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kitesandtrainsandcats
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25 Nov 2020, 4:02 am

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November 23, 2020 High Performance, Intercity, News, Passenger

Defining Amtrak’s True Mission
Written by Tony Coscia, Chairman, Amtrak Board of Directors

https://www.railwayage.com/passenger/in ... e-mission/

Quote:
“Let me start with the notion of making Amtrak “profitable.” Profitability is not Amtrak’s mission. Our mission, as defined by Congress, is “to provide efficient and effective intercity passenger rail mobility consisting of high-quality service that is trip-time competitive with other intercity travel options.” As our governing statute has recognized since the 1970s, Amtrak will never generate enough revenue to be profitable from an accounting perspective, i.e., to fully fund its operating and capital needs.

Mobility is not a moneymaker if you have to pay for 100% of the cost of getting from point A to point B. No mode of passenger transportation fully pays for itself. Airline tickets, the cost of driving, and commuter train and bus fares would all be prohibitively expensive if users had to fund all costs associated them. Even our roads and interstates, which road advocates used to love saying were “user funded,” require billions in subsidies each year, with the feds now providing more than $157 billion in general revenue subsidies for the insolvent Highway Trust Fund since 2008. And, of course, airlines don’t build airports, and government at various levels provides substantial subsidies to transit systems. The costs of intercity passenger rail just happen to mostly run through Amtrak, and as a result the full expense of our mode is easier to see. Given this, Amtrak funding has always been a target by critics and competitors that like to forget the subsidization that occurs across all modes.

Facing such an environment, Amtrak has had to try to make the best possible use of its limited resources in order to advance vital capital projects and make a case for greater investment to support our mission. As long-term observers of our business, many of you know that Amtrak has never been provided the necessary public investments we’ve needed to truly serve our nation and thrive. We’ve always been forced to prioritize keeping the railroad running over making improvements, expanding the network and modernizing our services. When you hear us talk about improving the economics of our services and our company, it is not because we are trying to “turn a profit,” but rather because we must try to stretch our woefully limited funding further, so we can keep our trains running safely and address urgent investment needs.”


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kitesandtrainsandcats
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25 Nov 2020, 4:05 am

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Amtrak reported today preliminary results for fiscal year 2020 (October 2019-September 2020), including an operating loss of $801.1 million due to the pandemic. Operating revenues were $2.3 billion, a decrease of 31.9% over FY 2019. It also reported advancing $1.9 billion in infrastructure and fleet work.

Amtrak provided 16.8 million customer trips in FY 2020, down 47.4% with a year-over-year decline of 15.2 million riders, due to “pandemic-related travel demand reductions.” Acela ridership was down 52.5%. (For more details, see chart below.)


https://www.railwayage.com/passenger/hi ... 2020-data/


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25 Nov 2020, 6:44 am

It is the same in Britain and many other countries. Transport systems of any type are costly. Here in the UK (And I imagine that it is the same for other countries), it is the freight industry that pays its way for the passenger industry to survive.
One can see how in the early years of motoring, only the richer classes could afford to own and drive a car, and it is only through the mass collective use our roads get that it becomes affordable. We used to pay car tax that would directly fund our road system, but when the EU took control it became "Pollution tax" but it was not really a fair system as one could have a car which has hardly any polution at all, but because the vehicle has been logged at a certain amount when they were manufactured and that figure is "Set" into the taxable amount one pays, one gets no discount. (I had a Volvo T5 which was around 15 years old and had 200,000 miles on the clock and I took it for its annual MOT (A strict safety test it has to pass every year) and the garage mechanic kept asking me if I had changed the engine and what I had done to it etc. I had not done a thing to it. Origional engine. I was puzzled. He said it was barely reading on his equipment and the highest reading he had was 0.0005 with the emissions. He said not even small brand new city cars read that low. But as it was over 2000cc I had to pay the full whack as if it was a highly polluting car which shows how unfair the "Pollution" tax system is. To add insult to injury, electric cars have no tax to pay, yet an ordiary car powered by petrol or diesel emmits over 82% of its polution in its lifetime during the manufacturing stage, and electric cars are 10 times more polluting to manufacture. The system does not relate to pollution at all).
But going back to costs.
Some passenger railway systems do and can make profits. Trains in and out of London and other big cities in the world have sufficient passenger numbers to turn a profit. Think of a freight train. Most freight trains now are "Block worked" which means the freight they carry is one type and one has many wagons the same in the train formation. Here in the UK they used to be many different wagons and vans in a train where they had to shunt them in huge marshalling yards, and they had from the early years worked out a "Common carrier system" which if possible, meant that if you were a business owning a small fleet of wagons, and one sent ones goods to their destination, on the return journey someone else would put their goods in which were going your way for the way back to save costs and you would be able to do tis as well to boost your carrying capacity.
But even with the common carrier systems, it was very labour intensive so block working was found to be a more cost efficient way as one avoids the need and the dangers of shunting wagons back ad fore in marshalling yards.
But if you think of block worked freight, one is only carryingones goods at 50% capacity as the return trips they run empty.
Now consider passenger trains. During its daily journey, as only the peak times that go in and out of populated areas the train will be running full, most of the time the train runs at 10 to 20% of its carrying capacity if that. For example, evening trains will be relitively quiet and early morning trains will scarcely have a passenger in the one direction. Some trains which I worked would run completely empty until around the 0700am (Or just before) commuters came on to go to work. Once one hit the commuter timss, the trains suddenly became busy, but as passenger trains have to be run throughout the day with the early afternoon lull when the numbers go right down and the early mornings and evenings where the one evening a week that attracts the drunks to go out partying... Getting money out of some of those guys and gals is almost impossible, as I have had whole trains with passengers so drunk they do not know what a ticket is let alone where "Home" is!... So trying to make money to keep the passenger trains on the rails is difficult, and in the rural and semi rural areas is not possible.

So we do what British Railways did when our government took control in 1948 and start to cut all non profitable lines. The problem is that the skeleton remains of what should be profitable lines have lost half their traffic, as they were being fed by the less profitable routes one has now severed.
Fair play to te then governments of their day. For a while during the early to mid 1980's the railways actually started to make a profit which they had not done since the late 1920's, but then came privitization which hit around the early 1990's which had to be done due to the IMF ruling as the UK had borrowed money from the IMF after WW2 to get Britain back on its feet, and had to comply with conditionality clauses that previous governments had signed and privatization of governmental assets were amongst these clauses.
So whether the railways is in private hands via governmental subsities, or in governmental hands is irrelevent. The issues are that ANY transportation system is costly, but neccessary as without it ones country does not thrive.


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