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  • Discussion related to Amtrak also known as the National Railroad Passenger Corp.
Discussion related to Amtrak also known as the National Railroad Passenger Corp.

Moderators: GirlOnTheTrain, mtuandrew, Tadman

 #1528064  by SouthernRailway
 
Prestige class is a service that is sold to customers who are not particularly price-sensitive. Anyone who's paying a few thousand dollars for a land cruise (where there are few if any competitors) could surely pay more. This isn't like the Northeast Corridor or even coach class on Amtrak long-distance trains, where there are multiple competitors at varying price levels, and thus price elasticity.

I figure, based on that market description, that Prestige makes money.

If Via management hasn't figured out how to make money in that situation, Via management needs to have their head examined and they need to be fired.
 #1528068  by Arlington
 
exvalley wrote: Fri Dec 13, 2019 12:49 pm Ridership itself went down. A decrease in ridership leads to an increase in per-passenger losses due to fixed costs.
Why did ridership fall? Only OTP? Or price-fatigue, market saturation, and not enough lifetimes-worth of once-in-a-lifetime trip makers?
exvalley wrote: Fri Dec 13, 2019 1:34 pm One thing seems fairly certain: Prestige Class is the most profitable component of the Canadian.
"profitable" in the sense of "least lossy" Problem for Amtrak is that lossy, or even breakeven, or even mildly profitable Prestige is hard to model as a win for the LDs. Anderson believes it is possible, so I will too.

But that the Canadian is a model seems hard both in itself and also with the possibility that the Canadian has already maxed out the cruise-through-the-Rockies market and there aren't enough super-premium passengers to support what'd represent probably a doubling or tripling of the available bed miles of an Amtrak version.
 #1528071  by ryanch
 
The report as quoted didn't say Prestige ridership declined. And as a businessman, I find your theory that "no subsidy" means breakeven very dubious. You think they exactly civered costs with nothing left over? It seems like you're straining hard to score rhetorical points rather thaan grappling with the likelihood that Prestige made a small profit.

Which doesn't therefore justify a new Amtrak service. Small profits are evanescent. But it seems pretty clear that Prestige has at times, including the year ci5ed, more than pulled its weight.
 #1528079  by exvalley
 
Arlington wrote: Fri Dec 13, 2019 1:58 pm
exvalley wrote: Fri Dec 13, 2019 12:49 pm Ridership itself went down. A decrease in ridership leads to an increase in per-passenger losses due to fixed costs.
Why did ridership fall? Only OTP? Or price-fatigue, market saturation, and not enough lifetimes-worth of once-in-a-lifetime trip makers?
Apparently you did not read the report. VIA attributed the loss in ridership to cuts in frequency and on-time performance. The statement that ridership fell applied to the whole train, not just Prestige Class. There is no indication one way or the other as to Prestige Class.
 #1528080  by exvalley
 
ryanch wrote: Fri Dec 13, 2019 2:10 pm The report as quoted didn't say Prestige ridership declined. And as a businessman, I find your theory that "no subsidy" means breakeven very dubious. You think they exactly civered costs with nothing left over? It seems like you're straining hard to score rhetorical points rather than grappling with the likelihood that Prestige made a small profit.
My thought exactly. I suppose it is possible that Prestige Class, while not needing any subsidies, broke even to the very penny without turning a profit. It's also possible that Martians will announce their presence today.

As I said earlier, what really matters is that VIA clearly sees Prestige Class as a benefit to the operation of the Canadian. I trust their expertise.
 #1528081  by exvalley
 
SouthernRailway wrote: Fri Dec 13, 2019 1:06 pm Prestige class is a service that is sold to customers who are not particularly price-sensitive. Anyone who's paying a few thousand dollars for a land cruise (where there are few if any competitors) could surely pay more.
"Could" and "would" are two very different things.
 #1528091  by Arlington
 
VIA has used a lot of enthusiastic words to praise themselves and describe their Prestige service. It seems to me that if they could have used the word "profitable" they would have.

I also I think it quite possible that they would have spent the increased passenger fares basically dollar-for-dollar on increased amenities: if "not subsided" is all they needed or wanted.

Meanwhile they also have a lot of not-enthusiastic concepts that they are embedding in these larger stories, involving reduced frequencies, reduced ridership, and increased losses per passenger.
 #1528093  by mtuandrew
 
I wonder if Canadian ridership also dropped upon moving to the more northerly, less populous CN route as opposed to the CP route along the Lake Superior shore and the southern tiers of Manitoba, Alberta and British Columbia. The original Canadian route has proven to be profitable from Calgary to Vancouver at least (otherwise Rocky Mountaineer wouldn’t exist) and arguably a better and more profitable route segment than Edmonton-Vancouver.

Some American routes match that kind of scenery, like SFO-LAX and DEN-SLC. They sound like prime candidates for public-private partnerships; Amtrak Superliners in front featuring better flexible dining (but open to all passengers thank you very much), and Rocky Mountaineer or Xanterra-operated domes and sleepers to the rear. Amtrak gets a fixed fee per train and also gets to deemphasize their first-class service, the private operator gets to market their land cruise biweekly, and everyone goes home happy.
 #1528309  by exvalley
 
SouthernRailway wrote: Sun Dec 15, 2019 7:20 pm Amtrak is the equivalent of Apple, by comparison to Via. Amtrak is much more modern and in much better financial shape.
Perhaps a better analogy would be Commodore to Tandy. Or perhaps a Timex Sinclair.
 #1528352  by jonnhrr
 
Probably an unfair comparison in that VIA has nothing like Amtrak's NEC to help cover the inevitable LD losses. VIA is basically a few LD trains and some short distance routes around Toronto, plus the subsidized routes to places like Churchill maintained due to the lack of any alternative ground transportation options in those areas. Even Toronto - Montreal is not really comparable to an NEC like corridor, more like Chicago - Detroit as an analogy.
 #1528354  by exvalley
 
jonnhrr wrote: Mon Dec 16, 2019 3:00 pm Probably an unfair comparison in that VIA has nothing like Amtrak's NEC to help cover the inevitable LD losses. VIA is basically a few LD trains and some short distance routes around Toronto, plus the subsidized routes to places like Churchill maintained due to the lack of any alternative ground transportation options in those areas. Even Toronto - Montreal is not really comparable to an NEC like corridor, more like Chicago - Detroit as an analogy.
The population of Canada is roughly 1/10th the population of the United States. Canada will never be able to replicate the population of the Northeast Corridor on its Toronto-Montreal-Quebec corridor.

That said, the concepts are the same even if the scale isn't. Canada has a densely populated corridor with frequent rail service and ... well... everything else.

The bigger difference, in my opinion, is that Canada has much less opportunity for additional corridor routes compared to the United States. There are a couple that come to mind, but not nearly as many. Some examples are: (1) Edmonton to Calgary; and (2) Halifax to St. John.