The Silver Star Experiment

Trains Magazine Passenger
1

The removal of the diner from the Silver Star appears to have been a major factor in producing a significant cost savings for the train in FY16.

The operating loss for the Silver Star, based on total revenues, before depreciation and interest, decreased by $10.9 million or 4.1 cents per passenger mile between 2015 and 2016. The operating loss for the Silver Meteor decreased by $1.8 million or .3 cents per passenger mile.

The operating loss per passenger mile for the Silver Star in FY16 was 17 cents; the loss per passenger mile for the Silver Meteor was 15.2 cents. In 2015 the loss was 21.2 cents per passenger mile for the Star vs. 15.5 cents for the Meteor.

In FY16 the operating losses for the long distance trains decreased by $19.6 million or .5 cents per passenger mile compared to FY15.

Sleeping car passengers on the Silver Star increased from 32,703 in FY15 to 35,151 in FY16 or 7.5 percent. Sleeping car ticket revenues decreased from $8,089,017 to $7,124,882 or 11.9 percent.

During the same period sleeping car passengers on the Silver Meteor decreased from 43,434 to 41,847 or 3.7 percent. Sleeping car revenues decreased from $12,057,773 to $11,678,729 or 3.1 percent.

The total number of passengers on the Silver Star decreased from 383,347 in FY15 to 364,271 in FY16 or 5 percent. Ticket revenues decreased from $33,108,142 to $29,261,496 or 11.6 percent. The decrease in ticket revenues for the Star was $3,846,646, including a $964,135 reduction in sleeping car fares, which was more than offset by the $10.9 million reduction in operating costs. Some of the operating costs, however, are non-cash items, whereas the t

2

Costs down on the Star, but traffic too – by more than on the Meteor. What a triumph!

I missed identification of the Star savings with elimination of the diner, in whole or in part.

3

But he said the sleeping-car patronage was UP on the Star, which is the only part of the patronage that counts with unavoidable dining-car losses … or is where we’d most expect to see passenger loss (to the Meteor, perhaps) if the legacy dining car service were important to large numbers of sleeping-car passengers.

Note that a significant reason for the increase in sleeper passengers was ‘lower fares’, which if I recall correctly were in large part a direct result of stopping the built-in dining-car “subsidy” in the sleeper fares.

I’m surprised nothing was made of the latter point, explicitly, in justification of the diner ‘experiment’ and its likely extension to other routes. It’s the combination of lower costs without the diner, and lower fares reflecting this leading to presumably greater sleeping-car patronage, that was the initial premise given for the experiment, and it would appear fair to me that the data given would substantiate that idea.

I do not know whether the ‘non-sleeper’ traffic loss can be attributed in part to the absence of dining-car service; in fact, I don’t know if Amtrak keeps separate statistics for meals served as part of sleeper accommodations vs. to other passengers. But I find it unlikely that the necessary large number of ‘disappearing’ coach passengers would make the decision not to travel on Amtrak simply because diner meals were not being served.

4

Establishing cause and effect can be challenging.

If there was only one major change in an operation, ie. removal of the dining car from the Silver Star, as opposed to multiple changes, ie. schedule changes, equipment configuration changes, etc., a reasonable conclusion is that the removal of the dining car from the Silver Star was the major driver in reducing the train’s operating expenses in 2016.

An important hint that dropping the dining car from the Silver Star was the most significant factor in reducing the expenses of the Star is shown in the Other Post Employment Benefits expense, which is driven by the number of employees. The OPEB expense for the Silver Star declined by more than $700,000 in 2016, probably as a result of the elimination of the dining car employees.

5

Amtrak creates a ticket for every passenger who eats in the dining car on the long distance trains. It knows the percentage of passengers that come from the coaches and the percentage of passengers that come from the sleepers.

As far as I can tell, however, they don’t make these numbers public.

6

While the Star’s operaring loss dropped considerably to 17 cents per passenger mile, that is still higher than the Meteor’s at 15.2 cents per passenger mile. Obviously there is more to the story than just dining car costs.

7

Both trains probably incurred lower fuel espenses, but I doubt lower fuel expenses were a major driver in the $10.9 million reduction in the Star’s expenses.

If there is more to the story than just the elimination of the expenses associated with the dining car, the challenge is to identify he other variables from Amtrak’s verifiable data.

What the numbers tell us suggests that removal of the dining car from the Star, coupled with a reduction of sleeper class fares, was the major expense reduction driver. But there could have been others.

Maybe removal of the diner, along with a coach due to lower coach volumes, made it possible to run the train with just one locomotive. I don’t know. However, even if removal of the diner resulted in a reduction in the number of coaches pulled and the number of locomotives required to pull the train, the initiating change driver probably was the removal of the dining car, unless we can get some verifiable data that other variables played a major role in the expense reduction outcomes.

8

Looks like the experiment on the Star is a success, at least based on the numbers provided. It should be tried on anot

9

In the Monthly Performance Report, they do list sleeper class only ridership and revenue. You could go back and subtract from total ridership and revenue.

But NARP breaks down the numbers (FY 2015) in more detail: (https://www.narprail.org/site/assets/files/1038/trains_2015.pdf)

Each LD train has ridership separated between coach and sleeper.

Examples:

Silver Meteor:

Coach Sleeper Total

Passengers 298,592 43,407 341,999

Average trip 583 miles 942 miles 629 miles

Average fare $ 87.00 $278.00 $111.00

Lake Shore Limited:

Coach Sleeper Total

Passengers 314,449 38,555 353,004

Average trip 443 miles 721 miles 473 miles

Average fare $ 60.00 $247.00 $ 80.00

Southwest Chief:

Coach Sleeper Total

Passengers 299,214 63,785 362,999

Average trip 783 miles 1382 miles 888 miles

Average fare $ 82.00 $315.00 $123.00

By percentage:

SWC: 17.6% of passengers are sleeper

SM: 12.7% of passengers are sleeper

LSL: 10.9% of passengers are sleeper

So you expect between 10-20% of Amtrak passengers use sleeper service. Based on these three, the longer the potential ride the more likely a passenger will use sleepers.

10

The numbers I posted are for 2016, which was the first full year of operating the Silver Star without a dining car.

The financial performance of the Silver Star in 2016 improved significnatly compared to that of the Silver Meteor.

In 2016 the Star carried 24,864 more passengers than the Meteor. This number was impacted by the increase in sleeper passengers offset by a decline in coach passengers.

In 2016 9.6 percent of the Star’s passengers rode in a sleeper compared to 12.3 percent for the Silver Meteor.

Between 2011 and 2016 sleeper passengers made up an average of 14.9 percent of long distance passengers and 2.1 percent of system passengers.

Sleeping car passengers pay more per passenger mile than coach passengers. Whether they cover the fully allocated cost of their ride is unknown, or at least Amtrak does not publish the numbers.

According to the only study that I have seen regarding subsidies for long distance passengers, which was published by the DOT IG in 2005, sleeper class passengers required a higher subsidy than coach passengers. Whether this dynamic still holds is unknown.

11

It might be interesting to compare FY16 to Fy14, if data is available. The “no diner” experiment started in July 2015, which causes 3 months of savings in FY15 or about $2.7 million. Adding this to the $10.9 million gives an actual savings of about $13.6 million, which should be seen when comparing to FY14. Fuel savings is not significant, as you stated. If we knew how many diner staff were deleted, we could figure that saving. Subtracting that from the total savings should give a number for cleaning, stocking, maintenance, overhaul of diner and percentage of locomotives, fuel, food, and administration, etc. This could be further broken down by selectively using percentage of total expenditures.

In the 2005 IG report they state that sleeper car passengers eat a little more than half of all the meals from the diner. Thus coach passengers are a little less than 50% of the diner customers.

12

NARP Data, FY 2014

https://www.narprail.org/site/assets/files/1038/trains_2014.pdf

13

A better comparison, I believe, would be to wait until 2017 is in the books, and then see whether the trend that developed in 2016, which was the first full year of the experiment, continues.

Most corporate planners like to see at least two or more years of data to determine if a trend will stick. They also like to see a full calendar cycle that incorporates seasonal changes, etc.

The most important point, at least from my perspective, is the Silver Star saw a significant reduction in its operating costs in 2016. The only identifiable event I can think of that triggered the reduction was the elimination of the dining car and the corresponding reduction in sleeper class fares.

Hopefully Amtrak will stick with the experiment long enough to see whether one of its long distance trains sans the dining car has market staying power.

14

The Three Rivers (replacement for the old Broadway Limited) to my knowledge never had a full dining car, just a lounge car, and that lasted quite a few years before being canceled.

http://www.timetables.org/full.php?group=20011028n&item=0028

15

One factor I don’t see referenced is that the Silver Meteor serves eastern parts of the Carolinas that have, I believe, somewhat more people. How does this affect the calculations?

16

I would think the Star serves more people when it comes to North Carolina as it serves Raleigh which is one of the largest cities in the state (2nd to Charlotte). All you have in Eastern North Carolina is Rocky Mount and Fayetteville.

17

Looking at the 2010 census numbers, the Star serves seven Carolina cities that the Meteor does not serve, with a toal population of 674,615. The Meteor serves five Carolina cities that the Star does not serve, with a total population of 365,440. The population of Raleigh alone (400,892) is greater than that of all of those places that the Meteor serves. Cary (Kerry) alone had a population of 135,234–almost as much as that of Charleston, and Columbia had 9,000 more inhabitants than Charleston had.

18

Maybe that is the reason the STAR is selling out WASH <> SAV quicker than the Meteor ? But that route also served by Palmetto.

19

Interesting, especially since the southbound Star arrives in Savannah 0413, and the orthbound leaves at 0122. The Meteor has much more convenient times.

20

I’m suprised both the Meteor and Star are still running, Dosen’t one of those trains have a heritage diner or have those been replaced by newer equipment?