Passenger Trains > "Amtrak moves closer to break-even point during fiscal year"

"Amtrak moves closer to break-even point during fiscal year"
By Delaware Business Now - November 21, 2017

http://delawarebusinessnow.com/2017/11/amtrak-moves-closer-break-even-point-fiscal-year/

"....Amtrak posted record ridership and earnings results for the fiscal year, ending Sept. 30.

The government-owned passenger railroad posted revenue of $3.2 billion and cut its operating loss 15 percent to $194 million. Ridership rose 1.5 percent from the previous year, with a one percent gain on the Northeast Corridor, which includes stations in Wilmington and Newark.

Amtrak, which has extensive operations in Delaware that at last report employ nearly 1,200, reported it recovered 94.7 percent of its operating costs.

“Amtrak had a record-breaking year in 2017. To our customers and partners, we thank you for your business. To our employees, we commend you on your dedication and service,” said Amtrak Co-CEO Wick Moorman. “More and more people are choosing rail travel and for good reason. Amtrak offers a more comfortable and convenient travel experience with great amenities such as free Wi-Fi on most trains, plenty of leg room, and no middle seat........”

Good Amtrak news?  Oh, this is NOT the kind of posting that will win you many friends here!
SR

94.7% of operating costs seems like a good number.

What's included?

Posted from Android

BoilingMan Wrote:
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> Good Amtrak news?  Oh, this is NOT the kind of
> posting that will win you many friends here!
> SR

It is Amtrak's "Good Amtrak News" directly from MediaRelations@Amtrak.com.
https://media.amtrak.com/2017/11/amtrak-sets-ridership-revenue-and-earnings-records/

Lackawanna484 Wrote:
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> 94.7% of operating costs seems like a good
> number.
>
> What's included?

I guess Amtrak does not need a subsidy much longer.

Just kidding. I am not anti-Amtrak and am I not against funding them at a reasonable level, but I think putting out fake numbers like that does not serve them well.

My understanding is that all equipment costs including maintenance are counted in capital costs. If someone can correct me, please do.

They are not fake numbers, but they are not based on Fully Allocated Cost. THAT is the fake number.
When mass transit systems state their farebox recovery, it means direct operating costs.

joemvcnj Wrote:
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> They are not fake numbers, but they are not based
> on Fully Allocated Cost. THAT is the fake number.

I am not talking about fully allocated costs. Amtrak is tweaking what normally counts as operating cost.

> When mass transit systems state their farebox
> recovery, it means direct operating costs.

Yes, including maintenance of equipment.

Amtrak farebox recovery is not equivalent to the typical transit farebox recovery.

For what it is worth, my opinion is that such manipulation does not help its cause. I am sure others view this issue differently.

The revenue number includes state contributions to train operations. I believe the original Lynchburg train was given a VA subsidy of $29 per rider, with an agreed on fare of $29 more. Over time, the subsidy has reduced to $11 (?) as passenger count increases. I would expect Roanoke has a similar subsidy to develop ridership.

I agree Amtrak doesn't help its cause when it throws out something like "break-even" and then squeals like a stuck pig when anti-rail folks try to whittle down the direct federal contribution.

The key word - "operating" cost.

"Amtrak recovered 94.7% of its operating costs."

Capital costs - buying/overhauling equipment, maintaining the NEC infrastructure and other Amtrak owned track/station infrastructure etc. - are not fully calculated as part of this ratio. However, the operating costs DO include payment to freight railroads for access rights. Hence the overall conundrum of Amtrak.

NEC - Takes a LOT of money to maintain the infrastructure of the NEC, which is a capital cost. The NEC infrastructure costs are NOT fully allocated to trains operating over the NEC tracks, which often makes trains like the Acela Express look like they don't lose as much money.

vs.

Long Distance Trains and most Non-NEC trains - Their operating costs to operate over freight railroads (e.g. essentially like paying rent) is an automatic hit against the revenue they generate.

So Amtrak needs Capital and Operating money from the government.....

I don’t know that anyone has ever come up with an honest index that compares the taxpayer’s cost of rail, air, and land costs per passenger per mile. I imagine it isn’t cheap and certainly isn’t free.
I think maybe the one real attempt was done when Reagan went after Amtrak in the mid 80’s- and the result cast a pretty good light on Amtrak (I seem to recall it was slightly less than Air) so he backed off.
SR

Does anyone know the historical figures of farebox recovery against operating costs for, say, the last 10 years or so? 94.7% sounds great but what is the trend over the last decade?

trainjunkie Wrote:
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> Does anyone know the historical figures of farebox
> recovery against operating costs for, say, the
> last 10 years or so? 94.7% sounds great but what
> is the trend over the last decade?

That is a reasonable question, and if I remember correctly it has been a strong improvement. If Amtrak has kept how it has been measuring the ratio the same for the past few years, it is definitely a good trend.

With the risk of making myself seem liked a warped record, I am posting a link to a pretty good thread from around seven years ago:

https://www.trainorders.com/discussion/read.php?4,2183214,2185204#msg-2185204

With the ratio back in the 75% vicinity back then, if Amtrak has not fooled around with how it calculates the ratio, I would say its operating results have improved significantly. (I still think the ratio is misleading when Amtrak asks for megabucks).



Edited 1 time(s). Last edit at 11/22/17 16:30 by ts1457.

ts1457 Wrote:
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> trainjunkie Wrote:
> --------------------------------------------------
> -----
> > Does anyone know the historical figures of
> farebox
> > recovery against operating costs for, say, the
> > last 10 years or so? 94.7% sounds great but
> what
> > is the trend over the last decade?
>
> That is a reasonable question, and if I remember
> correctly it has been a strong improvement. If
> Amtrak has kept how it has been measuring the
> ratio the same for the past few years, it is
> definitely a good trend.

Good point. While one might argue about the validity of the statistics, i.e., how/what costs are allocated, it seems that if the same metric is used each year, one ends up with a reliable figure, one that can be useful in making comparisons.

By way of analogy, one might argue about the validity of a test (Does it measure what it purports to measure?), but that is a separate issue from its reliability (Does it measure the same thing consistently?)

One big thing affecting the 94.7% number is that Amtrak is now getting a LOT more money to operate the State trains than what it had in the past. Also, consider the mix of trains. Amtrak's operating a much leaner system map than what it had from event the early 1990s! Moreover, the Montrealer is now essentially a day train supported by Vermont. The Lake Country Limited and Kentucky Cardinal are off the map. These variables have some effect on the number.

The number has definitely been trending upwards. I believe it was around 80% or so towards the end of Claytor's term.

There have been some shifts as to what Amtrak is classifying as "operating" vs "capital" costs too.

todays denver post said the CZ was down 2k riders and also down the SW Chief by 2k; bright spots include the ski train and colo continues to study a fort collins trinidad train

jp1822 Wrote:
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> One big thing affecting the 94.7% number is that
> Amtrak is now getting a LOT more money to operate
> the State trains than what it had in the past.
> Also, consider the mix of trains. Amtrak's
> operating a much leaner system map than what it
> had from event the early 1990s! Moreover, the
> Montrealer is now essentially a day train
> supported by Vermont. The Lake Country Limited and
> Kentucky Cardinal are off the map. These variables
> have some effect on the number.
>
> The number has definitely been trending upwards. I
> believe it was around 80% or so towards the end of
> Claytor's term.
>
> There have been some shifts as to what Amtrak is
> classifying as "operating" vs "capital" costs too.

My guess (maybe someone can tell by looking at the numbers) is that much of the improvement has been on the revenue side by better demand pricing. A decade or so you would have some TO members boast about upgrading to sleeper on the train for a few bucks. Amtrak is not giving away space anymore. It is doing a decent job now of maximizing the revenue from available capacity.