HOW DO LONG-DISTANCE TRAINS PERFORM FINANCIALLY?

[CMStPnP]

I do give him credit for determining one of the best practicable operational models for the service: regularly appending a relatively small number of private cars to an existing Amtrak train

I think that model was established by AAPRCO, myself as well as other groups such as Friends of 261 that offer such trips to private individuals or corporations regularly and hope to do so in the future as a means to raise funds using idle equipment. Carl Sandberg of the 261 group maintains Amtrak compatible equipment for the sole purpose of leasing or chartering it out and he does have a client base it seems outside of the railfan community. He seems to have plans to convert cars post pandemic to Amtrak compatible so I do not think the business or demand is dead…just yet. Other groups as well have expressed an interest to convert some of their cars to Amtrak compatibility in the future at some point but the plans are tabled right now as they are in wait and see mode (IRM for example…which has a large stock of passenger cars from the streamline era parked in Union).

BTW, heard a rumor Friends of 261 was actively looking for a decent Dining Car, preferably of Milwaukee Road lineage for both private charters and fan trips. Just a rumor via third party.

no one here has proposed doing operations of the kind Ed did, even at no more than luxury-coach scale.

So the problem here is exactly what Brightline is facing with financing for it’s Florida and expansion models. So far there is no financially sustainable example in this market place in the United States. I often wonder that if the Rocky Mountaineer makes it here in at least one market if that would encourage others to try. RMR has been successful in Canada but without slamming Canadian business people too hard. They tend not to do so well in the Unit

[charlie_hebdo]

The trains Jan 2021 issue has an extreme example of Amtrak’s fake accounting on LD trains. Look at page 23 right hand column 3rd full paragraph down. The Coast Starlight was being charged $3M for depreciation on Superliner-2 cars. That compared with $800,000 if it had used Superliner -1 cars . There was not that much difference in ages. 32 cars for 4 train sets = about $25,000 for -1s and about $93,750 for -2s each. What was going on ?

I cannot recall if the -2s were bought or leased but the whole capital cost allocations for Amtrak needs review.

Amtrak is now buying Acela-2s with a capital grant that is to be paid for by revenues. So should Amtrak charge depreciation for them ? Acela-1s are leased so no depreciation but probably lease payments ?

I don’t have the article. As JPS1 has stated clearly in the past, the authors do not cite internal documents so whatever numbers they claim are guesses.

You have no way of knowing the cost basis.

[JPS1]

The trains Jan 2021 issue has an extreme example of Amtrak’s fake accounting on LD trains.

Is Bob Johnston the author of the article? I don’t have the mag; I only buy it for my Nook when it has at least two articles that interest me. I buy four or five editions a year.

[JPS1]

I cannot recall if the -2s were bought or leased but the whole capital cost allocations for Amtrak needs review.

Amtrak uses the Amtrak Performance Tracking System (APT) to allocate revenues and costs to its various trains as well as other activities.

“APT was developed by the John A. Volpe National Transportation Systems Center (Volpe Center) of the U.S. Department of Transportation (DOT), in conjunction with the Federal Railroad Administration (FRA) and Amtrak, in response to a Congressional mandate to update Amtrak’s cost accounting.”

Following implementation, APT was audited by DOT’s Inspector General. Since then, Amtrak has continued to update the system with input from the FRA, Volpe, and the State-Amtrak Intercity Passenger Rail Committee (SAIPRC). The FRA reviews the output every month. Moreover, Amtrak’s IG periodically audits the system’s internal controls.

APT uses 52,000 different formulas to assign costs to its trains and related activities. Capital costs are assigned based on rules developed in accordance with the FAST Act.

It appears that APT was developed by an independent, objective team with management oversight. Equally important, the FRA reviews the outputs monthly, which is what an independent auditor would look for.

Here is a link to How Does Amtrak Calculate Route Financial Performance:

[JPS1]

Amtrak is now buying Acela-2s with a capital grant that is to be paid for by revenues. So should Amtrak charge depreciation for them ? Acela-1s are leased so no depreciation but probably lease payments ?

The new Acela trains sets will be funded with the proceeds from Railroad Rehabilitation & Improvement Financing (RRIF) long-term debt.

The simplified accounting entry would be a debit (charge) to Property and Equipment, etc., and a credit to long-term debt. At the end of FY19 Amtrak’s long-term debt was approximately $1.1 billion.

The financial plan is to service the debt with the incremental revenues generated by the new train sets. These will consist of any revenues beyond those required to cover the operating costs.

The trains sets will go onto Amtrak’s Balance Sheet under Property and Equipment. I suspect the amount will be placed under Passenger Cars and Other Rolling Stock, although it is possible the company will place the cost of the locomotives or power cars under Locomotives.

The cost of the train sets probably will include the actual cost paid to the vendor plus transportation in, testing, training, etc. The equipment will be depreciated over the estimated service life of the assets.

Amtrak uses the group method for depreciation. In a

[blue_streak_1]

The depreciation figures came from Coast Starlight product-line manager Brian Rosenwald from the hoaspitality industry circa 1995. ( page 23 right column 1st full paragraph. Article did not say when he left Amtrakbut speculation would be after product management was moved back to DC?

[MMLDelete]

How profitable would the airlines be if they had to pay for building and operating airports, and running air traffic control?

And do the trucking and auto industries build and maintain roads?

Those modes, if looked at honestly, are also heavily subsidized.

[JPS1]

How profitable would the airlines be if they had to pay for building and operating airports, and running air traffic control?

And do the trucking and auto industries build and maintain roads?

Those modes, if looked at honestly, are also heavily subsidized.

The questions have nothing to do with the financial performance of Amtrak’s long-distance trains.

Through a variety of direct and indirect taxes, commercial airline passengers pay a proportional share of the airways and airports used by the airlines. The same is true for the buyers of goods shipped by trucks.

Contrary to popular belief, general aviation and military aircraft operating in civilian airspace account for more than two thirds of FAA and airport operations. The airlines account for the remainder. By the same token, of the 5,080 public airports in the United States as of 2019, approximately 500 are served by commercial passenger flights.

Commercial flights and truckers have the advantage of sharing a common infrastructure with non-commercial users. Amtrak does likewise to a lesser extent. Whether they pay their proportional share of the infrastructure is a legitimate question.

[charlie_hebdo]

Lithonia Operator
How profitable would the airlines be if they had to pay for building and operating airports, and running air traffic control?

And do the trucking and auto industries build and maintain roads?

Those modes, if looked at honestly, are also heavily subsidized.

The questions have nothing to do with the financial performance of Amtrak’s long-distance trains.

Through a variety of direct and indirect taxes, commercial airline passengers pay a proportional share of the airways and airports used by the airlines. The same is true for the buyers of goods shipped by trucks.

Contrary to popular believe, general aviation and military aircraft operating in civilian airspace account for more than two thirds of FAA and airport operations. The airlines account for the remainder. By the same token, of the 5,080 public airports in the United States as of 2019, approximately 500 are served by commercial passenger flights.

Commercial flights and truckers have the advantage of sharing a common infrastructure with non-commercial users. Amtrak does likewise to a lesser extent. Whether they pay their proportional share of the infrastructure is a legitimate question.

Although Lithonia (near Redan road?) generally makes excellent post in my opini

[JPS1]

Although Lithonia (near Readan road?) generally makes excellent post in my opinion, he falls into the “Whaddaboutism” which is usually irrelevant to the issue.

JPS: Your valued contribution here is to show us the relative successes or failured of the three Amtrak lines and to point out how the dubious attempts at showing Amtrak accounting methods as invalid are not to be trusted by the readers.

Thanks!

[Dmac844]

I have wondered why the ‘3% of riders go the entire distance’ item hasn’t be scrutinized more since Richard Anderson started saying it. While it would seem reasonable that only 3% of riders take the entire California Zephyr trip from Chicago Union Station to Emeryville, the statistic is meaningless for a train that serves multiple metropolitan areas. What percentage ride Chicago-Denver? Or Denver-Sacramento? It seems to me that the more relevant number is what percentage of people ride between cities that have major air service. For the Zephyr I counted at least 36 of those combinations, since there is major air service to Chicago, Omaha, Denver, Salt Lake, Reno, Sacramento and the Bay Area. It just seems like such a misleading stat that was put forth by an Amtrak President that made it no secret that most long distance trains should be cut and actively tried to change a large portion of one route into a bus service.

[Overmod]

It seems to me that the more relevant number is what percentage of people ride between cities that have major air service.

That number is relevant, but still more relevant to the argument might be the percentage of people who ride between cities that do not have major, or ‘affordable’, air service.

It could be argued that the increased cost of providing point-to-point (or reasonable mail-stop) flight service to and from all the disparate pairs would be measurable in comparable terms to providing ‘one pair of trains’ serving them all linearly. The catch is that the speed and ease of ‘transfer’ between flights opens up significant economy of scale even for ‘unprofitable’ flight segments that go on to terminate via further connections – something Amtrak could almost never directly benefit from outside the despicable Thruway model.

[BEAUSABRE]

Not a single US railroad has ever made a profit from passenger service - of any distance. They offered it because

1. Their charter required them to do so

2. They thought it benefitted their PR and attracted freight business

3. Legislatures and regulatory agencies required it

And by the way, for the complainers about Amtrak food, dining cars were notorious money sinks.

[samfp1943]

As others have said… Amtrak IS APPROX 50 YEARS OLD. It always seems that a couple of issues, seem to always boil to the surfact where AMTRK is concerned:

1.) Amtrak is ALWAYS on theshort end of Funding.

2.) Log Distance Trains are the sacrificial virgin that the AMTRAK management is ‘always ready to throw into the volcano’.

3.) AMTRAK was ‘birthed’ to save inter-city travels in this country; due to the owning railroads[ at that time] were ‘loosing’ money on passenger travel. Additionally, the consequences of the USPS move to stop the Railway Post Office’s subsidies to the Passenger railroads.

The profits on Rail Passenger travel had been lagging since the 1950’s [starting: post WWII ,and then post Korea]

AMTRAK [nee: National Rail Passenger Corporation [ Act of 971 (?)] was founded as a quasi-public corporation. ITs funding was hostage to the House of Representatives who were the source of its operational fubnds. So it was born as a ‘child’ our olitical process; not a good way to a bright duture(?).

IT was from the start, ‘gifted’ with all the equipment, the host railroads could unload on the new ‘child’. Equipment that admitedly, was at best, well-worn’. virtually, unwanted by the foemer opwner roads.

The worst [part was that it was born into a ‘Love/Hate’] existance; not wanted by the hosting railroads, and its finances, hostage to the similar political process.

So fpr the last fifty or so years, AMTRAK has stumbled from onecrisis to another, unloved by the railroads, and a political chess piece for whichever political party was in power. Just one hell of a way to run a railroad. [:-^]

As A COUNTRY, WE WILL HAVE TO DECIDE AT SOME POINT; Do we want p;assenger railroad travel, can we afford it, as a country ? Are willing to put up enough money to make kit work, o

[54light15]

I have hopes with the new guy in the White House. We will see.

[MidlandMike]

3.) AMTRAK was ‘birthed’ to save inter-city travels in this country; due to the owning railroads[ at that time] were ‘loosing’ money on passenger travel. Additionally, the consequences of the USPS move to stop the Railway Post Office’s subsidies to the Passenger railroads.

From what people at or close to its birth have said, the purpose of [AMTRAK] was to relieve the railroads of the passenger service burden. While it may have been stated that the purpose was to save passenger service, there were a number of those founders that thought passenger trains would fail and go away. Weren’t they suprised.

[Gramp]

“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” Ronald Reagan

[JPS1]

According to a 2017 Congressional Research Study, Amtrak was created by Congress in 1970 to preserve some level of intercity passenger rail service while enabling private rail companies to get out of the money losing operation. The nation’s private railroads were off the hook.

To date Amtrak has cost the American taxpayers approximately $81 billion when adjusted for 2017 constant dollars. A substantial portion of this loss and/or subsidy is attributable to the long-distance trains.

According to the study, in 2015 Amtrak accounted for just 7/10s of 1% of intercity passenger miles by commercial carriers. The airlines accounted for 64.7% while buses took 34.7%. The ratios are still pretty much the same.

Amtrak is another top-heavy Washington based government bureaucracy. The leadership team consists of the CEO, President, and 8 Executive Vice Presidents. Who knows how vice presidents, managers, etc. Amtrak has on board?

Amtrak has more than 20,000 employees. Its salary, wage and benefit expenses in 2019 were 64% of operating expenses and 87% of operating revenue. Comparatively, the same items accounted for 37.6% of Norfolk Southern’s operating expenses and 24.3% of operating revenues. For UP the numbers were 34.1% and 21.8%. For Southwest Airlines the numbers were 42.6% and 37.1%. And for Delta Airlines the numbers were 27.8% and 23.9%

If a national passenger rail system were critical for the well-being of the country, a more effective way may have been to determine wh

[Overmod]

The peculiar thing to me is that organizational streamlining, perhaps with outsourcing of some key competencies to private entities with ‘distinctive competence’, seems like an obvious move for political organizations to initiate. That will be particularly true for a House and a Biden administration with great additional opportunity cost issues, and an interest in actually providing better trains to carry people in better perceived ways.

[MidlandMike]

Amtrak has more than 20,000 employees. Its salary, wage and benefit expenses in 2019 were 64% of operating expenses and 87% of operating revenue. Comparatively, the same items accounted for 37.6% of Norfolk Southern’s operating expenses and 24.3% of operating revenues. For UP the numbers were 34.1% and 21.8%. For Southwest Airlines the numbers were 42.6% and 37.1%. And for Delta Airlines the numbers were 27.8% and 23.9%

Comparing a passenger train costs with large crew, to a freight train with a crew of two hauling a couple of hundred cars is disingenuous. Also, an airline with large fuel costs and intense maintenance.