Passenger Trains > A Serious Discussion

Put away the popcorn and let's see if we can we have a rational discussion.  

Question:  What if the NEC were spun off to Delta Airlines (or any of the other large airlines)?  For the NEC I can see possible advantages: (1) being managed by a company experienced in high volume passenger transportation, (2) access to Delta's reservations system, (3) link to Delta's catering network, (4) possible incorporation into Delta's mail and express business, (5) access to Delta's training programs for people like gate agents and customer service people, and even customer-facing aspects of flight attendant training, (6) operation under a financial accounting system that I suspect may be more accurate than Amtrak's.  I'm not suggesting trying to merge the two operations -- this isn't Europe where intercity rail is often right inside the airport -- but rather to take advantage of the synergies available from Delta's systems.  Don't think of this discussion as involving a railroad and an airline but rather a discussion of two passenger transportation companies, for at the end of the day the vast majority of people that travel this corridor every day are only interested in convenience, comfort and price and couldn't care less about mode.

For the rest of Amtrak the 800 lb. gorilla would have left the room and management would be free of the distraction and able to focus (hopefully) on an integrated LD/Regional network that makes sense.  It would also eliminate any budget/accounting murkiness that currently exists since each entity would have its own separate budget.  New Amtrak would still have funding issues with the states, but at least any issues of cross-subsidization between the NEC and the rest of Amtrak would be eliminated.



Anyway, this is just Sunday morning thoughts over a cup of coffee.  I'd be interested in hearing other's thoughts of why this would or wouldn't work and additional areas where synergies might exist.  Can we do this without rants and name-calling?

Gordon



Edited 1 time(s). Last edit at 06/19/22 05:53 by gbmott.

If it happened like this I wonder how they would combine operations of the LD trains that utilize the infrastructure of the NEC such as Sunnyside yard or Washington Union Station for engine swaps.

Also a new CNOC, Corporate HQ, HR, Payroll  etc.. to run the LD network would have to be created apart from this new company that occupies the former NEC, no?

I like it, but would insist that infrastructure be owned, operated, maintained, and controlled separately. Otherwise, it will be another franchise model that wants first priority even when it gets there second. I have promoted an open access model from which this would be a little different because the government already owns the property...mmmm different governments own the property. That is a deterrent. The whole corridor needs to be under an independent operation, maintain, control structure regardless of ownership. Thus, even in passenger-only service, Congress must Art 1 Sec 8 authority to separate infrastructure from service.

TAW

> Anyway, this is just Sunday morning thoughts over
> a cup of coffee.  

Did your wife put something in your coffee? 

if i were running an airline, i would want nothing to do with the n.e.c.'s maintenance costs and the possible issues with labor in this day and age.

even IF somebody else was responsible for the n.e.c.'s maintenance, their increased maintenance costs would most likely be passed on to me...........

66

 

I don’t think breaking up Amtrak is a good idea and would likely eventually lead to the end of the network. Politically the current setup works because Amtrak has become a bipartisan thing. If you break it up then the pieces become targets for the other side. You could do alterations to how the organization is run - creating business line presidents with more operational and fiscal autonomy and focusing the CEO job and 1 Mass Ave more on external relations, government affairs, advocating for funding on the hill etc which is already one of the main tenants of the top job and which I also think Gardner is well suited for given his congressional background and separate that job from day to day ops. And bring in some different people to run the nuts and bolts day to day functioning of the business units closer to where those businesses operate instead of DC which could remove perceived conflicts of interest.

At the end of the day though the LD network is going to have a lot of practical head winds that are going to complicate how it operates in the future and the pandemic I think has changed a lot of things about our work force, how people want to live their lives and Amtrak will not be immune from those trends. And these things will be far more consequential than who is running Amtrak and I think for the network to continue serious consideration has to be made for whether changes are needed to attract employees. I think the long two night western trains are going to feel the pinch the most given the long time periods that OBS staff can be away from home and the long delays they face.

In my opinion the biggest threat to the network is being able to find enough people in the younger generations willing to endure the life style that the jobs involve - and in the shops acquiring talent for the craft jobs which is a problem across the economy. With COVID moving a lot of jobs remote a lot of people in the younger generations want more time at home and more industries are trying to find a way to give more jobs the ability to work at least partially from home and it’s going to be harder for companies like Amtrak and airlines to attract and keep employees in the younger generations for jobs that require so much time away. And when staffing gets short that means whoever is left has to be away even more. Add to that an increase in natural disasters and cuts at freight railroads contributing to longer and longer delays. And trains like the Zephyr, Builder, Chief, etc. are going to have the hardest time with this due to their length. Amtrak may need to rethink things down the road such as possibly splitting up OBS along the route, more bases, etc. to adapt to these generational changes in the workforce that COVID has put in overdrive. I think there’s going to come a time when the current operation of OBS crews starting at one end - running the whole route in both directions is simply not going to be sustainable at least on these two nighters.

Although the dearth of pilots gets most of the attention, flight attendants have was out rates similar to rail trainees. For many of the same reasons.

About 60% leave during training. Half of the remainder leave by the end of the first year.

These are tough jobs.

Posted from Android

On the surface ( only ) an interesting possibility.

  In real life it won't work as there are just too many skills differentials unique to each mode to make combining them succeed.

    IMHO-Ross Rowland 

When Anderson came from a long career with Delta to head Amtrak -- i thought this was very odd.

When he later brought 5 more top executives over from Delta -- I became very suspicious that the intent
was  to learn the details of NEC operations -- and then spin it off to Delta.

Why would Delta want it?  For the same reason Brightline tried to get it.  Acela and the Regionals  through off
a lot of cash every year  -- pre-covid it was $400M for Acela, and $370M for the Regionals.

As long the Federal Gov. continues to pick up all costs except direct operating costs - then Delta could make
close to $800M profit annually.

I think Brightline and Delta would recognized this as Profit -- if you don't - then  use a term you like better.

I suggest instead the alternative  term "Earnings" - or as Amtrak uses "Net Contribution to Earnings. (all mean the same thing).

However - since Covid has so changed things -- Delta may no longer be interested.



 



Edited 1 time(s). Last edit at 06/19/22 08:00 by ronald321.

I am struggling to understand why any publicly-traded company would even consider owing, operating or managing a government-sponsored operation like Amtrak.
Using Delta as an example, airlines need to operate profitably to stay in business.  Delta needs the support of shareholders and customers.  Without government money, Amtrak is out of business.  Its fares have never covered all operating and capital expenses.  Amtrak users would never agree to pay higher prices for substandard service.  Throw in a potential national railworkers strike and you have the complete picture of why this would never work.
Ron
 

Remember that the NEC infrastructure is owned by multiple entities, and is operated by both Amtrak and Metro North Railroad.  There are many users, all with different needs, agendas, and funding mechanisms.  (Commuter agencies, freight carriers, Amtrak's NEC and National system businesses).

I would guess the Amtrak NEC train operation (not the fixed infrastructure) might be of some interest to an investor if it could be obtained under favorable terms and with guaranteed conditions of access and infrastructure investment.  But it seems hard to imagine how the various owners and users could unwind the current arrangements in a way that would have appeal to an investor.

Dave

Sorting out the cost allocation with commuter tenants alone has been a huge challenge.

Posted from Android

Back in 1990, the NY Times noted that Amtrak was well positioned to compete against Pan Am and Trump Shuttle for the NYC to DC business traveler.

Amtrak offered convenient, downtown to downtown service for $79, while the debt ridden airlines charged 4s that much. But Amtrak reliability issues were a problem. Amtrak made a small profit on that $79 ticket.

Paywall https://timesmachine.nytimes.com/timesmachine/1990/07/29/issue.html

Posted from Android

gbmott Wrote:
-------------------------------------------------------
> Put away the popcorn and let's see if we can we
> have a rational discussion.  
>
> Question:  What if the NEC were spun off to Delta
> Airlines (or any of the other large airlines)?
>  For the NEC I can see possible advantages:

(1)
> being managed by a company experienced in
> high volume passenger transportation

Amtrak already does this.


(2) access
> to Delta's reservations system

Amtrak has a reservation system. Having access to Delta's will do nothing since we don't have any easy way to connect from a train to a plane in the US.


(3) link to
> Delta's catering network

I'm having trouble thinking of one airport next to an Amtrak train service facility.


(4) possible
> incorporation into Delta's mail and express
> business

What type of new cars do you propose for this service? Where will you find the staff and what craft would they be?


(5) access to Delta's training programs
> for people like gate agents and customer service
> people, and even customer-facing aspects of flight
> attendant training

Amtrak already has a program for this. Besides a 737 is different from an Amfleet so there would be no benefit of technical training.



(6) operation under a
> financial accounting system that I suspect may be
> more accurate than Amtrak's.

How would Delta be able to incorporate this because absolutely nobody understands Amtrak's accounting system.



 I'm not suggesting
> trying to merge the two operations -- this isn't
> Europe where intercity rail is often right inside
> the airport

Why not? That would actually make sense.


-- but rather to take advantage of the
> synergies available from Delta's systems.

What synergies? A railroad is not an airline. It's like trying to get synergy an orange and a T-Bone steak.




> Anyway, this is just Sunday morning thoughts over
> a cup of coffee.

Not sure what you put in your coffee, but I'd like a cup please.

As an employee, I can't agree more. Split or privatize the NEC passenger operations, and maybe include the Atlantic Coast and Florida trains.   AND spin-off to the US Transportation Department the NEC rail infrastructure. Here I believe that Amtrak management spends too much time on rail infrastructure and not enough on running passenger trains. Plus the NEC is also used by commuter agencies, who are not paying their fair share in the upkeep.  

Doubt any airline would be interested, but a Brightliner or Private Equity would be right up their alley.  

What would be left would be "Amtrak LITE". A smaller better managed entity more focused on long-distane and state subsidy routes. This Company is just too big for the current management talent that it has.

Spinning off the operation of the NEC won't solve the underlying problem. Rather spin off the NEC infrastructure to the mid Atlantic and NE states who have no choice but to maintain (and hopefully improve) the corridor. Intercity operations along the corridor could be contracted to Brightline or some other operating company and Amtrak could continue to operate a few long distance trains over the corridor as a tenant. As mentioned above Amtrak would then become a smaller, leaner operation focused on national intercity train service, and not be distracted by the chimera of operating profits in the NE by distributing its costs across the rest of the national network -- no allocation of snow fighting costs to the Miami station:-(

Back in 1979 when Amtrak was faced with eliminating 5 long-distance trains, I suggested to my rail advocate friends that instead Amtrak should abandon the NEC to the northeast states -- the NEC was costing Amtrak a lot more money than the 5 trains to discontinued. I wonder how things might now be different had that been done back then????

WP17

The Conference of Northeast Governors had a seat at the setup of Amtrak as an operator of the PennCentral lines.

Posted from Android

WP17 Wrote:
-------------------------------------------------------
 Rather spin off the NEC
> infrastructure to the mid Atlantic and NE states
> who have no choice but to maintain (and hopefully
> improve) the corridor.

I disagree.



Edited 3 time(s). Last edit at 06/19/22 19:33 by RuleG.

RuleG Wrote:
-------------------------------------------------------
> WP17 Wrote:
> --------------------------------------------------
> -----
>  Rather spin off the NEC
> > infrastructure to the mid Atlantic and NE
> states
> > who have no choice but to maintain (and
> hopefully
> > improve) the corridor.
>
> This is both arrogant and ignorant.

why is that?

66

I have said for years that i would like to see the NEC infrastructure spun off into a JPB of the states it runs thru plus the District of Columbia.
Divide the remainder into 3 completely seperate companies under a common holding company
1 NEC operations

2. All other operations including state supported midwest and west service as well as the long distance trains and NEC spurs to Buffalo, Richmond, Roanoke etc.

3 A coordination company to handle ticketing and other issues to continue as a Nationwide passenger service. Linking various non Amtrak/successor companies operated state supported trains with the rest of the system. For example a passenger could have a thru fare from Bakersfield to Milwaukee using a herzog operated San Joaquin train connecting to the California Zephyr and connecting again to a Metra operated Hiawatha train. Same thing with a passenger from Cumberland Maryland to Portland Maine utilizing an LDT, an NEC operated train and a Downeaster operated by yet a 3rd party.

Posted from Android