Since there is talk of reducing or eliminating the Heartland Flyer, maybe it's time to seriously consider expanding service to Wichita and Kansas City. This could help if Oklahoma cannot afford as the costs that amtrak doesn't want to pay.
zkr123 Since there is talk of reducing or eliminating the Heartland Flyer, maybe it's time to seriously consider expanding service to Wichita and Kansas City. This could help if Oklahoma cannot afford as the costs that amtrak doesn't want to pay.
Editor Emeritus, This Week at Amtrak
The Heartland Flyer is a loser. In FY14 it lost $1.9 million before depreciation and interest. The loss was down from $3.6 million in FY13, thanks in large part to higher fares and lower OPEBS.
If only ticket revenues are considered, the loss on the Heartland Flyer in FY14 was $7.2 million. The difference in the loss is due to the support payments made by Oklahoma and Texas.
The number of passengers on the Flyer has been declining. Passengers carried in FY14 were 77,861, which was down from a high of 87,873 in FY12. The average load factor in FY14 was 42 per cent, down from 45.6 per cent in FY12.
The average speed for the Fly is 50 mph. It is another 350 miles from Oklahoma City to Kansas City. If the train stayed on the same schedule, so that it could still connect with the Texas Eagle, it would arrive in Kansas City in the wee hours of the morning. Not a good idea.
The best outcome for the Heartland Flyer is to junk it. It is another example of throwing good money after bad.
Google maps says 3:07 for Dallas to Oklahoma City versus 3:57 for the Flyer. Add in the first mile - last mile time plus origin station cushion and it's easy to see the train really isn't competitive (same problem as Hoosier State - just too slow)
Add to this that the train is too slow to get more than one turn out of the equipment each day. Imagine if the running time was 2:30. You could get two turns out of the crew and equipment - at nearly the same operating cost.
This train appears to be a classic example of the "lines on the map" approach to passenger rail service expansion normally championed by NARP.
How to fix it? Service needs to be fast and frequent to be useful. Fast gets you two things. More equipment turns (low equipment cost) and more valuable service (look at how much people in the NEC pay for fast trains). A 2:30 running time would get you car-competitive door to door times. Frequent lets you penetrate a market. (Acela woudn't work if they ran 2, 60 car Acelas a day versus 20 6 car trains, for example)
Could the Flyer be fast and frequent? Probably not with spending lots of cash! To get to 2:30 running time, you'd need 110 mph track speed. That would take quite an investment! Is the market big enough to support fast, frequent rail service? Probably not. It would probably have to be expanded to include more population centers. Probably need lots of cash for this, too.
It's not likley anybody will find the $$ floating around to make any improvments, so status-quo Flyer vs no Flyer is the only real choice available.
An avg of 120 people a day, each way has nearly zero impact on congestion or air quality. It also has a nearly zero impact on ecomonic development. So, it's really hard to make a cost - benefit based case for this train.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
I don't support the train myself as I think not that many folks go to OKC from Fort Worth and those that do are not spending a lot of money in either city so economic impact is probably not very large. I always wondered why and how they got Texas to approve the train as well as the equipment. I would rather see a train from Dallas to connect with the Southern Crescent or from Dallas to Denver (seasonally) - "Caprock Xpress" variant proposed 13 years ago. No idea how this train got funding.
Yes, if a train is on a longer route (up to about 1000 miles or more with through car arrangements) it has the chance to make more money per trainmile as the passenger miles per trainmile increase, aganist relatively fixed costs, when the Origin-Destination pairs (revenue) overlaps. You only know this if you consider marginal costs, which Amtrak seems disinclined toward from President Downs on till this day. I am somewhat curious what the original poster's experience consists of and why there are so many questions.
As this is being written several Interstates and Highways in North Dallas are showing red traffic speeds in Google Maps, indicating major backups. At some level it is not about easing roadway congestion, but providing an escape route from such.
BTW true intercity travel over 100 miles is a minority of Vehicle Miles on most of the Interstates, so logically you can never ease roadway congestion or expand capacity during full times with only an intercity service, there has to be a combined commuter type service. Did one of the earlier posters check the State monies that are now counted as revenue?
The train could easily be extended to Tulsa in conjunction with recent proposals without being an overnight run and with little infrastructure costs. Or alternately could be easily extended on the south end to Dallas and then with a bit more effort to Houston, forming a cross feeder to the Texas Eagle. Gads, you might even have some through cars off the extension from Houston onto the Texas Eagle toward St. Louis, allowing it perform better.
The key issue is we have painted ourselves into an understanding that only "high speed rail" is acceptable or it is a loser; when 90 MPH operations with long sidings, quick station stops, arrayed on a grid network, with comfortable interiors would do just fine and provide a backdrop for a few select Very high speed corridors.
As noted in another discussion, Amtrak counts state support payments as revenue, as per Pg. C-1 in the September 2014 Monthly Operating Report. Also noted above, the loss was $1.9 million in FY14, based on revenues of $7.3 million and expenses of $9.1 million plus OPEBS of $.1 million. Depreciation and interest were not allocated to these trains.
Ticket revenue for the Heartland Flyer in FY14 were approximately $2 million ($1,965,692). Excluding the state and federal subsidies, the loss on ticket revenues only was approximately $7.2 million before depreciation and interest.
The average subsidy (state and federal) in FY14 for a Heartland Flyer rider was approximately $92.
Amtrak is shifting or has shifted a substantial portion of the expenses for the Heartland Flyer to Oklahoma and Texas. And this is what the fuss is all about. Texas was willing to pony up a relatively small amount of money for the Fort Worth to Oklahoma City choo-choo when the feds were picking up the lion's share of the required support payments. But no longer.
Texas is faced with some compelling transportation funding challenges. The legislators in Austin don't want to raise motorist's user fees (taxes). So they have resorted to transfering funds from other sources.
There appears to be little sentiment in the legislature to provide additional taxpayer funding passenger rail in Texas.
V.PayneYes, if a train is on a longer route (up to about 1000 miles or more with through car arrangements) it has the chance to make more money per trainmile as the passenger miles per trainmile increase, aganist relatively fixed costs, when the Origin-Destination pairs (revenue) overlaps. You only know this if you consider marginal costs, which Amtrak seems disinclined toward from President Downs on till this day. I am somewhat curious what the original poster's experience consists of and why there are so many questions.
V. Payne,
Your opening sentance is gibberish. You are claiming that the number of passengers per train mile increases as distance between the origin-desination endpoints increases, and imply that this is somehow due to length of the run. Please supply some data to support this hypotheses which I have never before seen proposed, nor any evidence to support.
The claim that revenue per train mile increases with train run length, holding passenger mile density constant, is inconsistent with the general pattern that rates and fares per mile are higher for short hauls than for longer hauls. This has been a feature of rail freight rates since the begining. I suspect, but have not done the research to prove, that ATK per mile fares are higher for short hauls than for long hauls.
Mac McCulloch
PNWMNM,
I believe you are correct that the further one rides on Amtrak, the lower the fare per mile.
I took a look at the coach value fares on the Sunset Limited from San Antonio (SA) to El Paso, Tucson, and Maricopa. The fare per mile from SA to El Paso is 13.7 cents; to Tucson it is 12.1 cents, and to Maricopa it is 11.9 cents.
Of course, to get a complete picture of Amtrak's pricing dynamics, one would need to have access to the company's pricing model. Not likely for a bunch of rail buffs.
Not too complex I hope, "when the Origin-Destination pairs (revenue) overlap..." means for example that riders traveling between a 200 mile Origin-Destination pair and a 400 mile Origin-Destination pair can overlap on a 400 mile route so that you have two groups of riders on the same train, inreasing revenue density per trainmile. You have to have at least a 400 mile route in this example for the overlap to occur. If you have passengers transfer between two 200 mile routes, you lose 30-40% of the possible traffic and run slower overall due to time spent in the connecting station unless you spent more for infrastructure, but then why not just do that and run through with better results?
Anyway, this was proven conclusively in a analysis of actual Origin-Destination ticket data from the Lake Shore Limited where they asked the question what if you took out the middle segement. A transfer would look similar, but with 60% of total passengers. The top level page from the Midwest High-Speed Rail Associaton directs you to the graph on Page 2 of this Analysis from which an illustration is reproduced below or similar work found at Multipurpose Mobility:
One finds that there is room for both HSR advocacy and expanding on what we have when the market mechanics are understood.
Remember the average coach trip distance is more than 500 miles on the National Network trains and that represents the market demand. This is also the same reason the TGV's run off the new routes and continue onto the classic lines.
This "revenue overlap" is a consultant trying to justify his fee by making the simple complex.
Here is the simple version. On any train with one or more intermediate stops you have two types of travelers "through" and "shorts". Through are going from the begining to the end of the line, while shorts are getting off or on somewhere short of the destination. With shorts the operator has the opportunity to sell the same seat two, or three, or four times.
The problem is you can not put two people in the seat at the same time. You can not have more passengers than seats in any given segment. There is no magical increase in revenue density due to the existance of shorts traffic or a multitude of intermediate stops. What counts is percentage occupancy ratio of seats sold to capacity which could be calculated either overall or per segment, commonly called load factor.
If I have 100 short seats with 100, 0, 100 sold and segments are equal length, my load factor for the trip is 66% even though I sold the same seat twice. If the middle segment is twice as long as the two end segments my load factor is 50%.
I see no evidence that length of the run has anything to do with load factor which is affected by multiple variables, probably specific to each route.
This is a discussion about the Heartland Flyer.
The trends have not been good. Between 2010 and 2014 it has lost more than $15 million before depreciation and interest. And that includes the state support. In actuality the cost to the taxpayers (federal and state) has been considerably more.
Ticket revenues from 2010 to 2014 were $9.8 million. Operating costs before depreciation and interest, which are unknown, excluding OPEBS, were $42.4 million. Thus, the loss that was worn by state and federal tax payers was $32.6 million. These are published numbers.
The ridership has been declining since 2012. Amtrak's 2015 budget projections indicate the ridership will climb to 85,800 in 2015, up from 77,861 in 2014, and then decline to 83,760 in 2016 and 84,140 in 2017. How they came up with these numbers is unknown.
The train has performed poorly since it was implemented. There is nothing in its past or on the horizon that suggests it is likely to change.
If Amtrak were run like a business, which it should be, but it is not, the Heartland Flyer would have been axed years ago.
Sam1 If Amtrak were run like a business, which it should be, but it is not, the Heartland Flyer would have been axed years ago.
You are always challenging other people. What, pray, is your basis for saying Amtrak should be run like a business (as opposed to other of our government programs that are, depending on your politics, more or less useful, but certainly not organized around profit)?
"The problem is you can not put two people in the seat at the same time. You can not have more passengers than seats in any given segment. There is no magical increase in revenue density due to the existance of shorts traffic or a multitude of intermediate stops."
Consists are not constrained to be fixed if the route is expanded. Intercity trains have a declining marginal cost curve, such that revenue can cover the capital and operational cost of an extra car. However, intercity travel demand between single pairs of cities is fairly small. That is why if you want to make trains closer to financially self-sufficient you have to figure out how to attract the maximum potential market to the schedule you are going to run.
The way to do that is to overlap as many possible origin-destination pairs on a schedule, and increase the size of the train. In order to get more origin destination pairs overlapped you have to have a longer route as this gains access to more markets.
So if instead of a 200 mile route in the example, say the Heartland Flyer is run past Ft. Worth to Houston, a bit more than 400 miles. We already know that the average trip length is more than 500 miles on Amtrak's national network, so we are not past the point where air beats both automobiles and trains for the too much of the market. So you could have Oklahoma City to Ft. Worth, Oklahoma City to Houston, and Ft. Worth to Houston traffic, then add in Dallas combinations and far flung suburbs. Roughly speaking the revenue density per trainmile is double, which is what the Midwest HSR graphic was explaining.
Since trains have a declining marginal cost curve this helps the bottom line. This is why the European HSR trainsets have 400 seats or so, and then they can couple together typically to double capacity. This is also experimentally shown in that the VA extensions of NEC corridor trains did quite well when those routes were lengthened as the density of demand increased, though there they kept the seat supply the same.
dakotafred Sam1 If Amtrak were run like a business, which it should be, but it is not, the Heartland Flyer would have been axed years ago. You are always challenging other people. What, pray, is your basis for saying Amtrak should be run like a business (as opposed to other of our government programs that are, depending on your politics, more or less useful, but certainly not organized around profit)?
Amtrak is a commercial enterprise, just like Greyhound, Southwest Airlines, etc. It carries people from one point to another and charges them a fare to do so.
When Amtrak was established, if I remember my reads correctly, the enabling legisation stipulated that Amtrak was expected to turn a profit.
Later, when it was realized that Amtrak was unlikely to be profitable, the legislative language was changed to say, in effect, that Amtrak should be run like a business. That's different than saying it should turn a profit.
Intercity passenger rail should not be treated differently than intercity buses, airlines, cruise ships, etc. They turn a profit or go out of business. Amtrak or intercity passenger rail should be on the same playing field.
One can argue, as many have, that the others don't pay their fair share of the public facilities that they use, but this view has been and continues to be debated.
Even if Amtrak got federal and state subsidies per passenger mile akin to those supposedly benefiting other commerical passenger carriers, it would not be able to compete, although it is getting close on the NEC.
Government(s) should not operate commercial enterprises, with the possible exception of the Federal Deposit Insurance Corporation (FDIC). My reason is not driven by politics; it is based on experience in the business world.
Competitive enterprises do things better, faster, cheaper, with the operative word being better, than monopolies and government agencies. They have to competete effectively, or they go out of business. But a monopoly or government agency - Amtrak - can perpetuate inefficiency and incompetency for a long time. They don't have any direct competition and, therefore, little incentive to adopt best practices.
I take three or four trips a year on Amtrak. I also take six or seven cruises a year. The difference in the attitude of the cruise ship employees vs. the Amtrak employees is startling. I have never encountered a cruise ship employee with a bad attitude. But I have encountered quite a few Amtrak employees who seemingly don't give a damn. Why?
The cruise ship business is very competitive. It cannot afford employees with a bad attitude because cruise ship patrons can switch to a carrier that will treat them right.
Intercity rail passengers in the U.S. are locked into a government monopoly. For the most part they don't have a choice. And many of Amtrak's employees seem to know it. Not all of them, of course, but I have run into too many Amtrak employees that have an indifferent attitude. Part of the reason, I think, is because of the lack of competition.
V.PayneThe way to do that is to overlap as many possible origin-destination pairs on a schedule, and increase the size of the train. In order to get more origin destination pairs overlapped you have to have a longer route as this gains access to more markets. So if instead of a 200 mile route in the example, say Heartland Fyler runs past Ft. Worth to Houston, a bit more than 400 miles. We already know that the average trip length is more than 500 miles on Amtrak's national network, so we are not past the point where air beats both automobiles and trains for the market. So you could have Oklahoma City to Ft. Worth, Oklahoma City to Houston, and Ft. Worth to Houston traffic, then add in Dallas combinations and far flung suburbs. Roughly speaking the revenue density per trainmile is double, which is what the Midwest HSR graphic was explaining.
So if instead of a 200 mile route in the example, say Heartland Fyler runs past Ft. Worth to Houston, a bit more than 400 miles. We already know that the average trip length is more than 500 miles on Amtrak's national network, so we are not past the point where air beats both automobiles and trains for the market. So you could have Oklahoma City to Ft. Worth, Oklahoma City to Houston, and Ft. Worth to Houston traffic, then add in Dallas combinations and far flung suburbs. Roughly speaking the revenue density per trainmile is double, which is what the Midwest HSR graphic was explaining.
Increasing the size of the train is a good idea ONLY IF you have the load factor to support it, regardless of the number of segments. A simple statement of load factor is the ratio of seat miles sold to seat miles available.
Setting aside the fact that short haul per mile prices are a bit higher than through prices, the train operator cares about capacity and load factor. He wants enough capacity to not be turning customers away, but once that point is reached, then more capacity adds only costs, not revenue. That is why load factor is so important. It is an indication of the relationship between capacity and demand. The seller's ideal load factor is 100%. At less than 100% he has empty seats, seats generating costs but not revenue.
This revenue density greater than one is simply a crock. You can not have more than one revenue butt in a seat at any given time or over any given segment, which is the same thing. The fact that using your example we are in four different markets does nothing for revenue density, assuming that this term really means revenue per train mile, because you can have only one person per seat at a time even if you sell three different people the seat for each of three segments.
You have not offered any evidence that having more segments, or serving more markets, has any relationship to load factor or revenue per train mile, except for the fact that short rates are a bit higher per mile than through rates which I pointed out.
Mac
V.Payne Intercity trains have a declining marginal cost curve
Intercity trains have a declining marginal cost curve
What you say about maringal cost curves and fixed costs covered by more units is true.
What I have not seen is a discussion about the pricing that would be necessary to attract riders to fill the capacity and the bottom line impact.
There is little evidence that people in Texas and Oklahoma are ready to give up their cars, planes, etc. to hop on a train. They have not done so to date, and I suspect that it will be years before they cotton up to the idea. Or are forced by circumstances to do so.
At one time Amtrak extended the Texas Eagle from Dallas to Houston. I rode it several times. It turned out to be a bad idea because there was no market for the train.
Whethe there is a market for passenger rail between DFW and Houston is to be learned. Texas Central Railway proposes to run high speed trains between the two cities. I have yet to see an realistic ridership projections and financials for the project. That's because they have not released any.
Adding capacity does not necessarily translate into more riders. The airlines learned this the hard way. Prior to the financial crisis they expanded capacity in a rush for market share. It cost them dearly. Today, as a perusual of any business publication will show, the airlines are doing great, in part because they have scaled back their capacity to fit the market.
Sam1Sam1 wrote the following post 23 minutes ago: V.Payne Intercity trains have a declining marginal cost curve What you say about maringal cost curves and fixed costs covered by more units is true.
Are you sure about the declining marginal cost curve? I really question that. I'm open to correction, but I see the marginal cost curve as a flat, horizontal line. Much like the fixed cost amount.
To me, it seems the marginal cost will be equal to the slope of the total cost curve. i.e. the additional total cost of carrying 101 passengers instead of 100. As long as the train has unsold capacity I don't see the slope of the total cost curve changing as we move from 100 to 101 to 102, etc. passengers.
I reason the marginal cost curve is flat if unsold capacity exists. I'm very open to correction on this, but that's my current reasoning.
As to the average cost, yes it does decline with added passenger volume.
"You have not offered any evidence that having more segments, or serving more markets, has any relationship to load factor or revenue per train mile"
So the Midwest HSR links posted above, which are based on analysis of actual ticket pulls, are discounted for what reason? Is the experimental evidence of the Virginia route extensions of NEC trains being discounted?
Those VA train route extensions overachieved to the point that even Amtrak shows they make money at the route level even on a Total Cost basis. The passengers per train mile increased when the only variable altered was an increased route length, and hence a larger number of overlapping Origin-Destination pairs.
The Virginia extension simply picked up a market that people are willing to ride to/from. It is abount the market(s), not length of the run, or "overlapping Origin-Destination pairs" i.e. "shorts" traffic.
V.Payne As this is being written several Interstates and Highways in North Dallas are showing red traffic speeds in Google Maps, indicating major backups. At some level it is not about easing roadway congestion, but providing an escape route from such.
What a terrific point. Kudos!
When I checked Saturday at 6 PM, the Heartland Flyer was sold out going south from Oklahoma City to Fort Worth on Sunday. It was also sold out on Monday. It was also sold out going north the next Saturday. How many customers are thus told to go elsewhere? According to a study by the OIG in 2004 on the Zephyr and normalized by mileage, Amtrak spent about $350,000 to advertise the Heartland Flyer and thus get more passengers. I also understand that there are extra superliner coaches lying around, but someone else will have to verify. Is there a reason why they can't add an additional coach to carry these passengers?
V.Payne "You have not offered any evidence that having more segments, or serving more markets, has any relationship to load factor or revenue per train mile" So the Midwest HSR links posted above, which are based on analysis of actual ticket pulls
So the Midwest HSR links posted above, which are based on analysis of actual ticket pulls
MHSR, NARP, TXARP, etc. are advocacy groups. They tend to select data that supports their view.
How did MHSR get access to the segment ticket information? Amtrak does not publish it, or if they do, I have not been able to find it. Also, was the data audited by an independent auditor?
dakotafred V.Payne As this is being written several Interstates and Highways in North Dallas are showing red traffic speeds in Google Maps, indicating major backups. At some level it is not about easing roadway congestion, but providing an escape route from such. What a terrific point. Kudos!
V.Payne As this is being written several Interstates and Highways in North Dallas are showing red traffic speeds in Google Maps, indicating major backups. At some level it is not about easing roadway congestion, but providing an escape route from such. What a terrific point. Kudos!
Where were the traffic delays?
There are major highway construction projects in the Dallas area. They tend to cause traffic to slow down and/or stop.
How long were the motorists delayed?
When I get stuck in traffic, I rant to myself, mercifully, that America's motorways are a failed system. But when I look at my watch, it usually turns out that I have been stuck in traffic for less than five minutes.
greyhounds Sam1 Sam1 wrote the following post 23 minutes ago: V.Payne Intercity trains have a declining marginal cost curve What you say about maringal cost curves and fixed costs covered by more units is true. Are you sure about the declining marginal cost curve? I really question that. I'm open to correction, but I see the marginal cost curve as a flat, horizontal line. Much like the fixed cost amount. To me, it seems the marginal cost will be equal to the slope of the total cost curve. i.e. the additional total cost of carrying 101 passengers instead of 100. As long as the train has unsold capacity I don't see the slope of the total cost curve changing as we move from 100 to 101 to 102, etc. passengers. I reason the marginal cost curve is flat if unsold capacity exists. I'm very open to correction on this, but that's my current reasoning. As to the average cost, yes it does decline with added passenger volume.
Sam1 Sam1 wrote the following post 23 minutes ago: V.Payne Intercity trains have a declining marginal cost curve What you say about maringal cost curves and fixed costs covered by more units is true.
Marginal costing usually refers to the incremental cost of adding capacity, units of output, etc.
It could apply to higher use of existing capacity, but it would only apply if the increase in existing capacity drove an incremental cost, i.e. more service personnel, addition fuel use because of an increase in weight, etc.
Marginal pricing can apply to adding capacity or higher use of existing capacity.
Jim200 When I checked Saturday at 6 PM, the Heartland Flyer was sold out going south from Oklahoma City to Fort Worth on Sunday. It was also sold out on Monday. It was also sold out going north the next Saturday.
When I checked Saturday at 6 PM, the Heartland Flyer was sold out going south from Oklahoma City to Fort Worth on Sunday. It was also sold out on Monday. It was also sold out going north the next Saturday.
Based on my observations in Fort Worth, the Heartland Flyer draws a seemingly substantial crowd on Saturdays and Sundays. I have talked to several people who ride the train to Fort Worth for the weekend, i.e. come down on Saturday and return on Sunday.
Checking the load factor for one or two days does not really indicate how well the train is patronized. Between FY10 and FY13 the average load factor for the Heartland Flyer was 44 per cent. And it has been declining since 2012.
One possible solution to control the cost of the Flyer, which is of concern to Oklahoma and Texas taxpayers, would be to reduce the frequency of the train to a Friday through Monday operation.
Sam1Marginal costing usually refers to the incremental cost of adding capacity. It could apply to making greater use of existing capacity, but it would only apply if there was an incremental cost associated with increased use of the capacity, i.e. more service personnel are required, addition weight increased use consumption, etc. Marginal pricing can apply to adding capacity or increasing the use of existing capacity.
I have no disagreement with what you say in this post.
What I'm questioning is the shape of the marginal cost curve, not the definition of marginal cost. The statement was made that marginal costs per additional unit of sale decline with additional volume. (Basically that's what was said.)
I disagree with the idea that the marginal costs decline with additional volume. I maintain that marginal costs are constant, not declining. They are best represented on a graph by a horizontal line (y axis = cost, x axis = volume.) That will hold at least until there is a need to add an extra coach to a train. Then the marginal cost curve will take a step up (a vetical discontinuance in the flat line). The the cost curve will resume its constant, flat line.
I do not, in any way, disagree with your definition of marginal costs. I only disagree regarding the behavior of such costs vis a vis volume.
greyhounds Sam1 Marginal costing usually refers to the incremental cost of adding capacity. It could apply to making greater use of existing capacity, but it would only apply if there was an incremental cost associated with increased use of the capacity, i.e. more service personnel are required, addition weight increased use consumption, etc. Marginal pricing can apply to adding capacity or increasing the use of existing capacity. ... The statement was made that marginal costs per additional unit of sale decline with additional volume. (Basically that's what was said.) I disagree with the idea that the marginal costs decline with additional volume. I maintain that marginal costs are constant...
Sam1 Marginal costing usually refers to the incremental cost of adding capacity. It could apply to making greater use of existing capacity, but it would only apply if there was an incremental cost associated with increased use of the capacity, i.e. more service personnel are required, addition weight increased use consumption, etc. Marginal pricing can apply to adding capacity or increasing the use of existing capacity.
... The statement was made that marginal costs per additional unit of sale decline with additional volume. (Basically that's what was said.)
I disagree with the idea that the marginal costs decline with additional volume. I maintain that marginal costs are constant...
You are correct. The marginal costs associated with the Heartland Flyer would not decline because of greater volume. I don't recall making that statement.
Greater volume, i.e. in crease in the number of passengers, would cause the average cost per passenger to decline assuming all other variables are held constant.
Adding another coach to the Heartland Flyer would be an incremental increase in capacity, and it would involve some incremental expense.
If an increase in existing capacity required addition on-board personnel, i.e. cafe car attendant(s), conductors, etc., this would be an example of an incremental increase in existing capacity, assuming that the definition of capacity is restricted to the number of seats available.
A question was raised about an extra Superliner car that is available for the Heartland Flyer in a previous post. The Flyer normally operates with three coaches. However, there is a fourth coach available, that frequently runs on the weekends, but otherwise it is parked in Fort Worth. Or that had been the case prior to my last visit to Cow Town, which was three months ago.
Sam1You are correct. The marginal costs associated with the Heartland Flyer would not decline because of greater volume. I don't recall making that statement.
Please see your 10:15 PM post of 3/14/2015.
You and I really don't have a disagreement here. But I think it's important to keep the facts straight.
It seems to me that passenger train advocates often try to redefine economic reality to fit their ideology. I like to stick with reality.
Again, you and I don't really have an issue here. I'm just trying to clarify things.
greyhounds Sam1 You are correct. The marginal costs associated with the Heartland Flyer would not decline because of greater volume. I don't recall making that statement. Please see your 10:15 PM post of 3/14/2015. You and I really don't have a disagreement here. But I think it's important to keep the facts straight. It seems to me that passenger train advocates often try to redefine economic reality to fit their ideology. I like to stick with reality. Again, you and I don't really have an issue here. I'm just trying to clarify things.
Sam1 You are correct. The marginal costs associated with the Heartland Flyer would not decline because of greater volume. I don't recall making that statement.
You are correct. It was late, and I did not think it through as carefully as I should have. I even managed to spell marginal wrong.
I don't like curves and graphs. They have seldom clarified anything for me. Put the data in a table or a column, and I can grasp it in a heartbeat.
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