Time to give up on Amtrak and call the Republican's bluff

To suggest that someone's life will be negatively impacted in such a way as to prevent their ability to sustain their life without the utility of Amtrak, is simply an exaggeration in and of itself and not true. Air ambulances and local taxi, van and bus services fill the gap that these people need, and take them where they need to go.

Furthermore, those of us who live in the industrialized Northeast should not have our rail system suffer to provide barely useful transportation to those who choose to live in desolation. If those people are not happy with their train service, or lack thereof, they can choose to live elsewhere. The Northeast, mainly NJ, subsidizes states like Montana and their rail service. If market conditions are not condusive to rail service for Montana, that should be the first service to go.

Did anybody notice the story in Rhode Island about the new train station at TF Green Airport, near Providence, that will be opening with a commuter line to Boston but without an Amtrak stop? Before Amtrak will stop its trains at TF Green, Amtrak wants Rhode Island to fund track and catenary improvements that would cost $50-60 million. Also, there is the issue of rail access fees at the staion-- the state is offering to pay $15 per train-mile, while Amtrak is demanding $35 per train mile to operate over a stretch of Amtrak owned infrastructure. So while we argue about theoretical "solutions" to the problems on the NEC, here's a real life story that we can watch unfold. Does it look like Amtrak is addressing the true costs of operating like a business in this example? Is this what it would cost private enterprise to operate on the NEC? I don't know the answers and will look forward to your responses.

I live on the west coast and ride on the NEC infrequently, so I can't authoritatively speak to its performance, but it does appear to me that the needs of the NEC are different from the needs of the rest of the Amtrak system. What is the best way to re-build the NEC to the " state of good repair" we so often heard about? Do we all recall the saying "you break it, you buy it"? It appears that Amtrak and the Feds have been breaking the NEC for 35 years, and there is a responsibility to repair the infrastructure. Once (if) there is a reliable and modern infrastructure, then we should argue about who should operate the trains. Back in Econ 101 we all learned about the supply and demand equation and its applications in business. The demand truly exists for fast and reliable rail transportation, so let's take the first step and get the infrastructure working.

wigwagfan wrote:

GeorgeF wrote:While it's perhaps accurate to say that only a small, maybe very small, percentage of people would be "grossly disadvantaged", to say "not one person would be grossly disadvantaged" (outside of the NEC) must be an exaggeration, I suggest.

To suggest that someone's life will be negatively impacted in such a way as to prevent their ability to sustain their life without the utility of Amtrak, is simply an exaggeration in and of itself and not true.

Well, sure! I agree under virtually all cases. (Remember when Amtrak stopped a train on the NEC in a snowstorm to rescue people on I-95 during a blizzard a few years ago?) But I didn't say or mean to suggest that it would "prevent their ability to sustain their life". I simply said that your statement that "not one person would be grossly disadvantaged" is an exaggeration. That's all. Then again, nowhere is "grossly disadvantaged" defined. I took it to mean an extremely unwelcome gross change to their necessary travel patterns, meaning expense, times, comfort, and in a few cases, ability to travel at all. That's why I included the comment about those millions who don't have cars, or who can't, or won't, drive, be they financially stressed anywhere, or well-off Upper East Siders in Manhattan. I suppose the definition of "grossly disadvantaged" is the issue, then. If you meant that the phrase means "you're gonna die", well, I suppose dying is becoming "grossly disadvantaged"!

to all the callers of "unsubsidized" public transit of ANY form, take a look at this:
http://en.wikipedia.org/wiki/Farebox_recovery_ratio
granted, some of the data there is really old. BUT it shows one thing very clearly – the only country in the WORLD where transit systems make a profit (i.e. recovery ratio is >100%) is Japan.
enough talk of "unsubsidized" transit. in current population densities, especially in the US, it's simply unrealistic. deal with it.

lensovet wrote:to all the callers of "unsubsidized" public transit of ANY form, take a look at this:
http://en.wikipedia.org/wiki/Farebox_recovery_ratio
granted, some of the data there is really old. BUT it shows one thing very clearly – the only country in the WORLD where transit systems make a profit (i.e. recovery ratio is >100%) is Japan.
enough talk of "unsubsidized" transit. in current population densities, especially in the US, it's simply unrealistic. deal with it.

Amtrak is not "public transit", it is intercity transportation.

Amtrak cannot be compared to a local (municipal) bus/light rail/commuter rail operator; otherwise we need to put every airline and intercity bus company into the mix.

Hello, AmAir and AmBus, goodbye airline bankruptcies, Greyhound, and a profitable, successful industry in the U.S. and worldwide. American Airlines and SWA just posted yet another in a string of quarterly profits in the last few weeks.

you might as well put them all in. hey, even NJ Transit, which is far from doing anything "local" (though still commuter), doesn't pull its own weight. the airlines don't need to upkeep the air through which they fly, so that's a bad example. even more, they rarely upkeep the runways that they use.
this is not the case with rail.
the reason that the swim/sink analogy won't work with amtrak is that for any sort of "competitive" service, you'd need to invest billions upon billions, literally, of money into the infrastructure for a couple of years. the return on that would be zilch. you also have to realize that if you want any sort of federal funding for your projects, you're going to need to do that complete EIS (environmental review) process on each project, which on its own would take a couple of years with no visible results. even something as simple as intalling passing sidings would require that.
there's no magic here. take a look at the french TGV – last year, they had a profit of 645 million euros. also, for the first time in history, they had a greater market share than air for trips longer than 4 hours. how many years did it take them to get here? twenty five years.
nothing is going to happen overnight. no business is going to go into something that will take 20+ years to actually take off. never mind the fact that the TGV has gets (albeit pretty small) subsidies from the gvmt.
here's another thing to consider. The SNCF's long-distance division (i.e. the TGV and the other long-distance trains) was the only one that turned a profit. all the other divisions, including freight, were in the red.
oh, and compare their population density, in france. 112/sq. km. versus 30/sq. km. for the US.
rail in the us, without huge gvmt subsidies, doesn't stand a chance.

Actually, airlines do pay for the airports' operations. In fact, I believe it's a federal law that an airport may not receive a government operating subsidy - it must cover its operating costs from fees. The government does assist in contruction costs, and also for ATC I believe. How much this subsidy counts, is open to question; for example, if the airlines had to develop their own ATC system, it would be enormously more modern and efficient because they would care about the costs. (And no, they wouldn't cut corners and endanger us - crashing a plane is enormously expensive, if only because a new one costs so much.)

krtaylor wrote:if the airlines had to develop their own ATC system, it would be enormously more modern and efficient because they would care about the costs. (And no, they wouldn't cut corners and endanger us - crashing a plane is enormously expensive, if only because a new one costs so much.)

There are numerous examples - I know of one in Eugene, Oregon - where an airline (or airlines) actually paid of ATC enhancements. In Eugene, Horizon Air paid for the system that allows category III landings (in fog) that would otherwise keep flights in the air, or divert flights to other airports. And airlines have been known to make huge investments to build airport infrastructure - in Portland, United owns the 'E' concourse; Horizon owns the 'A' concourse, and Delta spent a lot of money on the 'D' concourse (during the days Portland was a hub for Asian-bound flights; Delta today occupies just a handful of gates.) Alaska and Horizon spent millions as part of Sea-Tac's recent remodel; and even had a plan to build a new terminal at Boeing Field to counter Southwest's proposal to build a terminal (both were ultimately denied). All of this - without federal dollars.

We've seen from history that just one incident can spell disaster for an entire company and all its employees (PanAm 103, TWA 800). Alaska Airlines came close a few years ago. Although in both PanAm and TWA's incidents, the airline was not (or largely not) to blame, it still affected the airline - PanAm shut down in bankruptcy and TWA declared bankruptcy and was purchased by American Airlines.

Airlines exist today with very little - if any - profit margin, and have little room to manuever when it comes to costs. One can only squeeze so many passengers in an aircraft, and there are numerous competitors out there. Airlines in the U.S. are virtually 100% deregulated - anyone that can prove they can safely fly and maintain their aircraft are free to do so.

That is a stark difference to Amtrak. Fortunately Amtrak has had very few major incidents, and even so I cannot recall one that was Amtrak's fault. However Amtrak still faces huge customer perception issues on a daily basis that cause passengers to say "Never again - Next time I'll take the plane!" no matter what inconvenience they may or may not go through at the airport. It is no wonder passengers refuse to pay more than what they will currently pay to ride the train; yet the existing fares don't even cover the cost of operations unlike air travel - when air travel goes up, airlines make more money (thus new aircraft and better on-board amentities), airports make more money (thus remodeled terminals, new facilities, new parking garages), and ancillary businesses make more money (new motorcoaches for airport shuttle companies, new limos and taxi cabs, new restaurant facilities, new hotels).

also consider this – most people will probably pay just about anything to take an airplane. when faced with paying for a train, people will balk at most fares, even though they are fairly constant.

wigwagfan wrote:...when air travel goes up, airlines make more money (thus new aircraft and better on-board amentities), airports make more money...

Yep. And when air travel goes down, or revenues go down, it tanks, in spite of huge indirect and smaller direct subsidies. As Warren Buffet has supposedly said, (but not refuted) "In terms of shareholder value, the Kitty Hawk should have been shot down immediately" http://www.weforum.org/site/knowledgena ... &topic_id= and also http://www.nationalcorridors.org/df/df03242003.shtml. That may not be an exact quote, but it's close. The industry as a whole has lost money since its inception, "air mail" subsidies, too, not withstanding. And we've discussed the pros and cons of this issue ad nauseum elsewhere in this fourm, so I'll leave it at that for now!

GeorgeF wrote:And when air travel goes down, or revenues go down, it tanks, in spite of huge indirect and smaller direct subsidies. As Warren Buffet has supposedly said, (but not refuted) "In terms of shareholder value, the Kitty Hawk should have been shot down immediately"

Interestingly, that statement, according to the first URL provided, was made back in 2003.

While it is true we have seen the bankruptcies of several airlines - no major airlines have completely shut down, and several airlines are still running quite successfully and profitably.

Just as we have seen in numerous other business sectors, failure to adapt and failure to change can result in failure or near-failure. The introduction and expansion of the "low cost carrier" caught up with a number of airlines. High pension, insurance and benefit costs caught up with those airlines. High fuel costs caught up with airlines that didn't plan in advance as Southwest did. A failure to review and change route maps caught up with some airlines that focused on lots of flights everywhere with big planes, versus managing by load factor (which requires the right number of flights with the right aircraft).

The airline industry might be in a big state of change, but it certainly has not failed nor is on the brink of collapse. And to suggest that Warren Buffet believes that the air industry has no shareholder value, one need only look at his list of subsidiary companies - including this one.

wigwagfan wrote:The airline industry might be in a big state of change, but it certainly has not failed nor is on the brink of collapse. And to suggest that Warren Buffet believes that the air industry has no shareholder value, one need only look at his list of subsidiary companies - including this one.

Oops! My apologies – I didn't mean to imply that every entity or even every airline in the industry has no shareholder value; just that the airlines as a whole have lost money since their inception. (NetJets isn't an airline.) In regards to the subsidies issue, just this week Aviation Week & Space Technology writes that United Airlines is getting $5.25 million in tax increment financing; the IL Commerce and Economic Opportunity Dept is issuing $1.35 million in grants; and the city and state are proposing to cap fuel taxes for five years. (AW&ST, July 24, 2006, p. 16). This is tiny, of course, but it's one of the many parts of the very large airline subsidy gravy train! Wonder if Chicago will pay for Amtrak to move its HQ from DC to 77 W. Wacker Drive (where United's corporate HQ is moving to – from Elk Grove).

jfrey40535 wrote:The Northeast, mainly NJ, subsidizes states like Montana and their rail service. If market conditions are not condusive to rail service for Montana, that should be the first service to go.

While I'm in favor of keeping the Empire Builder, none the less, in support of the argument that New Jersey subsidizes Montana, take a look at this: http://www.taxfoundation.org/files/ftsbs-20060316.pdf! Just look at which states get subsidized, too. Hmmm...

wow, amazing, new jersey is actually in last place. doesn't it feel good to get exactly HALF of what we give to feds in return?
ah what a great country, the usa.