Passenger Trains > David Gunn: "VIA Rail Dying"

VIA Rail 'dying,' says former railway executive
Byline: Cole Hobson
Publication: Miramichi Leader
Wednesday September 18th, 2013

> MONCTON - With the release of another quarterly report that shows
> VIA Rail has experienced decreasing ridership revenues as well as
> increased operating costs, a former president of Amtrak with over 40
> years of experience in the North American railroad and
> transportation industry is straight to the point when asked about the
> company's future. "My sense of what's happening to VIA is it's dying,
> to be blunt"' said David Gunn, who served as president of the
> American railway company Amtrak from 2002 to 2005 and before that
> worked a variety of jobs in the industry in cities such as Boston,
> New York, Philadelphia and Toronto.
>
> "I don't think they have any focus at all. There's no question that
> the extent they try to do anything, at this point they are focusing
> on Toronto to Montreal, but what have they done?...They've never
> focused on any service and made it a really important part of the
> transportation scene and I think that's a terrible mistake.
>
> "VIA has basically been going out of business. All of the actions
> from VIA have been basically reducing service since it was set up."
> Gunn, who lives in Cape Breton, N.S., said the situation is much
> different in the United States, where Amtrak has had its challenges,
> but is a thriving transportation company. 'Amtrak had been
> struggling in the U.S., but it had a lot of support congressionally
> and it's actually prospered, amazingly enough,' he said. 'Ridership
> is setting new records every year, they have been able to build a
> northeast corridor into a respectable operation, it's high speed and
> it's actually a very good operation.'
>
> VIA Rail's second-quarter results showed revenues decreasing by 2.8
> per cent, totalling $66.2 million for the quarter. Meanwhile,
> operating expenses before corporate taxes and amortization of
> deferred capital funding increased by 8.6 per cent, amounting to
> $154 million for the quarter. Operating funding from Government of
> Canada increased in the quarter by 11 per cent, to $79.9 million.
>
> The results over the six-month period ending June 30, 2013 also saw
> revenues decrease (2.8 per cent, to $125.2 million), while operating
> expenses increased (2.7 per cent, to $301.9 million) and government
> funding increased by 7.7 per cent, to $163.2 million for the period.
> Gunn said VIA Rail is also struggling with deteriorating railways
> around the country and said Amtrak has been able to thrive south of
> the border in part because of the support it is shown by government.
>
> 'It's different (in Canada) than the U.S. and if the government
> doesn't push it as a Crown corporation, it doesn't happen. Whereas
> in the U.S. Amtrak sort of developed a mindset of its own and it
> used its supporting Congress to move forward,' he said. 'There's a
> lot of problems with Amtrak, don't get me wrong. I'm just saying they
> are in much better shape than VIA, because let's face it, the VIA
> management is totally controlled by the minister. Even though in
> question period they always say it's a Crown corporation, the reality
> is that they are totally beholden to the Department of
> Transportation, of that ministry.'
>
> The quarterly report showed a four per cent increase in passenger
> miles (total number of miles travelled by all passengers) and a 0.7
> per cent increase in ridership, despite the lower passenger
> revenues. Operating expenses saw a rise of 13 per cent, an increase
> of $9 million, excluding employee benefits. According to VIA Rail,
> the increase was due primarily to higher depreciation costs related
> to the completion of major elements of the capital investment
> program completed last year and the increase was largely offset by
> the amortization of deferred capital funding.
>
> 'If you just look at the tone of what they do, it's all negative,
> then they'll say it's positive. For example, when they cut back the
> Ocean (from six times weekly to three times), they made these public
> statements they were going to co-ordinate rail with the bus - well,
> the trains were always co-ordinated with the bus until VIA ran into
> the slowdowns because of track conditions on the line up through
> Newcastle and Bathurst and that broke the connection,' Gunn said.
> 'Via has this incredible ability to issue press releases with bands
> playing and flags flying, as they retreat. I always marvel at it.'
>
> In order to turn the tide and fortunes at VIA, Gunn said first they
> would need more support from the government of the day in order to
> make it a significant player. He said rail travel in the States has
> been pushed as a less expensive option as compared to building new
> roads and highways - to take congestion away from busy
> thoroughfares.
>
> In the press release accompanying the report, president and CEO of
> VIA Rail Marc Lalibert said during the second quarter of 2013, 'we
> continued our efforts to develop a train culture in Canada.' 'Our
> promotional strategies have been making the train more and more
> appealing for travel within Canada, and have stimulated a growth in
> ridership, especially within the Quebec City-Windsor corridor.
> However, our market remains price sensitive,' he said.
>
> Gunn said it's humorous to hear a VIA Rail executive talk about
> creating a train culture in Canada.
>
> "I don't know what he's talking about, creating a train culture. Via
> is almost irrelevant, except to rail fans. It really is," he said.
> Greg Gormick, a Toronto-based independent transportation consultant,
> also balked at the assumption of a train culture being built in
> Canada. "I don't know too many countries that develop a train
> culture by cutting the number of trains and closing stations," he
> said. "It's a bust."
>
> Mylene Belanger, a spokeswoman for VIA Rail, said in terms of
> Atlantic Canada train culture, the company has 'made important
> investments on (the Ocean) service and promotions are often offered
> all-year round.' She noted that as of June 15, the Ocean has been
> equipped with the same Wi-Fi available to passengers on the Quebec
> City-Windsor corridor. "Available across more than 98 per cent of
> the route between Montreal and Halifax, the new Wi-Fi connection
> allows passengers to remain virtually linked to work, friends and
> family throughout the trip. We are offering our passengers new
> technological and attractive services, which add to their
> experience," she wrote in an email. "We also continue to promote our
> longhauls services: every year, hundreds of thousands are invested to
> advertise the Ocean and the Canadian."
>
> Gunn said VIA Rail does do some things right, such as their
> top-notch on-board service, but he said the bad has outweighed the
> good. "It all goes to the overall strategy of what they are trying to
> do with passenger rail service. If Marc Lalibert said he's trying to
> build a train culture in the country, you don't do that by cutting
> back trains,' he said. 'The fact of the matter is I think is the
> budget is being cut and they don't have a lot of options left.'
>
> The report also detailed figures on specific trains that VIA
> operates, such as the Ocean, which serves Atlantic Canada three
> times a week - down from a previous service level of six times a
> week. In the second quarter, revenues on the Ocean decreased by 40.6
> per cent, due to lower ridership (37.4 per cent less passenger-miles)
> resulting from the frequency adjustments combined with lower yields
> (revenue per passenger mile) of 5.1 per cent.
>
> In the six-month period ending June 30, Ocean revenues dropped 43.5
> per cent, with 40.1 per cent less passenger miles and 5.7 per cent
> less yield.
>
> 'Now the interesting part of the Ocean is that keep in mind they cut
> 50 per cent of the service, but they only lost 40 per cent of the
> ridership,' Gormick said. 'So as I've often said, the problem with
> Canadians is you can do the worst to the passenger trains and they
> still won't go away. This not only proves to government that people
> want the trains, they will support them.
>
> VIA and the government use this use it or lose it argument - if you
> don't provide the service, how can you use it? Belanger noted that
> the adjustments in frequency on the Ocean were made to better
> reflect customer demand, which was 'necessary to allow VIA Rail to
> focus resources on improving service and attract more customers on
> routes where demand is strong and growing.' She noted that despite
> frequency reductions of 50 per cent, cars were added to some of the
> remaining frequencies, which resulted in a reduction of overall
> available capacity by only 36 per cent. She said direct operating
> costs were reduced by 50 per cent as a result of the cuts.
>
> Gormick remains at work writing a report to look at the implications
> of the Canadian National Railway's plan to abandon the track between
> Moncton and New Brunswick's north shore, VIA Rail's reduced
> frequency of the Ocean passenger service and the collapse of
> Industrial Rail Services. It was funded at a total cost of $13,000,
> including $5,000 from the City of Moncton, $2,000 from the City of
> Dieppe, and $1,500 each from the Town of Riverview, the City of
> Miramichi, the City of Bathurst, and Enterprise Greater Moncton.
> Gormick said he's in the last stage of completing the report and
> hopes to have a draft of it in the hands of the interested parties by
> the third week of September.
>
> There's no easy solution to turning around VIA Rail to become a more
> prominent player in Canada's transportation industry, and while
> Gormick's report will offer a number of suggestions, one easy and
> cost-effective idea he has is to install Gunn into the company's
> board of directors.
>
> Gunn said he appreciates Gormick's vote of confidence but he doesn't
> believe one extra voice speaking out on the board would create a big
> impact.
>
> In his tenure with Amtrak, Gunn said he had many dealings with VIA
> and he believes there are bigger underlying issues. "I met the VIA
> people, the culture in that company - aside from the good passenger
> service stuff, which I give them very high marks on, the on-board
> service stuff - the culture in terms of the business strategy, it's
> horrendous, it's awful. I couldn't believe it," he said.
>
> "They've got some really tough sledding ahead, but they are not
> making it any easier on themselves."

Source (subscription only):

http://www.fpinfomart.ca/cnw/cnw_transaction.php?key=mv|1234954280|nbml|20130918|178129796

Via. the next Mexico.

Sad to hear!

True enough---I think it's the current right-of-centre Canadian government's aim to depopulate Canada's rural districts by reducing all public services and take the money to subsidize the majority urban voters, in much the same way that the US Congress shelter's the NEC at the expense of the western trains. I know VIA's PR folks and I think they are simply trying to put a good face on a situation that no one likes. In that way they are doing their jobs--eh?

Glad I rode it when I did... sounds like they're nailing the coffin lid shut on it in the Great White North. Ol' David Gunn sure speaks his mind, too.



Edited 1 time(s). Last edit at 09/19/13 03:25 by IC_2024.

He's a little rough! Gunn is definitely a straight shooter though.

mp51w Wrote:
-------------------------------------------------------
> He's a little rough! Gunn is definitely a
> straight shooter though.

+1

He rattled a few folks in Congress and the employee unions over the years, in a number of roles

VIA corridor service is far superior to Amtraks. Better crews, smoother track, and cars with windows actually large enough to see out of. That said, there is virtually no service in the rest of the country. Anything less than daily makes using the train for anything other than a joy ride pointless. I used to use the Canadian every year to see a Wings game in Vancouver. But as nice as Vancouver is, I don't want to sit around for days after the game waiting for the next departure. Glad I got to ride all VIA's mileage (except to Lynn Lake) before the cuts.

Assuming VIA wants to run the OCEAN for a few more years, the act of discontinuing service to Gaspe ties in quite nicely with an eventual shift of the train, presently operating on the former Intercolonial Route (via Matapedia), to the ex-NTR route (via Edmunston).

The Intercolonial Route is lightly used and the track quality is deteriorating, similar to the situation involving the SOUTHWEST CHIEF's route between Lamy, NM and La Junta, CO.

We'll probably see a VIA train in Gaspe again at about the same time we'll see their Budd car running from Victoria to Courtenay.

They should get some sort of corridor service running between Calgary and Edmonton, if for no other reason than to show that they're interested in doing something positive outside of the provinces of Ontario and Quebec.

Gunn did a lot of unnecessary damage at Amtrak with the Three Rivers/Pennsylvanian fiasco, slashing consists, even on the NEC (Regional were down to 5 and 6 cars), but he is right about VIA: the cuts to the Corridor west of Toronto and to the Ocean cut of 50% were totally uncalled for. You don't cut frequencies in half to install WiFi. It's like that stupid mayor of Chicago spending $50 Million on Wifi for the beaches while slashing 2,000 cops and 2,000 teachers.

< They should get some sort of corridor service running between Calgary and Edmonton, if for no other reason than to show that they're interested in doing something positive outside of the provinces of Ontario and Quebec.>

They won't run anything north and west of the Corridor if there is a bus. Bi-weekly is the norm, tri-weekly a luxury. They should have stepped in with a North Bay train when the ONR came off, or at least run a dedicated feeder bus between Sudbury Jct and North Bay. They don't care.



Edited 3 time(s). Last edit at 09/19/13 04:33 by joemvcnj.

joemvcnj Wrote:
> They don't care.

Via is simply marching to the orders of the Government in Ottawa. They're the ones who don't care, and that has been the case since the minute they became a majority government.

Ray

Is it true that if you cut service, your revenues will decline? Wow, I never learned that in business school.

While Amtrak may be in better shape than VIA, Amtrak hasn't done itself any favors by cutting service either. Over the years, there continues to be a decline in available options if you want to travel any distance on Amtrak. Similiar paths, but Amtrak has a bigger country and network to whittle away.

< Via is simply marching to the orders of the Government in Ottawa. T>

OK, but little things that don't cost much like not printing timetables, colorful brochures, un-naming all the trains - did Harper specifcially tell them to do that ? I think they have a bunch of little clueless MBA's running around who don't know their business, just "metrics", "focus groups", and other nonsense..

< She noted that despite frequency reductions of 50 per cent, cars were added to some of the remaining frequencies, which resulted in a reduction of overall available capacity by only 36 per cent. She said direct operating costs were reduced by 50 per cent as a result of the cuts.>

- Obviously the majority of business on the 3 missing days is gone.
-"Direct operating costs" does not account for fixed costs (stations, yards, facilities), which remain constant
- says nothing of poorer equipment utilization: 2 train sets rather than 3 (67%) providing only 50% of the service.
- Since the REN cars are in 5 car sets, I hardly think consists grew 50%. When the Chaleur cars disappear, they will really see the effects, to the extent they credited local Montreal - Matapedia business to the Ocean handled in Chaleur cars.

They can cut down to once a week, retain slightly more than 33% of the business, and they'll call that a success too.

St John was a heavily used stop on the Atlantic. Why not ever set up a dedicated feeder bus to Moncton ?

A lot of Amtrakian Disease up north too.

Don't wait for rail service between Calgary and Edmonton any time soon--that's PM Harper's home turf--eh?

Sad to say but I have to agree with Gunn. The Harper government has zero interest in passenger trains and Via seems to be just going through the motions. Even their pride and joy Montreal - Toronto corridor is not all that impressive when you consider it serves the two largest cities in Canada. I believe there are fewer direct runs on this route than 25 or 30 years back.

andersonb109 Wrote:
-------------------------------------------------------
> VIA corridor service is far superior to Amtraks.
> Better crews, smoother track, and cars with
> windows actually large enough to see out of.

Compared to VIA's Corridor frequency, New York to Washington is almost like subway frequency, and if you want large windows just ride the Acelas. It takes quite a stretch of imagination to claim that VIA's corridor service is "far superior" to Amtrak's NEC service. but each to his or her own I suppose. :) Yes, if Amtrak trains on NEC poked along at VIA speeds they'd feel smoother too. :) That is not to say that things should not be improved on the NEC mind you....

I think he was thinking of Chicago corridors, farer compaison.

Yes. Detroit to Chicago in particular. LRC's are far superior to anything operating here in Michigan or on the NEC including Acela which I have ridden. VIA Business Class is FAR superior to Amtrak's Business Class. Better food, more leg room and yes, bigger windows.

andersonb109 Wrote:
-------------------------------------------------------
> Yes. Detroit to Chicago in particular. LRC's are
> far superior to anything operating here in
> Michigan or on the NEC including Acela which I
> have ridden. VIA Business Class is FAR superior to
> Amtrak's Business Class. Better food, more leg
> room and yes, bigger windows.

As I said, each is entitled to his or her own opinion. :)