Amtrak: Operating Deficit, Government Operation, etc.

OrangeGrove wrote:

Philly Amtrak Fan wrote:If they really wanted to cut that percentage they could try to blackmail the states into covering the LD routes or at least part of them like they did the state supported routes. I don't believe one of the state supported routes were actually cut as a result of PRIIA. You know which route I say could be the test pilot to blackmail the states to see if they can get off the federal "payroll" and onto the states

The long-distance trains actually generally require only a moderate level of federal subsidy; Far more money could be "saved" by mandating the northeastern states pay the full cost of the Northeast Corridor, which has costs several times that of the national system (remember that Acela's fictional profit is only "above the rail"). Not that I'm suggesting such a mistaken concept, of course.

The idea of the northeast states getting a free ride, via federal funding, while states in the remainder of the nation have to pay the full cost of all their trains is a counterproductive, indefensible concept and a non-starter. Regardless, the states do not pay the full costs for their regional trains; Amtrak continues to bear some expenses for these services, which is fair and reasonable; A revival of a modern 403(b) program could potentially be fruitful for expanded state and regional services.

But the NEC brings in a lot more riders and a lot more revenue. The NEC pays its weight, it's White Sulphur Springs that doesn't.

electricron wrote:More seats on the trains on the corridor doesn’t necessarily mean more passengers in the seats.

The methodology used accounts for trainsets in maintenance by deriving average revenues per trainset from total Acela revenues. The fact that these services are consistently sold out at peak times and especially through New York is a very strong indicator of unmet demand. Using average revenues per trainset also presumes that trains will operate only at current load factors. Although the assumption does of course imply more overall passengers it does not imply that all of the new trainsets will sell out all of their available inventory. I think on the whole this assumption is reasonable especially in light of the currently sold out status of so many trains at NYP essentially year round Monday - Friday with additional block sell outs during peak travel around all holiday periods.

In light of the above I think one has to assume that there will be additional passengers originating or arriving at NYP with deployment of the new trainsets. The real question is "how many"? My calculations, perhaps optimistically, predict that Amtrak is going to sell most of their new peak availability as well, which in some cases also includes new trains in addition to new capacity on existing trains. In my opinion the strongest data point in favor of this relatively dramatic increase in ridership is the fact that ridership on the Acela has plateaued for multiple years now despite record levels of ridership.

Using only the available information this is a very clear indication that most of the trains are completely full most of the time. That being the case I think question remains, "how many"?

Yes, but you have forgotten what the disappointed Acela passenger do today when they can not book an Acela train. They book an Amfleet train instead.
Therefore, it is reasonable to suggest the most likely source of new Acela passengers in the future will come from the existing Amfleet passengers pool.
You can’t just count the increase revenues from selling more Acela seats without considering the loss of revenues from fewer Amfleet sales. Future Amfleet increase in sales is going to come from increasing services to the NEC branch lines, where Acela trains can not go. Those NEC branch line services are mostly dependent upon state subsidies.

Are the Northeast Regionals also selling out (or close too it?)

Some additional data found at Wiki:
Regional passengers per year = 8,409,662 (FY16)
Acela passengers per year = 3,473,644 (FY2015)

Also from Amtrak https://www.amtrak.com/national-facts" onclick="window.open(this.href);return false;
A) The Amtrak Northeast Corridor (NEC) is the busiest railroad in North America, with approximately 2,200 Amtrak, commuter and freight trains operating over some portion of the Washington-Boston route each day.
B) 17.6 million trips were made by Amtrak passengers on the NEC in FY 2015. This included all Amtrak trains that traveled over some portion of the NEC spine (Washington - New York - Boston) and connecting corridors to Harrisburg, PA, Springfield, MA, Albany, NY and Richmond, VA.
C) In FY 2015, Amtrak carried 11.7 million passengers on Acela Express and Northeast Regional service trains on the NEC spine (Washington - New York - Boston) — the best year ever.
D) Approximately 750,000 Amtrak and commuter passenger rail trips are taken on the NEC every day.

Here’s an interesting question a little math will solve.
How may passengers ride trains on the NEC branch Lines = 17.6 - 11.7 = 5.9 Million

So here’s the NEC ridership breakdown:
17.6 million Regional and Acela NEC and branches
8.4 million Regional on NEC corridor
5.9 million Regional NEC branches
3.4 million Acela on NEC corridor

If Acela gains 30% more riders, most of them is going to come from Regional corridor trains.
To fill the now empty seats on the Regionals, Amtrak is going to have to target growing ridership where these trains can go that Acela trains can’t go.

Or, Amtrak will have to lower prices on Regional service to attract passengers from buses, cars, planes, and the “no-go” option.

mtuandrew wrote:Or, Amtrak will have to lower prices on Regional service to attract passengers from buses, cars, planes, and the “no-go” option.

If they lower fares, that would reduce the profitability of the Regional trains, if not also reducing their revenues. Either way, they will have to find a way to increase ridership to maintain Regional trains profitability, or they could reduce the number of Regional trains to match demand. Flooding the market with extra seats is going to affect all fares, including fares for Acela.

OrangeGrove wrote:

Philly Amtrak Fan wrote:If they really wanted to cut that percentage they could try to blackmail the states into covering the LD routes or at least part of them like they did the state supported routes. I don't believe one of the state supported routes were actually cut as a result of PRIIA. You know which route I say could be the test pilot to blackmail the states to see if they can get off the federal "payroll" and onto the states

The long-distance trains actually generally require only a moderate level of federal subsidy; Far more money could be "saved" by mandating the northeastern states pay the full cost of the Northeast Corridor, which has costs several times that of the national system (remember that Acela's fictional profit is only "above the rail"). Not that I'm suggesting such a mistaken concept, of course.

The idea of the northeast states getting a free ride, via federal funding, while states in the remainder of the nation have to pay the full cost of all their trains is a counterproductive, indefensible concept and a non-starter. Regardless, the states do not pay the full costs for their regional trains; Amtrak continues to bear some expenses for these services, which is fair and reasonable; A revival of a modern 403(b) program could potentially be fruitful for expanded state and regional services.

I'm not sure this is accurate. long distance trains lose a sizable amount of money, the "real" free idea northeast states were getting is coming to an end because of PRIIA212. In other words, large amounts of expense were incurred maintaining the NEC explicitly for the benefit of commuter railroads. frankly two tunnels is quite enough for Amtrak's intercity service in NY as is all of Penn Station..it's just not enough to support commuter service as well.
the most bizarre part of our nation's rail policy is that it funds things like the CA Zephyr but not services like the Pacific Surfliner. Ideally the federal government would provide matching capital funds for improvements to regional services. the primary reason the NEC does not have an operating loss is that trip times are competitive. knock 40 minutes out of LA-SD and the Surfliner's operating picture would change dramatically.

Given that corridor ticket prices are among the highest in the developed world, I have trouble seeing how there isn't mroe bums to fill seats if we're allowing for at least modestly lower ticket prices

The previous poster and others have pointed out that the Northeast Regional service appears likely to lose riders as a result of the additional capacity on the Acela.

Although I expect some ride shifting upwards my impression all along has been that Acela is a completely different class of service with a more upscale clientele. Consequently my analysis on new ridership has been focused on minimal net losses of riders from the Northeast Regional and significant gains in the combined air rail markets of NYP-WAS and NYP-BOS.

If you look carefully at the Five Year Service Line Plan I think it has the answer as to why this is a reasonable expectation ...

PDF Page 14 of 140 shows the Customer Analysis for the Northeast Regional and the Acela. Most of the demographics are quite similar with only a little skew in one direction or the other.

But there are two big differences, trip purpose and personal income. 32% of travel on the Northeast Regional is business or commuter travel. On the Acela it's 61% almost double the Northeast Regionals. Personal income average is $124,000/year but on the Acela it's $170,000 (37% higher). Knowing median income in this case might be more helpful because of potential distortions in distribution but regardless it's very safe to say that Acela, with double (!) the rate of business travel is clearly focused on a different market than the Northeast Regional which has a much more balanced mix of travelers.

Given three or more years of regular sellouts for Acela's peak time trains I would not expect the distributions in trip purpose and personal income to be so different if riders were merely selecting downwards and taking the next available train. But that does not appear to be what's happening. In reality for many (but not all) business travelers Acela is the only rail option they will consider. What are they doing if the Acela is sold out? They are taking another mode (probably airplane) or simply not traveling at all.

This scenario really does point towards latent demand from price insensitive passengers who may expand the travel market once more Acela capacity comes online.

One other point to consider is that as the infrastructure of the NEC is upgraded and the average speeds of the regionals increases, They might be rebranded as budget class Acelas and priced accordingly. This would be especially true when they receive new cars eventually

Alex M wrote:One other point to consider is that as the infrastructure of the NEC is upgraded and the average speeds of the regionals increases, They might be rebranded as budget class Acelas and priced accordingly. This would be especially true when they receive new cars eventually

There are definitely some upgrades in the making that will result in improved speeds for the Northeast Regionals. However, any speed increase beyond 125 MPH will have no effect. New Jersey through Princeton upgrading to 160 MPH is one example. Those improvements will only help the Acela.

gokeefe wrote:

Alex M wrote: ... consider that as the infrastructure of the NEC is upgraded and the average speeds of the regionals increases ...

... some upgrades in the making will result in improved speeds for the Northeast Regionals. However, any speed increase beyond 125 MPH will have no effect. New Jersey through Princeton upgrading to 160 MPH is one example. Those improvements will only help the Acela.

I'm not seeing enuff upgraded sections of the NEC going to speeds above 125 mph to make any impact. In fact, you mention the only one that I can think of.

The biggest time savers will be the Baltimore tunnels, the new Susquehanna bridge, other bridges mostly in Maryland, and the Gateway package of Portal bridge/added tracks Newark-Penn Station/new Hudson river tunnels.

Almost all of those projects are mostly about eliminating bottlenecks and slow-speed sections. They aim to raise the speeds of both Acelas and Regionals largely by adding third or fourth tracks. But even with considerable work to achieve faster speeds, the Acelas will NOT be flying thru the Baltimore tunnels or over new bridges at 160 mph. They will be lucky to cross any bridges at more than 110 mph.

All that to say, I don't see the Acelas leaving the Regionals in the dust. They both will go faster than they do now. Together they will grow the market.

Bingo ...

From Amtrak via PR Newswire:

"We provided a vital transportation service to more customers and created strong value for the federal investment," said Amtrak Board Chair Tony Coscia. "And we're going to do even better. Over the next several years, we're aiming to cover total operating costs from ticket and other revenues by strengthening our services and continuing to drive efficiency. To do this, we are making investments in tracks and stations, on our trains, and in the delivery of customer service so that we can serve more customers with a better experience."

To elaborate further on the statements reported from the Board Chair:

Amtrak is going to lean on their newly self-sufficient status as a lever in favor of capital improvements and to permit consideration of service expansion. This change will also be the basis for legislative reconsideration of the Basic network.