of demand, space availability, and mileage. Sleeping car charges probably are also influenced by time on the train inasmuch as first class passengers have the cost of meals baked into their fares.
I did a comparison of the fares from Chicago to New York for the Lake Shore Limited, Cardinal, and Capitol Limited. Travel is for one person in a roomette on December 8th, which is a Saturday. It was chosen arbitrarily. Fares for other travel dates will vary widely.
The rail fare on all three routes is $97. However, the room charges vary significantly, from a low of $141 on the Capitol Limited to $266 on the Lake Shore Limited and $467 on the Cardinal. In addition, a passenger choosing the Capitol Limited and wanting business class from Washington to New York on a NE Regional would have to pay an extra $41. The total fares would be $279 on the Capitol, $363 on the Lake Shore Limited, and $564 on the Cardinal.
The Capitol is equipped with Superliner cars, which can carry a maximum load of 44 passengers. The other two trains are equipped with Viewliner cars, which can carry a maximum load of 30 passengers. I am not sure how many sleepers are assigned to each train, but when I rode the Capitol Limited several years ago it had two sleepers and a transition sleeper. I also rode the Lake Shore Limited approximately five years ago; it had three sleepers. I have never taken the Cardinal, but I have seen it pulling into Chicago. It had one sleeper. Perhaps someone can comment on the number of sleepers assigned to each train.
If my count of the sleepers is correct, the Capitol can book 88 passengers in the two regular sleepers and 16 overflow passengers in the transition sleeper for a total of 104 first class passengers. The Lake Shore Limited can accommodate approximately 82 first class passengers, depending on the number of rooms that have to be blocked to accommodate the crew. The Cardinal probably can take 24 to 26 first class passengers, again depending on how many rooms have to be blocked for the crew. Moreover, the Cardinal is hobbled by the fact that it only runs three days a week.
If my assumptions of the available space are correct, the fares for the Capitol Limited may be lower in part because of a higher number of rooms and room capacity. If the total cost of the service is essentially the same or at least close, Amtrak can charge a lower fare for the Capitol because of the greater number of spaces and still cover the costs. Of course, the problem with this analysis is Amtrak does not cover the costs; it simply reduces the loss.
Dave,
I think you mean that Amtrak would contract with a third party to provide its sleeping car service (both the cars and the personnel) in the same way that private railroad companies once did. The sleeping car service provider would set the price for the sleeping car accommodation and Amtrak would charge for transportation.
Today it is quite popular for government agencies to contract out certain services. The advantage is generally that the private contractor offers lower salaries and less expensive benefits and can therefore perform the service more cheaply than government does. Also, Amtrak would not have the capital investment in sleeping cars it has now. The disadvantage is that Amtrak would have less control over the quality of the service or the quality of the equipment.
P. S. Most Pullman cars were open sleepers. Amtrak does not use open sleepers although other railroads do including VIA Rail.
I can only offer an intuitive response. If I could raise the capital to set up such a business I would be reluctant to do so. Supposing I invested in sleeping cars and Congress suddenly decided to either cut out long distance routes or all Amtrak trains together. What then do I do with my sleeping cars? Sell them to railroads in other countries? I just don't think Amtrak's future is secure enough to make the investment.
As I say, I am assuming the Chi - NO service will be successful. If it is not, than my proposal does not have merit.
I'm pessimistic about the success of the first-class Chicago-New Orleans service, basing this on the record of American European Express, both when it was five cars attached to the "Capitol Ltd" and later as a separate operation.
That being said, I'm not sure that there is that much of a market for long-haul sleeping car service that charges enough to be profitable with the labor-intensive level of service implied by daveklepper's proposal. As far as dining-car service, that has customarily been viewed as a loss leader even with the relatively steep prices charged so I doubt that contracting out the service would change anything.
Also, existing labor contracts would have to be considered so this proposal may not even get off the ground without contract buyouts.
Although I am probably in a minority for saying this. I think Amtrak undercharges for sleeping car space. The charge also appears to be based on mileage traveled in the sleeper or inventory available. Not the difference in prices between Chicago to DC between the Capital Limited and Cardinal for example......even a year out there is a difference in price so I am not sure it is yield management. My guess is Amtrak came up with a base per mile charge based on their equipment charter rates and that forms the base of the sleeper charge. Just a guess though.
Anyways back to sleeper service. I am pretty confident the Pullman service using private railway cars from the AAPRCO pool will charge a significant premium over Amtrak because those railway car owners have to cover all costs or they lose the ability of the car to travel on the rail system.
Amtrak should upgrade it's vacation packages as well as it's sleeper car fees to cater to a more upscale clientele as well as the average passenger. I mentioned before that private railroads used to do this but I have not seen Amtrak do it. One size fits all for Amtrak passengers, everyone is middle class in this country and are all in the same boat..........thats Amtraks approach. Their charges for business class or the Bedroom vs roomette...........the spread isn't that great. In fact it is just a marginal increase in cost, IMHO.
This post is making the assumption that the new Pullman Chicago - New Orleans service will be successful and will continue.
So, could Amtrak long distance trains be made self supporting with the following:
Amtrak provides only a basic but comfortable, clean, and on-time coach service. I never did ride overnight in a Superliner or Horizon coach, and I don't really know how comfortable it would be. I did have an LA - Chicago trip on the old El Capitan, and enjoyed it. Also, a number of overnight trips in the Juniata-buitl PRR 44-passenger coaches (Trail Blazer, Jeffersonian, Red Arrow, JU\uniata), which were just as comfortable, even though the low-qaulity steel the PRR used in their construction caused preamature rusting, and they were scrapped after about 10-15 yeas of use, with their easy riding trucks used on rebuilt P-70's. Meals would be handled with catering by the best of those that provide airline meals and would be included in the price of the ticket when the travel time exceeds two or three hours and covers meal hours, served at seat. No Amtrak diners or sleepers.
Sleepers and dining cars would be added to Amtrak trains where and when the private operator(s) would find them profitable, and would provide a level of service that Pullman provided. In certain cases the private operator would permit coach passengers to use the dining car, and the meal charges would be high enough so the added meals would be worth serving. Otherwise, again, for the 1st class passenger, meals would be included although the specific fare and meal arrangements would be ujp to the private operator(s). However, Amtrak would contiue to be responsible for the mechanical maintenance and repair of the cars.
I think such a division of responsibility would improve Amtrak's bottom line, possibly to the point where lD trains could break even overall.
Our community is FREE to join. To participate you must either login or register for an account.