I guess it is so. Now Acela, etc. are expected to cover the fixed costs of ROW infrastructure. The goalposts have been moved (not a parable, a metaphorical example).
C&NW, CA&E, MILW, CGW and IC fan
henry6 The dealer did not lose money on each car sold....he lowered the price and sold more cars to make up the difference but he sure as hell didn't sell below his costs. That is he took a smaller profit margin per car but his volume of sales made up for it..
The dealer did not lose money on each car sold....he lowered the price and sold more cars to make up the difference but he sure as hell didn't sell below his costs. That is he took a smaller profit margin per car but his volume of sales made up for it..
There is no car dealer who did that. Note that I said "parable." Like in the Bible. Even if your belief is in the literal truth of the Bible, there was no Samaritan man who helped the other man who was beaten and robbed. It is a parable, in other words a story, a story told to illustrate a moral principle, in this case, a man who held religious beliefs contrary to the orthodoxy of the day but was pure of heart in taking pity on a man beaten by robbers and who translated those feelings into concrete action.
On the other hand, in John Kneiling's times, there were railroad companies that were losing money, not only on their passenger service pre-Amtrak but also on their freight operations, and in Kneilings (unhumble) opinion, railroad management did not have working accounting systems in hand to tell where their money was going, and they were engaged in failed marketing efforts that did not staunch the losses. In other words, they lost money on every car sold, but they were hoping to make it up on the volume.
Maybe individual car dealers never did such a thing, but in recent history, the U.S. auto companies were indeed selling every automobile at a loss and hoping to make up the difference in marketing arrangements. Famously, the US auto makers were selling large numbers of cars to rental car companies and other volume purchasers of automobile fleets (Federal and state governments, etc.). These volume sales may have covered the direct cost or avoidable cost or incremental cost of manufacturing those cars, but the auto companies had large fixed costs, especially retiree pensions and health care contributions, that these sales were not covering. By "dumping" large numbers of cars into "those channels", there was a flood of used cars on the market (like Hertz selling its rental cars to consumers) that canabilized the sales of new cars.
The flood of used cars also depressed "resale value" of new cars. Now I know there are a few of us cheapskates who pinch our pennies, buy a new car for cash, and then try to keep it going for 20 years, but by and large the new car buyers buy their cars on a finance arrangement and trade them in, and there is a second tier of car buyers who buy the one-owner used cars, on down the line to people who buy "junkers" because that is what they can afford or they have the mechanical skills to keep them running. The depressed resale value of the American cars increased the finance payment of owning a new car, that in turn made owning a new American car much more expensive than the Japanese and Korean competition, losing sales, which was driving the American automakers into bankruptcy (Ford escaped the need for the Federal bailout by "the skin of their teeth.") (yeah, yeah, a Honda is an "American car" because it is assembled in Ohio whereas a Ford is assembled in Mexico, but you know what I mean).
Now the Federal government bailed out the Eastern freight railroads in the form of Conrail just as the Federal government recently bailed on two of the Big 3 automakers. But the government somehow managed to "spin off" private freight railroad companies in the form of CSX and what was sold off to Norfolk Southern, the government managed to "spin off" Chrysler to Fiat and, they tell me, is divesting itself of GM (a union guy proudly has a bumper sticker in my parking lot at work "Bin Laden is dead and GM is alive"). But the bailout of passenger service in the form of Amtrak subsidy continues for 40 years and the idea of "spinning off" the NEC as a profit-making entity and asking state governments to pony up for the outside-the NEC trains, that idea gets instant and vocal criticism from the passenger train support community.
A car dealer who sells every car at a loss and makes it up on the volume is a parable. A car dealer who sells you a car "below invoice" is also a fable because the invoice is only a "manufacturer's list price" on sale to the dealer, upon which discounts are offered by the automaker. But Amtrak is indeed selling every occupied train seat at a loss and "making it up on the volume", the profit on the Acela not withstanding as the Acela doesn't cover the costs of the NEC "fixed plant."
If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?
RIDEWITHMEHENRY is the name for our almost monthly day of riding trains and transit in either the NYCity or Philadelphia areas including all commuter lines, Amtrak, subways, light rail and trolleys, bus and ferries when warranted. No fees, just let us know you want to join the ride and pay your fares. Ask to be on our email list or find us on FB as RIDEWITHMEHENRY (all caps) to get descriptions of each outing.
Sam1 My argument is simple. Don't offer discounts unless they cover the variable costs up front and ultimately all or most of the fixed costs. Sometimes a business will offer a loss leader if it has other product lines to make up the difference, or the discounts can be used to hook loyal clientele that will subsequently carry the note.
John WR Sam1In FY10 the average federal Amtrak subsidy was $ $15.50 per taxpayer. I wonder how the number of "taxpayers" is being counted here, Sam. IRS defines "taxpayer" as any person or corporation that is subject to a tax administered by IRS. That is, there are not just persons who actually pay taxes but also personw who do not pay taxes and even most persons who do not file returns because they are not required to. Almost all people in the US are subject to taxes. I wonder if all of those people are included. When it comes to people who don't file returns I wonder how we can even know how many there are. For example, how can IRS know how many undocumented workers who are paid off the books there are in the United States.
Sam1In FY10 the average federal Amtrak subsidy was $ $15.50 per taxpayer.
I wonder how the number of "taxpayers" is being counted here, Sam. IRS defines "taxpayer" as any person or corporation that is subject to a tax administered by IRS. That is, there are not just persons who actually pay taxes but also personw who do not pay taxes and even most persons who do not file returns because they are not required to. Almost all people in the US are subject to taxes. I wonder if all of those people are included. When it comes to people who don't file returns I wonder how we can even know how many there are. For example, how can IRS know how many undocumented workers who are paid off the books there are in the United States.
I should have been more precise. I should have said per federal personal income tax payer. In its statistics the IRS differentiates between tax filers and persons with a tax liability, i.e. obligated to pay federal income tax.
If one includes everyone who files a return, as well as other sources of federal tax income, which would be difficult to identify, the amount per tax filer would be less, since in 2010 40 per cent of those filing a tax return did not pay federal income taxes.
The point is on a taxpayer, filer, etc. basis, Amtrak's loss (subsidy) is small and probably does not register with most people. They don't feel it and, therefore, don't react to it. But Amtrak's subsidy, along with all the other small stuff adds up.
Each year the CBO puts out a report on steps that could be taken to reduce the federal deficit. It consists of reducing or eliminating out flows and/or enhancing revenues. I downloaded the data in 2011into an Excel spreadsheet and went through it line by line.
I isolated every item that was less than $10 billion, which at the time was a small portion of the estimated annual federal deficit of $1.25 trillion. I then divided this number by the number of federal income tax payers, not filers, for 2009, since the IRS numbers are two years behind in their release. The estimated number in payers in 2011 was reasonably close to the confirmed number of filers in 2009, so I decided to stick with the 2009 numbers.
The federal cash transfer to Amtrak in 2011 was $3.8 billion, which consisted of the normal operating and capital subsidy, plus the ARRA appropriations. It worked out to $45 per federal income tax payer. Spread across all filers, as well as other persons, the amount would have been less, but even the IRS does not try to calculate that number. Not much of a burden irrespective of how one spreads it.
Here some other numbers: Post Office $109.90, Highway Trust Fund Transfer $28.08, Delay FAA's Net Gen $7.28, reduce the subsidized crop insurance premium $4.88, eliminate the Essential Air Service Program $2.16, eliminate cotton see storage subsidy $.01.
As is the case with the Amtrak subsidy, none of these payments, on a per capita or taxpayer basis are large. And every proponent of these subsidies, including Amtrak's supporters, argue that the are in the nation's interest. They are off the radar. But they added up to $721 or 14.9 per cent of the average tax paid by a median income family.
The real biggies are Social Security, Medicare, Medicaid, and defense. But if no one is willing to give on his or her federal perk, how does the nation ever solve its fiscal problems? One way to reduce the Amtrak subsidy would be to drop the long distance trains, which are used by less than one per cent of intercity travelers. Needless to say, this issue is a hot potato. As Texans like to say when their perks are being threatened, now you gone to meddling boy.
Sam1It is better to fill an empty seat if you can recover the variable cost of that seat and contribute something to the fixed costs.
Yes, the very, very short term variable cost, which is incremental fuel and seat fabric wear. On a bus or a train, the incremental cost for filling an otherwise empty seat is pretty much the cost to book the ticket! An extra 200# of weight toward rolling resistance fuel (aero drag change is zero) is nearly zero.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
schlimm Sam1My argument is simple. Don't offer discounts unless they cover the variable costs up front and ultimately all or most of the fixed costs. In re the above, take a look sometime at Ken's (greyhound) reasoning on offering differential rates on the same route and distance on freight lines. The airlines do the same. Ditto with Megabus. It is better to fill a seat or car at a bargain fare then to let it sit empty. Some customers might object, but it is a sane practice in a deregulated market.
Sam1My argument is simple. Don't offer discounts unless they cover the variable costs up front and ultimately all or most of the fixed costs.
In re the above, take a look sometime at Ken's (greyhound) reasoning on offering differential rates on the same route and distance on freight lines. The airlines do the same. Ditto with Megabus. It is better to fill a seat or car at a bargain fare then to let it sit empty. Some customers might object, but it is a sane practice in a deregulated market.
It is better to fill an empty seat if you can recover the variable cost of that seat and contribute something to the fixed costs. We don't know whether Amtrak's pricing models do that because we don't have access to them.
We use discounts and incentive pricing in the competitive electric utility market in Texas. But we cover the variable costs. They can change depending on time of day. We try to get something for the fixed costs, but don't always do so, at least in the short run, for a variety of complex reasons.
Southwest Airlines and Greyhound are based in Dallas. We worked closely with them to develop some of our costing models. They were way ahead of us in understanding and pricing in competitive markets. I don't remember them ever saying that they did not attempt to recover their variable costs. The run empty seats rather than give them away.
Sometimes it is better to fill the seat even if you cannot contribute anything to the fixed costs, providing you are knowingly selling it as a lost leader, and anticipate recovering it over time. But if one loses money filling an empty seat, it is an ineffective marketing and pricing strategy.
Amtrak has lost money every year since its inception. The NEC, assuming that it wears 80 per cent of the depreciation, which may be understated, loses as much per passenger mile as the long distance trains after allocations of its fixed costs. A real business has to recover all of its costs. Not just the operating costs. Given Amtrak's dismal financial record, I would like to see the books before concluding that its Acela service is a good go and discounts contribute positively to its outcomes.
Sam1: From your elaboration it then seems that you side with the people who would prefer to see no government funding of Amtrak and hence Amtrak ceasing to exist. Unless a private knight in shining armor steps in and magically starts running passenger trains for profit.
Personally, I have nothing against $15.50 of my federal taxes going to fund Amtrak. There are many wasteful things funded by government at all levels, but passenger rail as such is not one of them.
I am all for running things efficiently and I am sure there are many places where Amtrak could do better in that area. At the same time, being fed hand-to-mouth as a beggar by annual budget appropriations that may or may not be there next year, makes it very hard to plan long term. I have personal experience of that, at one time working for state and federal government and trying to manage a media production facility that required consistent investment and long term planning, but what we got was a random amount every year, usually in no relation to actual need. Yet we managed to keep moving forward.
Running passenger service as a comprehensive network in a privately funded and managed model that generates profit is either utterly rare or non-existent in this world. Most passenger rail is either government run or funded by government money paying private operators in a bid or franchise system. There are a few passenger rail services that purport to run regular service on a totally for-profit, self-funded basis, but they are typically limited to running between isolated city pairs and only on days and times when they can be profitable. That doesn't constitute a network that will seriously attract travelers.
All that to say that I don't believe that re--privatizing passenger rail in the US will go anywhere. There just won't be any takers.
Finally, that $1.2-1.3 billion a year you refer to as Amtrak's loss, I assume is the federal budget appropriation. I consider that an investment. Just as we invest in education, defense, health care or other services that make our society what it is.
CJtrainguy Sam1 As of the end of Fy12 Amtrak had accumulated losses of $29.3 billion. If the numbers are restated inn 2012 dollars, the accumulated losses would be north of $40 billion. Amtrak should not be offering discounts or services that acerbate these losses. One wonders then what level of annual losses would be acceptable for Amtrak? Or would it be your contention that if Amtrak can't be run at a profit, considering all possible and sundry expenses that can be charged to it, it should not be run at all?
Sam1 As of the end of Fy12 Amtrak had accumulated losses of $29.3 billion. If the numbers are restated inn 2012 dollars, the accumulated losses would be north of $40 billion. Amtrak should not be offering discounts or services that acerbate these losses.
As of the end of Fy12 Amtrak had accumulated losses of $29.3 billion. If the numbers are restated inn 2012 dollars, the accumulated losses would be north of $40 billion. Amtrak should not be offering discounts or services that acerbate these losses.
One wonders then what level of annual losses would be acceptable for Amtrak?
Or would it be your contention that if Amtrak can't be run at a profit, considering all possible and sundry expenses that can be charged to it, it should not be run at all?
Over the past four years Amtrak has lost approximately $1.2 to $1.3 billion per year. Outside of a few budget hawks, most people, by their silence, appear to find this acceptable.
Most Americans don't use Amtrak. In FY11 only .13 per cent of intercity passenger miles was by train, as per Table I-40, National Transportation Statistics. For those who use Amtrak, most of the people that I have encountered don't understand how it is funded.
In FY10 the average federal Amtrak subsidy was $ $15.50 per taxpayer. The average tax bill for a median income family was $4,828 as per IRS Table 1.1. Needless to say, that did not register for most taxpayers and, therefore, did not raise any concern about Amtrak's federal subsidy.
Amtrak requires approximately $1 dollar of federal and state subsidy for every $2 of revenue. Could privatizing Amtrak generate a better result? That is a key question. Covering all of the variables associated with this issue is beyond the scope of this thread. Or maybe even these forums.
The long distance trains cannot generate enough revenue to cover their costs. Depending on how much additional capital is plowed into the NEC and how quickly it is amortized, it could cover all of its costs in time. Interestingly, as I plan to show later this year, after the FY13 numbers have come in, many of the State Supported and Other Short Corridor Trains could cover all of their expenses with some tweaking of their pricing and better cost control.
Sam1...don't play Amtrak or any business for being stupid about what they have to do to stay in business when making contracts and rate. Of course they know they have to get enough to cover costs and add something to the kitty...Stop making them out to be idiots because they aren't!
henry6 Sam1 No...discounts are offered upfront when it is a known factor, i.e., a guarantee minimum amount of money to be spent or milage or whatever the criteria....it is money in the bank, it can be used as Irrespective of when they offered, for whatever period of time, if a business offers discounts that don't cover the variable costs and the fixed costs or at least make a contribution to the fixed costs, it ultimately goes out of business. It is a relatively simple accounting problem. Of course we are talking business professionals and not amature model railroaders. If a discount is offered or negotiated it will be with a profit for the railroad; no business would sell its product for breakeeven or less! It is a relatively simple rule of business. No body at Amtrak is an amature nor a non business person. If they did as you suggest, Sam 1, they'd be out of a job and the company out of business.
Sam1 No...discounts are offered upfront when it is a known factor, i.e., a guarantee minimum amount of money to be spent or milage or whatever the criteria....it is money in the bank, it can be used as Irrespective of when they offered, for whatever period of time, if a business offers discounts that don't cover the variable costs and the fixed costs or at least make a contribution to the fixed costs, it ultimately goes out of business. It is a relatively simple accounting problem.
No...discounts are offered upfront when it is a known factor, i.e., a guarantee minimum amount of money to be spent or milage or whatever the criteria....it is money in the bank, it can be used as Irrespective of when they offered, for whatever period of time, if a business offers discounts that don't cover the variable costs and the fixed costs or at least make a contribution to the fixed costs, it ultimately goes out of business. It is a relatively simple accounting problem.
Of course we are talking business professionals and not amature model railroaders. If a discount is offered or negotiated it will be with a profit for the railroad; no business would sell its product for breakeeven or less! It is a relatively simple rule of business. No body at Amtrak is an amature nor a non business person. If they did as you suggest, Sam 1, they'd be out of a job and the company out of business.
You have quoted yourself and mixed my comments in with your comments.
My argument is simple. Don't offer discounts unless they cover the variable costs up front and ultimately all or most of the fixed costs. Sometimes a business will offer a loss leader if it has other product lines to make up the difference, or the discounts can be used to hook loyal clientele that will subsequently carry the note. This is especially true for many start-up businesses. This is what I said or at least mean from the get go.
As noted the key point with respect to Amtrak's premium services (Acela, business class, sleepers, etc.) is whether the pricing covers the incremental costs. Without access to Amtrak's books, it is impossible to know. It may be worth remembering, however, that in its 2005 report the IG found, amongst other things, that the subsidy for Amtrak's sleeping car passengers was greater than the subsidy for its coach passenger. Raises the question of what has changed?
One basis for a quantity discount is that the "seat" is just a bench in a glorified boxcar, but the expensive part is selling the ticket and then having the conductor "pull" the ticket.
That is the basis for the term "commuter." You don't commute by automobile -- that is a change in the original meaning of the term. If you were a regular traveller between Point A and Point B to go between home and downtown job (back in the day, this was probably executives who lived on exurban estates and rode daily to downtown jobs at corporate headquarters), the railroad company "commuted your fare", that is, gave you a volume discount.
For example, on the old C&NW, when I worked a summer job on Madison Street near Northwestern Station, I bought a monthly pass at a discounted rate of the individual fares. I bothered the station agent only once a month to purchase this pass, and the conductor just glanced at it coming down the aisle.
During the school year, I "commuted" to Northwestern University (no relation to the Northwestern Railroad), getting on and off at Davis Street, Evanston, which was a good 20 minute brisk walk in whatever kind of weather. Since I was not going all the way to Northwestern Station, no commuted (or commuter) fare was offered.
Actually, the whole thing was kind of stupid. C&NW gave a discount to customers who travelled during the rush hour and got off at Downtown. As a student, I was often travelling off-peak, and by getting off at Davis Street, I freed a seat at Davis Street for a Downtown commuter. I was off-peak both in time of travel and travel segment (the seats fill up as you approach the Downtown terminus whereas the train is mainly empty at its remote North Line terminus), but I got no discount.
Think about it -- the "commuter train problem" is that you have the morning and evening rush hour, which is hard to bridge with a single crew shift, and you get bad utilization of equipment for two reasons -- the rush hour concentration of demand along with (most) commuters boarding at different places along the line and all getting off at Northwestern Station. This is what makes commuter operations such money-losers, and you are giving the "volume discount" to the very travel pattern that is operationally vexing.
And that we have participants around here arguing that passengers "ought to get" volume travel discounts "just because" and criticizing those who say otherwise just goes to show you how we are coming up short in a reasoned, data-driven approach to passenger train advocacy.
Sam1 Irrespective of when they offered, for whatever period of time, if a business offers discounts that don't cover the variable costs and the fixed costs or at least make a contribution to the fixed costs, it ultimately goes out of business. It is a relatively simple accounting problem.
Irrespective of when they offered, for whatever period of time, if a business offers discounts that don't cover the variable costs and the fixed costs or at least make a contribution to the fixed costs, it ultimately goes out of business. It is a relatively simple accounting problem.
One would think so. But there are plenty of examples of selling loss-leaders, on the premise that the customer who buys the item sold below cost (such as a Kindle), will buy other products from the same seller and so overall generate positive income for the company.
That said, I remain confused about what you really want to happen to/with Amtrak. Much of what you state seems focused on them not covering costs. So then they should charge more. But then you are questioning their premium products as well, even though the price point is higher there, with more positive return for the company. I want to see a functioning passenger rail network in the US that is a viable alternative to other modes of transportation. I am willing to pay for that, from taxes and from tickets. In a perfect world, maybe it's possible to run passenger rail for profit, but I'm not sure. And we don't live in a perfect world. I do believe it is in the interest of federal, state and local governments to ensure that people have multiple options for travel as travel furthers commerce and generates income for the community at large.
I am also aware that in its current highly politicized form, Amtrak, is not able to be all it can be or should be. I think they are missing in some areas, but they are doing a great job in some other areas. And without Amtrak, there would be no passenger rail in the US today, aside from some rapid transit.
henry6 No...discounts are offered upfront when it is a known factor, i.e., a guarantee minimum amount of money to be spent or milage or whatever the criteria....it is money in the bank, it can be used as collateral, bookkeeping and transaction costs are minimized, etc. Buy a doughnut, buy a half dozens, buy a dozen and each price per unit is different. Seat discounts at the last minute to fill seats are different than bulk, long term discounts. If one knows business, selling, etc. then it makes sense...and dollars, too.
No...discounts are offered upfront when it is a known factor, i.e., a guarantee minimum amount of money to be spent or milage or whatever the criteria....it is money in the bank, it can be used as collateral, bookkeeping and transaction costs are minimized, etc. Buy a doughnut, buy a half dozens, buy a dozen and each price per unit is different. Seat discounts at the last minute to fill seats are different than bulk, long term discounts. If one knows business, selling, etc. then it makes sense...and dollars, too.
schlimm PNWRMNM Henry, The freight railroads have no reason to care if ATK makes a profit or not. What they do care about is having their capacity to serve freight customers stolen by ATK LD trains. Mac Stolen? Oh, too low a fee? Perhaps the freight lines would prefer to turn back the clock and be required to run a real passenger service as mandated in their original charters? I doubt it. Perhaps what we should be considering the freight lines selling more of their lightly used lines to the states or Amtrak for routes that would be desirable. It would reduce the freight lines' minimal maintenance expense and property tax burdens.
PNWRMNM Henry, The freight railroads have no reason to care if ATK makes a profit or not. What they do care about is having their capacity to serve freight customers stolen by ATK LD trains. Mac
Henry,
The freight railroads have no reason to care if ATK makes a profit or not.
What they do care about is having their capacity to serve freight customers stolen by ATK LD trains.
Mac
Railroad lines can carry freight, those lines can carry passenger, or they can carry a combination of the two. Railroad lines, however, are a resource with limits to capacity that cost somebody money to provide, whether it is a private railroad company, the government through funding to Amtrak, or some partnership between the two.
A famous NARP talking point is that one track has the "capacity of 20 lanes of highway." I know this because I was a NARP member 40 years ago, and when my high school had an Earth Day exhibition, I set up a table with a section of track with an HO RDC car to illustrate one track, and I set up some cardboard to show the relative amount of space of 20 highway lanes taking up that much precious Midwestern farm land. The guy next to me had read Paul Erlich's book and had a poster explaining how exponential human population growth is going to choke us out like that one Star Trek episode on overpopulation.
Now that may be true if you are talking about a double-tracked, closely spaced signalled, subway line of passenger trains carrying standing passengers where the trains have all the same good acceleration and braking ability. For other situations, the capacity is less, and when you are mixing (faster) passenger trains with drag and fast (intermodal) freight trains on a single-track line, the capacity is way less than that.
Forget about the argument back and forth between "stolen capacity" and "mandates (to provide passenger service) in original charters." From a standpoint of social policy and social good, what is the best use of the railroad lines?
Maybe, just maybe, we should encourage the railroads to run the maximum amount of freight on their lines and not gum up their traffic flow with (some) Amtrak trains? Maybe if we optimize some railroad lines for freight, we can get more trucks off the highway (no offense to our OTR Forum members -- there will always be work for truckers) and reduce the accident rates and congestion on highways for the benefit of autos (not saying accidents are all the trucks fault, but fewer trucks on the road may make for safer driving giving the skill levels of the average auto driver)?
So maybe Mac is trying to tell us that in running freight, the freight railroads may contribute to bettering passenger transportation and all transportation overall, and we shouldn't have a narrow focus on fighting the freight railroads over running passenger trains over their heavily used main lines?
So the railroads should be "selling more of their lightly used lines to the states or Amtrak"? Well, that is what the Midwest Regional Rail Initiative was all about. That is what the cancelled 800 million in Stimulus money for the Milwaukee-Madison passenger line was all about. That is what the NEC is all about -- lightly used by freight and turned over to Amtrak to operate (and upgrade and maintain). That is largely what the Vision Report of creating a national network of 110 MPH corridors (and the CA HSR) is all about.
The thing is that this becomes expensive, and it becomes hard to get that 20 high lanes worth of passenger traffic. The Japan New Tokaido Line is not only the pioneering HSR, it carries an insane frequency of trains that may be difficult to reproduce elsewhere, that is, until Paul Erlich's projections come to be in the next couple hundred years.
Yes, (Interstate) highways are also expensive, and yes, rural interstates are lightly used (by cars, maybe not so light usage with respect to trucks). And in the end, trains have an intangible, unquantifiable societal goodness that the "beancounters" are missing, although that point of view is a hard sell outside the small community of train enthusiasts, it is even a hard sell to the non-train enthusiast environmentalist and pro-government action advocacy communities. The high school student who was scolding people for having too many babies and maybe even his parents for having him born didn't have much to say about my exhibit with the HO train track, the model RDC car, and the cardboard expanse of highway lanes. Maybe he though the train was a Band-aid to deal with an overcrowded world and his focus was on having less people so there would be more room to drive his car?
My point is that freight railroad management fears that if passenger trains ever make a profit, especially via Amtrak, then they will be forced into looking at and running passenger trains which they fear is the worst thing that can happen....either because a scheduled passenger train interferes with their freight trains, or because it brings people onto railroad property which can be a liability should something happen, or because their attorneys have scared them silly
Perhaps more Acelas and regionals in the peak time periods? Acelas are on the hour from NYP to DC, with a regional 10 minutes later. Why not on the half hour as well, from 7 to 9:30? If they can manage 10 minute headway, even more frequent during peak demand times.
The past post about Amtrak wanting more seats on Acela is very tellling. The decision to acquire more units seems a wise decision to instead go to the next level of equipment. That does pospone additional seats by Acela-2s for 2 - 3 years.
As others have posted here some schedule times for Acelas are almost always sold out. Those same time frame Regionals Business class appears to be sold out many times. So business class & first class Acelas at certain times seem to need more seats. Those riders IMHO are very time sensative so probably charter a limo, fly, or drive.if no Acela reservation available. That is lost old & new business. After a few times trying to get a seat at those same times they may give up on Amtrak.
The reduction of schedule times both for Acelas ( less than today ) & Regional trains to current Acela times may attract many passengers mainly to Regionals ? Once enough ACS-64s are in proven service maybe Amtrak can use them + double headed AEM-7s to add another 1 or 2 Business class cars to Regionals?
henry6 It cannot make a profit because, I don't think railroads want it to in fear they'd have to run passenger trains thus Congress will keep it that way.
It cannot make a profit because, I don't think railroads want it to in fear they'd have to run passenger trains thus Congress will keep it that way.
This is a round robin, merry-go-round argument based on one' s political bent and proclivity to highways and oil lobbyists. Basically, Amtrak, as legislated, cannot do anything. It cannot make a profit because Congress is not a railroad organization and its members are not railroaders; it is another government agency designed to keep people occupied in a never ending bureaucratic mess. It cannot make a profit because, I don't think railroads want it to in fear they'd have to run passenger trains thus Congress will keep it that way.
henry6 Virtually any and all businesses offer discounts for bulk buying, so why shouldn't Amtrak? You have to understand business, advertising, marketing, etc. to run any business, passenger trains included.
Virtually any and all businesses offer discounts for bulk buying, so why shouldn't Amtrak? You have to understand business, advertising, marketing, etc. to run any business, passenger trains included.
If discounts fill otherwise empty seats, cover the variable costs, and contribute to the fixed costs, offering discounts is an effective business strategy. If these conditions are not met, discounts are a bad idea. Without access to Amtrak's books, we don't know whether the discounts are an effective business strategy.
If a competitive business offers discounts and the aforementioned criteria are not met, the shareholders take it on the chin. Amtrak, however, is not a viable business. If its discounts fail to meet the aforementioned criteria, the taxpayers wear the consequences.
henry6 It is not only a brilliant idea but one used in all business for favored, frequent, and bulk customers. The railroad gains because they get a guaranteed rate, a minimum volume, and cut down on account service time. Now, the can plan on train and equipment usage, crew needs, and count on a certain amount of revenue in advance so they know what the need to fill the train up... Acela, Regional, whatever, it is smart business and does not take away from the bottom line but adds to it.
It is not only a brilliant idea but one used in all business for favored, frequent, and bulk customers. The railroad gains because they get a guaranteed rate, a minimum volume, and cut down on account service time. Now, the can plan on train and equipment usage, crew needs, and count on a certain amount of revenue in advance so they know what the need to fill the train up... Acela, Regional, whatever, it is smart business and does not take away from the bottom line but adds to it.
Consider the way the airlines price business travel. They may wine and dine a corporate travel department, but a decision to travel made at the last minute or a need to change plans leave the business traveler paying the maximum for that flight. An additional problem for the carrier is that payment for the business flight may be as far away as 60 days if it is charged to a corporate account, while the individual traveler pays through a credit card that is processed before the flight occurs, sometimes by weeks.
Is the business traveler discount offered by Amtrak on Acela adding passengers who would otherwise drive, fly or Megabus? I have my doubts.
Amtrak was recently struggling with the decision to add Acela cars to the existing trains or ordering additional trainsets. That suggests they are capacity constrained or anticipate being so. Perhaps the corporate travel departments should be wining and dining the Amtrak reservation personnel.
Sam1The cost of expanding the highways and airways, in my opinion, is irrelevant to whether Amtrak, which is one of two commercial transport modes that gets a direct cash subsidy from the taxpayers, should be offering a premium service that many if not most taxpayers cannot afford.
Why is it irrelevant when you are ignoring or minimizing the fact that Acela more than covers its operating expenses and you now seem to be bringing up the federally paid for ROW and upgrade in the NEC? Let's compare apples and apples.
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