Two thousand eight may have been a bad year for the economy, but it was a great year for the United States’ passenger railroads, notwithstanding the horrific crash in Chatsworth, Calif., on Sept. 12 that killed 25 people.
Nearly every U.S. railroad showed big ridership gains in 2008. Those at the bottom of the list below tend to be big-city, big ridership operations already, which means that movement up or down will tend to be muted because the denominator in the calculations is already a large number. Gasoline prices increased rapidly through July, accounting for much of this, of course, but ridership did not decline along with the gasoline price collapse that began in mid-July. This upholds the conventional wisdom that once people try the train, they stick with it.
All forms of public transport saw significant increases this summer in the number of riders. Whether it lasts will depend on a number of variables, i.e. state of the economy, price of gasoline, etc.
I pay close attention to Amtrak and Capital Metro, which is the public transport service in Austin, TX. It, by the way, is scheduled to open its first commuter rail line in March.
For FY 2008 the number of riders on Amtrak increased 11.7 per cent. The peak month appears to have been July when the number of riders reached 2,750,000. In August the number dropped to 2,684,000 and by September it was down to 2,305,000. Amtrak has not released updated monthly figures for the remainder of the year on on its website. It will be interesting to see what happened to the number of riders on Amtrak since the price of gasoline began its steep decline in the fall.<
I think that although gas prices have dropped considerably in recent months, the public is still very uneasy about what’s going on economically and will probably remain so for at least another year. I don’t think they’ll go back to their old ways just yet. Maybe after all the dust settles, but for now a lot of people are exploring the possibilities of rail service and are liking it. Some of course will go back to their cars at some point, but I think many will stick with the rails.
The problem is many want to believe the decline in gas prices signifies a return to normalcy, and that costly plans to expand transit and intercity rail aren’t needed. With declining supplies and growing demand world-wide, this won’t last; and the US will be ill-prepared for the next round.
In the meantime, Amtrak should stop seeking the most revenue per passenger and focus on increasing ridership and maintaining revenue with lower fares. The exception is rush hour pricing for corridor trains.
My question for long distance trains is whether riders, especially transcontinental coach, cannot be attracted at near-capacity levels at higher fares more consistent with short and medium distance corridor services?
Underpricing long distance service explains in part the 2-3x cost/revenue ratio and the drain on Amtrak service Sam rails at.
Could long-distance services survive on intermediate markets at corridor fares?
Is end-to-end travel given away at discount fares (frequent and recurring promotions) more competitive with air simply to fill seats and add some revenue?
If end-to-end travel is so heavily discounted, why is there such concern for short trips preventing sale of space for longer, more deeply discounted trips?
I am sorry that Mr. Richardson of New Mexico has declined a Cabinet post, due to conflicts of interest. The railroad industry, commerce, and reality are losing their inter-connection in our new administration…
To rail is to mock, probably from Old French reillier to growl, mutter; from Vulgar Latin *ragulare to bray; from Late Latin ragere to neigh.
My criticisms of long distance trains have been supported with verifiable financial data taken from Amtrak’s public reports as well as other legitimate sources. They are not railings.
If Amtrak had been permitted to discontinue its long distance trains in FY 2008, it would have had an operating profit of $251.5 million. Assuming 80 per cent of the interest and depreciation is chargeable to the NEC as well as State Supported and Other Short Distance Corridor Trains; it would have had a net operating loss of approximately $224 million before adjustments for reductions in infrastructure management, unallocated system charges, ancillary business revenues, and eliminations. This compares to a system loss of more than $1 billion, excluding adjustments for the aforementioned items.
I just happen to believe that Amtrak, as well as all passenger rail systems that receive federal, state, or local subsidies, should be required to cover their variable operating costs.
Amtrak has had more than 37 years to show that it can make long distance trains viable. It has failed, and it or anyone else will continue to fail because they are not workable in light of discount airlines and efficient automobiles.
The auto nor the airline industry is workable either without massive gov’t subsidies, which have dwarfed what has been given passeger rail service since the end of WWII.
How much operating loss would those discount airlines and efficient automobiles have if they had to pay for the construction of their own airports, air traffic control or interstate highway systems, without gov’t subsidies, not to mention the billions of dollars in bailout money now being funnelled to Detroit?
Just because two industries have recieved massive gov’t support to be successful, when a third has recieved little, doesn’t prove that that third industry is a failure. It just proves it wasn’t supported by the gov’t like the other two have been.
If you water two plants, but not a third plant, guess what? The third plant dies.
I guess we don’t have anything close to a laissez-faire libertarian-capitalist economic system, and everybody gets in line to get their bailout when times get tough.
Passenger trains got their bailout. It happened in 1971, and it was called the NRPC or “Amtrak.” The consequence of this bailout is that passenger trains got a permanent Federal subsidy that lately has been running in excess of a billion dollars. Per year. Year after year after year.
A billion dollars per year, to quote a popular political leader, is “chump change.” But what people seem unwilling to accept in these discussions is that passenger trains are to auto travel in in the ratio 1 to 1000 in passenger miles.
That means that if we bailed out the auto industry in 2009 in the manner that we bailed out passenger trains in 1971, we would incur a recurring subsidy of 1 trillion dollars per year to keep the auto industry going. Not a one-time shot of 1 trillion (perhaps
I’m definitely going to CafePress and publishing my “Grow Trains” bumper sticker on behalf of NARP.
By the way, its name is NRPC, the National Railroad Passenger Corporation.
Speaking of subsidy, it seems unimaginable that the Northeast Corridor would go away. Isn’t a large part of that $1 billion/year spent on the NEC anyway? The Northeast must spare no expense for transportation and I firmly believe that factoring in the commuter service using NEC assets like traffic control and signalling skews this $1 billion subsidy. Not to mention the horrifyingly busy Penn Station, which serves more passengers in 3 days than all three NYC airports serve in one year.
The NEC consumes very little of the $1B - and that includes all of the track, signalling, stations, etc. It’s all booked against the NEC. The Amtrak NEC trains generated $1B in revenue in Sept and had avoidable and shared costs of $640M. The LD trains, all by themselves, had rev of $454M and avoidable and shared costs of $936M. Avoidable alone was $635M. Read all about it here:
NEC ticket revenue for September 2008 was $79.4 million. NEC ticket revenue for FY 2008, which ended on September 30, 2008, was $950.6 million.
NEC revenue for FY 2008, which includes ancillary business revenue generated by the NEC, was $1009.4 billion. Attributed Costs for the fiscal year were $640.4 million, leaving a contribution before interest and depreciation of $369 million. The NEC was the only segment of Amtrak’s operations that covered its operating costs.
FY 2008 ticket revenue for the long distance trains was $414.7 million and total revenue was $454.5 million. Total attributed costs were $936.3 million leaving a loss of $481.8 million before interest and depreciation. As stated, the avoidable cost alone was $635.2 million. The long distance trains lost $43 million more in FY 2008 than FY 2007 despite carrying 9.2 per cent more riders.
If the long distance trains were eliminated, and Amtrak was able to shed the overheads associated with them, as well as adjust ticket prices for the NEC and State Supported and Other Short Distance Corridor Trains, it might just be able to break even. At a minimum it could cut its losses significantly. And begin to look more like a real business.
Most passenger transport systems in the United States, including intercity and commuter rail, use shared rights-of-way. Most major railroads in the U.S. were built to carry freight and passengers, with the bulk of the profits generated by hauling freight. Few roads were built exclusively for passengers.
Airlines pay for the use of the airports. They buy gates, i.e. cover the capital costs associated with building the passenger terminal, and pay landing fees. Commercial airlines use approximately 30 per cent of the airway capacity in the United States. This includes the country’s airports. The other 70 per cent is used by military and general aviation. The airways are open to any user who meets the operating standards.
Highways, navigable rivers, ports, etc. are also open access byways. Users pay for the right to access them. In the case of motorists, the user fee is the gasoline and diesel tax that rides on every gallon of fuel. Admittedly, the fee is insufficient to cover the cost of the highways, at least, so monies must be transferred each year from the federal government’s general fund to the Highway Trust Fund.
For FY 2007 airline passengers received a federal subsidy of .44 cents per passenger mile. In addition to the federal subsidy, they received the benefit of the tax free financing that was used to construct most of the nation’s airports. Determining the present value of this financing is impracticable, but it is probably no more than two or three cents per passenger mile. That brings the airline subsid
All I can say is that I’m glad that you don’t live on this side of the pond. By your logic,without any subsidies all passenger rail services in the UK and continental Europe would eventually have to close. Perhaps you should study out the effects of Dr Beeching’s dramatic pruning of the Bri
As to travelling Greyhound, I rode the Amtrak Southwest Limited once the whole way from Chicago to Pasadena, CA in coach. I actually rode the Sunset once overnight from Tucson to LA in coach and it was OK, but 40 hours on the Southwest Limited (yeah, back in the day they kept that schedule). Yes, you had a coach seat comparable to the most deluxe business class on a trans-Pacific jetliner, you could “walk around and go to the lounge and dining car”, but 40 hours of that pretty much cured me of long-distance train travel. Sort of like a mini-Trans Siberian Express – do that once to say you’ve done it and then revert to airliners from then on.
I think the Canadians have this right. They run the one trans-Canada long distance train using F40’s and Heritage Fleet rolling stock, they run long consists to meet peak demand, they charge a goodly sum for first-class accomodations but people I know who rode it speak well of the level of service, and they discharge their obligation to National Heritage and tourism and people wanting a long-distance train experience. And they concentrate their effort on providing real transportation with trains in their highly-populated Montreal-Toronto corridor.
why hasn’t AMTRAK released its october and november performance? Their web site says the figures will be released no more than 45 days from the end of a month. ???