List of self sustaining or profitable trains/routes

yes there are many factors in a subsidy , most the average person wouldnt know about . then there is the historical deficit in funding for amtrak , to catch up you could justify continuing the subsidy to amtrak after the subsidies to airlines ended .

Air freight is very competitive , we pay around 30 cents per pound form australia to new Zealand , around equal to sea freight costs up to a ton or so . therefore i would say theres not much profit in it .

John_Perkowski wrote:I say again: NO BUSINESS can hope to make a profit if it charges less than it needs to provide the good or service!

You're absolutely correct - if you don't charge enough, you will lose money. However, the flip side of the equation is that if you charge too much than what the market will bear, then either you must reduce costs to meet the market value of the good or service, or you will lose customers (resulting in a revenue loss, in which case you still lose money).

Case in point - Southwest Airlines. They are a profitable airline, whereas every other airline is not in the U.S.

They fly the same aircraft (Boeing 737s) as most other airlines. They fly similar routes as the other airlines. They have the same number of front-line employees, use the same airports, perform the same airline maintenance, buy the same fuel...what does SWA do different that enables them to make a profit?

They cut all the unnecessary fat in the budget. They have a lean food/beverage department. They streamlined ticketing. The corporate headquarters is run dirt cheap with used furniture (hey, it works!). They eschewed the hub-and-spoke system that other airlines claimed would improve efficiency.

True - even if Amtrak were privatized, any other company would face the exact same challenge. What I'm saying, is that with Amtrak out of the picture and private operators given the ability (between the letter of the law and cooperation with the railroads in exchange for some bribes (read: tax credits), I think a lot of people could get very creative in restoring passenger trains in the United States, in which there is a chance that these trains could become profitable. Right now, Amtrak is a virtual closed book, with little room for innovations and ingenuity if it is tolerated at all.

What I think everyone is missing is that every other form of passerger transportation is in some way subsidized. Repairs on the Interstate Highway System are paid for by the states & the federal gov't, through gas taxes. A number of Greyhound's stops are subsidized by states.

As somebody said not too long ago, the airlines only have to pay for their employees & the planes; government entities usually own the airports and regulate the skies.

Amtrak, in addition to the cost of labor, maintenance of rolling stock, and a variety of other business expenses, has to maintain stations and hundreds of miles of track. If drivers, buses, or airlines had like costs, the roads would be empty; it Amtrak didn't have those, it would be vastly cheaper to run, and would probably come damn close to making a profit.

i think its regularly been stated on here that other modes are subsidised too , if not more so than Amtrak . perhaps we have not made it obvious here , because most of the regulars here are well aware of this .

Mr. Benton, I couldn't agree more. I often used the following argument myself but some have countered with percentage of passengers.

Amtrak gets less than 1% of the federal transportation budget while the balance goes to Airlines, Highways and buses.

Based on the facts laid out by acs85 with respect to other modes of transportation and their subsidies, I don't understand how Amtrak's "unique" situation is overlooked. I think a number of people in power we can safely say are not "regulars"

If these infrastructure costs were picked up by federal and state governments, will other trains start to show a profit? Is it viable for the discussion of this thread to simply look at the train itself in terms of operating costs and revenue or do we have to factor in the cost of manning and maintaining the station as part of a train's operating cost well?

wigwagfan wrote:Case in point - Southwest Airlines. They are a profitable airline, whereas every other airline is not in the U.S.

They fly the same aircraft (Boeing 737s) as most other airlines. They fly similar routes as the other airlines. They have the same number of front-line employees, use the same airports, perform the same airline maintenance, buy the same fuel...what does SWA do different that enables them to make a profit?

They cut all the unnecessary fat in the budget. They have a lean food/beverage department. They streamlined ticketing. The corporate headquarters is run dirt cheap with used furniture (hey, it works!). They eschewed the hub-and-spoke system that other airlines claimed would improve efficiency.

True - even if Amtrak were privatized, any other company would face the exact same challenge. What I'm saying, is that with Amtrak out of the picture and private operators given the ability (between the letter of the law and cooperation with the railroads in exchange for some bribes (read: tax credits), I think a lot of people could get very creative in restoring passenger trains in the United States, in which there is a chance that these trains could become profitable. Right now, Amtrak is a virtual closed book, with little room for innovations and ingenuity if it is tolerated at all.

Well put. I'm pro-rail, but I'm no fan of Amtrak as it is presently structured. I want to see increased funding of passenger rail, but I would like to see a 'clean sheet of paper' approach used to set up the operating companies, the way Southwest and Jet Blue were begun. It would be worth the buyouts to displaced Amtrak employees to do this the right way.

This would also be dependent on legislation that would extend Amtrak's current right to operate passenger trains on freight railroads to new operating companies, although the compensation amounts need to be revised to reflect the increased value of those 'slots' on the host railroads. Doing right by the freight railroads will get them on your side and go a long ways towards ensuring the success of the new rail ventures.

Jim D.

I suspect that Amtrak, for all its inanities, is run relatively efficiently. Mr. Gunn fired a lot of redundant managers. A couple of years ago the Wall St Journal had a long article comparing JetBlue and United. I read it hoping I'd learn about some great efficiencies that JetBlue had implemented. Instead, I discovered that almost the entire reason for the two airlines' cost differences was that JetBlue employees were paid much, much less. And remember, when JetBlue was new, the stock market was booming and good employees might accept low salaries because they were getting potentially-lucrative stock options. It's hard to see that Amtrak stock options would be much of an incentive.
I am opposed to a process (call it "privatization" if you like) whose main accomplishment would be to reduce Amtrak employees' wages, probably by getting a new contractor who could employ nonunion staff at Walmart wage levels.

Lower pay is not a reason for Southwest's success, because they offer a very competitive pay and profit-sharing structure.

One of the biggest advantages enjoyed by both Southwest and Jet Blue is the ability to utilize a cross-trained workforce to perform multiple job functions, as opposed to the typical strict job divisions found at the older air carriers (and railroads). I'm certain that Amtrak or a new rail operator could benefit from similar workforce flexibility for both onboard and station functions.

JD

I do not believe that Southwest pays salaries that were competitive with older airlines before the recent wave of bankruptcies and near-bankruptcies. However, I can't provide numbers. If Southwest is an exception to the situation with the other low-cost airlines, that's interesting. However, Jet Blue paid much less than United when the WSJ article I referred to was written. Reducing the number of job titles may help in various situations, but I don't see what relevance it would have to Amtrak. I believe the Amtrak shops, where this would have most relevance, already have reduced the number of job titles. Look, more efficiency is good, and undoubtedly Amtrak's can be improved--but enough to significantly impact the bottom line? I don't think so. Those who hope that Amtrak's situation can be improved by magic are playing into the hands of those who want to eliminate rail passenger service.

According to a thread at airliners.net IIRC, Southwest has the HIGHEST paid domestic pilots in America. I'll see if I can find it.

Amtrak is just not cost competitive. Just take a look
at their costs on a per available seat mile compared to Southwest.

Southwest can't get you to Manhattan. Amtrak can. (Southwest can't even get you to JFK, LGA or EWR.) And would you care to factor in the full infrastructure cost of the various airports to the Southwest figures, not just the cut-rate landing fees? At the same time, subtract the cost of the NEC from the Amtrak figures, and then see what you end up with.

I hereby propose that comparisons between Amtrak and Southwest Airlines, on a board about Amtrak, be a new corollary of Godwin's Law specifically for Amtrak message boards. All those in favor...?

The reason why Amtrak is having the problems they are is because evryone thinks that Amtrak and Southwest are worlds apart. Sorry, they ARE NOT!

Why? They both transport passengers on a national service grid. While there are many mode-specific aspects for each, let's not get into the habit of discounting modes because they aren't trains. If more people understood the big picture, then there would be more synergy between the two. There are many basic service network and other issues that plague airlines and railroad alike such as capacity issues in key markets. Lufthansa certainly wouldn't agree with the assertion that "trains are not planes" since they get involved in both.

BTW, Islip is 90 minutes away from NYC by rail/taxi, less by direct taxi or car. So, you can get from Southwest territory to NYC without changing carriers and there is at least one cab company marketing $65 specials to Manhattan for 4 people. Not the easiest way, but far from absurd.

I believe that the number of ASMs as noted above by Mr. Practicepro, operated by Southwest far exceed Amtrak's ASMs. We might be able to get a better picture by seeing the available ASMs for both carriers in order to start breaking out overhead figures as well as the variable operating costs for both carriers. I would also like to break out corridor ASMs versus long-distance ASMs. Since corridor trains are generally pretty short nowadays, the unit costs are being spread over fewer seats.

Thanks for the info, though. I'll see what else I can dig up.

RailBus63 wrote:I'm pro-rail, but I'm no fan of Amtrak as it is presently structured. I want to see increased funding of passenger rail, but I would like to see a 'clean sheet of paper' approach used to set up the operating companies, the way Southwest and Jet Blue were begun. It would be worth the buyouts to displaced Amtrak employees to do this the right way.

Jim D.

It appears to me Mr. Jim D would like Amtrak to try to deprive its employees of collective bargaining rights. It would be quite difficult to simply buy out an entire roster of Locomotive Engineers and go hire new non union replacements. It takes a long time to train an Engineer and get one fully qualified for passenger service.

All of the unions on Amtrak have given up as concessions considerable pay, conditions, and benefits to help Amtrak survive.

If you think anybody with any potential is going to run all around the
country day and night, weekends and be away from home and family for
about what Wal-Mart would pay, I ask that you think again.

Noel Weaver