Amtrak Operating Deficit Appears Likely to End

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Re: Amtrak Operating Deficit Appears Likely to End

Postby gokeefe » Wed Nov 22, 2017 1:54 pm

east point wrote:That may attract some previous NER riders to Acela ?


I looked at my response and realized that "more to the point" I didn't actually answer your question. I certainly share in the curiosity regarding potential ridership shifts from the Northeast Regional to Acela as a result of the increased frequencies.

Amtrak is in an interesting quandry here. First, it appears likely based on their own published statistics that there is a significant demographic which will only ride the Acela. In this case an increase in Acela service does not imply lower load factors but rather merely higher ridership on that service with the same or similar customer mix (60% business travel). This also means that the Northeast Regional riders (about 30% business travel, 40% leisure) will not necessarily have an opportunity to "upgrade" at a more accessible price point.

Second, assuming that the Acela service changes move forward as planned it is not at all clear whether or not the Northeast Regional schedule will remain the same or see a decrease in frequency. Between NYP and BOS this seems to be implied given the slot agreements for service over the Connecticut drawbridges, but even this factor is scheduled to be renegotiated soon.

If I were to take a guess at what Amtrak is going to do here's what I would keep in mind:

1. Northeast Regional currently runs at an operating profit and contributes substantially towards the mitigation of the annual operating deficit.

2. Northeast Regional ridership has a significantly different ridership profile than Acela. More leisure travel and more price sensitive.

3. Northeast Regional (to include satellite service like the Keystones and the Springfield Shuttle) serves a broader set of communities, some of which are economically distressed.

4. There are major political implications resulting from points #3 & #4. No one wants to see less service to places that need more trains. No one wants to hurt economic growth and development in communities that have been stagnating and only recently begun to revive.

So, Amtrak has some major risks ahead if they cut Northeast Regional service. With the above four points in mind the obvious choice would appear to be to emphasize the "all stops" schedules while de-emphasizing the "limited" or "quasi-express" services that some Northeast Regionals currently run. If a customer is time sensitive enough that this change is unacceptable there is a fair chance that they will be able to afford an upgrade to Acela. Otherwise the change will probably mean less than a hour difference in travel time between end points (NYP-WAS or NYP-BOS) from current Northeast Regional schedules.

One other point to keep in mind: the Long Distance services may see faster speeds from the new dining car and baggage cars which previously limited most of these trains to 90 MPH. Amtrak may not want to commit passenger loads to these trains northbound due to potential reliability issues with host railroads but it may be worth reconsidering very carefully given the premium that limited track and rolling stock resources command.
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Re: Amtrak Operating Deficit Appears Likely to End

Postby east point » Wed Nov 22, 2017 3:24 pm

[quote="gokeefe

Amtrak is in an interesting quandry here. First, it appears likely based on their own published statistics that there is a significant demographic which will only ride the Acela. In this case an increase in Acela service does not imply lower load factors but rather merely higher ridership on that service with the same or similar customer mix (60% business travel). This also means that the Northeast Regional riders (about 30% business travel, 40% leisure) will not necessarily have an opportunity to "upgrade" at a more accessible price point.

So, Amtrak has some major risks ahead if they cut Northeast Regional service. With the above four points in mind the obvious choice would appear to be to emphasize the "all stops" schedules while de-emphasizing the "limited" or "quasi-express" services that some Northeast Regionals currently run. If a customer is time sensitive enough that this change is unacceptable there is a fair chance that they will be able to afford an upgrade to Acela. Otherwise the change will probably mean less than a hour difference in travel time between end points (NYP-WAS or NYP-BOS) from current Northeast Regional schedules.

.[/quote]

What Amtrak will have to do is a bucket of worms. Even a 3 D matrix cannot cover all the possibilities and results . All the variables such as how soon the Acela-2s become full operational, funds available to upgrade NEC and new equipment, Any incidents putting out some train sets / cars out of operation, equipment displaced from apparent Siemens coach deliveries, additional passenger demand from reduced times enroute, passenger perceptions of Acela 1st and business class compared to NER BC coach, alternate transportation uses, politics, etc. The best a planner can probably do is set up an ultimate plan. Then factor in one or two problems as alternates.
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Re: Amtrak Operating Deficit Appears Likely to End

Postby Gilbert B Norman » Wed Nov 22, 2017 7:53 pm

gokeefe wrote:Amtrak is in an interesting quandry here. First, it appears likely based on their own published statistics that there is a significant demographic which will only ride the Acela.


Who am I to question Amtrak's market research, but I read Mr. O'Keefe's captioned quote as Amtrak identified a demographic of passengers that if they cannot book an Acela of their choice, they're off to LaGuardia or National.

In which case, I'm at a loss to understand why they backed out of the forty additional Acela Coaches. For the new longer sets, they must lengthen the Car Barns, so why not have gotten on that when they were ready to move on the additional forty cars?
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Re: Amtrak Operating Deficit Appears Likely to End

Postby gokeefe » Wed Nov 22, 2017 9:05 pm

Gilbert B Norman wrote:Who am I to question Amtrak's market research, but I read Mr. O'Keefe's captioned quote as Amtrak identified a demographic of passengers that if they cannot book an Acela of their choice, they're off to LaGuardia or National.
In which case, I'm at a loss to understand why they backed out of the forty additional Acela Coaches. For the new longer sets, they must lengthen the Car Barns, so why not have gotten on that when they were ready to move on the additional forty cars?


They do not have to lengthen the maintenance facilities. That is the "big news" out of the articulated tilting "hybrid". It's in the Alstom information. They're going to have their cake and eat it too and I don't blame them for it one bit.
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Re: Amtrak Operating Deficit Appears Likely to End

Postby east point » Thu Nov 23, 2017 12:28 am

gokeefe wrote:[

They do not have to lengthen the maintenance facilities. That is the "big news" out of the articulated tilting "hybrid". It's in the Alstom information. They're going to have their cake and eat it too and I don't blame them for it one bit.


That is correct as far as the original order for the Acela-2s. However the option for additional cars for each train set will require making the facilities longer. Now if Amtrak ever orders more cars ? Al depends on demand for seats by the public ?"
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Re: Amtrak Operating Deficit Appears Likely to End

Postby BandA » Thu Nov 23, 2017 1:59 am

Future headline:
Apr 1, 2021 "Amtrak Shareholder Railroads Demand Dividend Payments".

More seriously, what kind of interest rate will Amtrak get when they issue bonds for capital projects? Do they have access to Treasury financing? Having Uncle Sam backstop/tax exempt your bonds is a great advantage...

On the Acela2 vs NER issue, I assume Acela2 will still be capacity constrained, unless they order options, so slower "conventional" rolling stock will still run. But Acela2 is supposed to be more cost-efficient to operate, so there will be a convergence on the cost side between Acela2's and whatever Siemens products they replace the Amfleets with. I'm assuming the Coast Guard will allow more slots.
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Re: Amtrak Operating Deficit Appears Likely to End

Postby Tadman » Thu Nov 23, 2017 11:00 am

Gilbert B Norman wrote:
gokeefe wrote:Amtrak is in an interesting quandry here. First, it appears likely based on their own published statistics that there is a significant demographic which will only ride the Acela.


Who am I to question Amtrak's market research, but I read Mr. O'Keefe's captioned quote as Amtrak identified a demographic of passengers that if they cannot book an Acela of their choice, they're off to LaGuardia or National.

In which case, I'm at a loss to understand why they backed out of the forty additional Acela Coaches. For the new longer sets, they must lengthen the Car Barns, so why not have gotten on that when they were ready to move on the additional forty cars?


I'd be even more interested to see what the research shows the alternative is, per the underlined remarks. I strongly prefer not to fly along NEC myself. I've only done it a few times. One was when I needed to go Norfolk-Providence, which is a very long ride. It was also to be an overnight trip. Given that Acela does not run south of WAS, my only choice was to cab to a place where I could catch the overnight sleeper-less train and slum it to Providence in time for a 9am meeting. No thanks. AMR to Philly and Providence.
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Re: Amtrak Operating Deficit Appears Likely to End

Postby gokeefe » Thu Nov 23, 2017 8:59 pm

east point wrote:That is correct as far as the original order for the Acela-2s. However the option for additional cars for each train set will require making the facilities longer. Now if Amtrak ever orders more cars ? Al depends on demand for seats by the public ?"


They will have the revenue to do it and it won't matter. These are all problems that money can solve. If ridership is so heavy that they are looking at lengthening trainsets money won't be the problem.

Right now they have to finance so the logical option is to buy what you can and then take another bite when your cash position improves.
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Re: Amtrak Operating Deficit Appears Likely to End

Postby Woody » Fri Nov 24, 2017 5:34 pm

gokeefe wrote:
east point wrote:... There is certainly either work in progress or planned that will enable schedule reductions.

Reduction in travel times? Maybe.
... already announced an expected increase in train frequency for Acela. Every 30m WAS-NYP and every hour BOS-NYP.

Whoa! Fellas, please! You are way ahead of things.

Amtrak recently listed its big projects planned for the NEC south of NYC. The Portal Bridge, new tunnels under the Hudson, the new Susquehanna bridge, and the new tunnel under Baltimore. The Portal Bridge is closest to "shovel ready". It could be finished by 2025 with great good luck. The others are looking like 2030 -- yeah, on a bright sunshiny day.

Work actually underway includes the new catenary on the Jersey Speedway, to save at best 1 min 40 sec iirc.

Probably no reduction in NEC travel times before 2025.

Oh yeah, the LD trains could speed up from 110 to 125 mph when ALL the heritage equipment is retired AND the current Viewliners are upgraded and approved for the higher speed.

OK. Got new baggage cars. Getting new diners. Will get new bag-dorms next year. Get the V-2 sleepers in 2019 and 2020. Then the 25 existing Viewliner sleepers go to rehab. Don't hold your breath on seeing faster LD trains on the NEC before we see Acela 2s.

And the plan for more Acelas is only two more frequencies in the morning rush hour and two more in the evening rush, to allow half-hour frequencies in those two windows. The rest of the day will still offer hourly service.

The future is looking good, but it remains in the future.
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Re: Amtrak Operating Deficit Appears Likely to End

Postby JimBoylan » Fri Nov 24, 2017 6:20 pm

Woody wrote:Then the 25 existing Viewliner sleepers go to rehab. Don't hold your breath on seeing faster LD trains on the NEC before we see Acela 2s.
What about the other 25 esxisting Viewliner sleepers?
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Re: Amtrak Operating Deficit Appears Likely to End

Postby gokeefe » Fri Nov 24, 2017 9:26 pm

Woody wrote:And the plan for more Acelas is only two more frequencies in the morning rush hour and two more in the evening rush, to allow half-hour frequencies in those two windows. The rest of the day will still offer hourly service.


I would be interested to know if this is documented online somewhere. That's the first I've heard of this. Everything I've read so far has been unequivocal that the additional 8 Acela trainsets delivered by 2022 will result in half hour interval service between NYP-WAS and 1 hour interval service between NYP-BOS. I'm not sure how 8 additional trainsets would only result in four additional roundtrips per day given the fact that some trainsets make a same day turn.
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Re: Amtrak Operating Deficit Appears Likely to End

Postby east point » Fri Nov 24, 2017 11:51 pm

gokeefe wrote:
Woody wrote:And the plan for more Acelas is only two more frequencies in the morning rush hour and two more in the evening rush, to allow half-hour frequencies in those two windows. The rest of the day will still offer hourly service.


I would be interested to know if this is documented online somewhere. That's the first I've heard of this. Everything I've read so far has been unequivocal that the additional 8 Acela trainsets delivered by 2022 will result in half hour interval service between NYP-WAS and 1 hour interval service between NYP-BOS. I'm not sure how 8 additional trainsets would only result in four additional roundtrips per day given the fact that some trainsets make a same day turn.


Wouldn't hourly round trips NYP <> BOS require about 9 train sets ? subtracting about 5 - 6 train sets now operating that would mean 3 - 4 additional Acela-2 sets needed ? That is assuming that most Acela-2s would be thru NYPS.

In reference to longer servicing facilities --------- If most trips NYP <> BOS became AC-2s then the spare AM-1s might be assigned to make longer NERs. Anything trains longer at BOS will need a longer servicing facility at BOS for winter time servicing.
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Re: Amtrak Operating Deficit Appears Likely to End

Postby gokeefe » Sat Nov 25, 2017 12:46 am

east point wrote:In reference to longer servicing facilities --------- If most trips NYP <> BOS became AC-2s then the spare AM-1s might be assigned to make longer NERs. Anything trains longer at BOS will need a longer servicing facility at BOS for winter time servicing.


Unless the revenue figures justify it I doubt Amtrak would make a change solely for the sake of the Northeast Regional.
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Re: Amtrak Operating Deficit Appears Likely to End

Postby Backshophoss » Sat Nov 25, 2017 1:00 am

For now,as long as the Regional service and the Acela service are basically at "Break even" point(Fare box = expenses),
down the road,if expansion of the Acela II sets is to be done,the expense of the servicing buildings expansion will be covered by
the fare box monies.
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Re: Amtrak Operating Deficit Appears Likely to End

Postby gokeefe » Sat Nov 25, 2017 12:00 pm

Backshophoss wrote:For now,as long as the Regional service and the Acela service are basically at "Break even" point(Fare box = expenses),
down the road,if expansion of the Acela II sets is to be done,the expense of the servicing buildings expansion will be covered by
the fare box monies.


They are both well beyond that point, hence the origin of this topic. The expense of the servicing building expansion is not trivial and Amtrak's decision will almost certainly rest on a comprehensive cost-benefit analysis.

Keep in mind they've almost certainly just gone through this process for the new trainsets and the answer was, "No thanks".

Revenues could indeed help cover the cost but I doubt Amtrak will pay cash upfront. More likely they will finance it, which yet again would be something that would require extensive documentation of cost-benefit analysis.
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