Passenger Trains > A bit concerned about Harris

As some of you know, I have generally been fairly positive about Amtrak going forward.  The recent budget document did not cut Amtrak's operational funding or anything else.  That is good.  What concerns me is this stupid idea that Amtrak will achieve operational break-even by 2028.

There is only one way to get there.  Kill the long distance trains.  I may be wrong on their strategy, but this is the only way it works.  And even then we all know it will be a charade.  The capital costs of the corridors somehow get ignored in these equations.  Further, support for Amtrak will evaporate if trains come off.  The Senators and Reps from Kansas will not support any Amtrak funding if they do not have trains.  One would think that Amtrak could see that, but evidently not.

Operational break even could maybe be achieved by spreading the fixed costs of the network across MORE trains rather than fewer.  We often find that doubling service results in more than doubled ridership.  Imagine that.

We all need to pay attention, I think, and be ready to act should things get dumb out there.  I still remain optimistic, but the very idea that Amtrak will break-even, ever, is just dumb.  And Harris knows it.

Chessie1963 Wrote:
-------------------------------------------------------
> As some of you know, I have generally been fairly
> positive about Amtrak going forward.  The recent
> budget document did not cut Amtrak's operational
> funding or anything else.  That is good.  What
> concerns me is this stupid idea that Amtrak will
> achieve operational break-even by 2028.
>
> There is only one way to get there.  Kill the
> long distance trains.  I may be wrong on their
> strategy, but this is the only way it works.  And
> even then we all know it will be a charade.  The
> capital costs of the corridors somehow get ignored
> in these equations.  Further, support for Amtrak
> will evaporate if trains come off.  The Senators
> and Reps from Kansas will not support any Amtrak
> funding if they do not have trains.  One would
> think that Amtrak could see that, but evidently
> not.
>
> Operational break even could maybe be achieved by
> spreading the fixed costs of the network across
> MORE trains rather than fewer.  We often find
> that doubling service results in more than doubled
> ridership.  Imagine that.
>
> We all need to pay attention, I think, and be
> ready to act should things get dumb out there.  I
> still remain optimistic, but the very idea that
> Amtrak will break-even, ever, is just dumb.  And
> Harris knows it.

He has to say it to mollify legislators....politics...just politics...As for what can be done to increase revenue.....like sell more tickets....one hopes this is something they actually want. It's been a disease of the business world that you can cut your way to profitablility....you cannot....but you can juggle the books and make it look good...for a while.

With the exception of Brightline...which operates in very favorable markets, passenger service has been supported in two ways.  First by the income from freight service division of the same road or second from government subsidy...i.e. mail carriage contracts or direct subsidy support...commuter rail operations.  To seperate those revenue streams dooms anything but high-population, high-mobile areas of the country.  This would exclude huge areas of TAXPAYERS whose revenue would support not their activities but activities of a relatively select few.  That is simply not sustainable.  There can be no complete passenger rail system that does not develope from two revenue streams.  Private operator on with controlled subsidy from a secondary source is the seeming answer...if only that's recognized and appreciated by developers and government.

One item occasionally touched on TO is how much business Amtrak derives from en-route cities on LD trains. In some places it can be substantial.  Flagstaff often has 40-50 people waiting to board. Lamy, I'm told, may have 5. A service which touches just a tiny % of a vast congressional district and affects a few dozen people per month may not be high on a legislator's priority list.

I  could certainly see many legislators choosing to renew Essential Air  Services, and fund some of that by cutting Amtrak's allocation.

            I believe John Barringer made the statement of  "You cannot starve a company into prosperity" and he is very correct. As far as I know every Amtrak hack president and their board members believe otherwise. They at least say it while in office to cover their moronic salaries.        It is agovernment position and they do not care, grab all the money as long as you can.    If someone, anyone thinks it can make a profit, everything has to change All management FIRST and have some really competent business sense and !!!! some really good agreements with the freight roads - they still own the tracks no matter what the others think. IF your Amtrak power falls on it ass every stinking day, screwing up their freight business, they will turn on the frt road like a rabid dog. After 50 years of daily crap from Amtrak,  yeah those deals with last about 20 minutes.        Little kids know this.

Well, most of the equipment is free, provided by the taxpayers. No cost to amortize or depreciate.

Victor Baird

Chessie1963 Wrote:
-------------------------------------------------------
>   The
> capital costs of the corridors somehow get ignored
> in these equations.  

Yes, the track, structures, electrical systems, etc.  And it is depreciated, all oif it.  GAAP is allegedly followed by Amtrak.  However, Amtrak cleverly talks about "operating profit."  Look, I have owned hotels.  The variable costs are low, fixed costs are high.  If I were to ignore depreciation and costs associated with the hotel infrastructure, it would take the sale of about 3 rooms each night to show an "operating profit."  Add in all the costs and that number jumps to 12 rooms (of 32 available) each night to show a profit.  So Amtrak obfiscates the truth. 

No surprise, however.

wabash2800 Wrote:
-------------------------------------------------------
> Well, most of the equipment is free, provided by
> the taxpayers. No cost to amortize or depreciate.
>
> Victor Baird
>
> Chessie1963 Wrote:
> --------------------------------------------------
> -----
> >   The
> > capital costs of the corridors somehow get
> ignored
> > in these equations.  

If Harris is smart he'll make Amtrak better and I doubt that the LD Trains will go awaty, they do that the corridors will die a slow death, especially the ones who rely on LD connections!

Youi really think so?

Victor Baird

ProAmtrak Wrote:
-------------------------------------------------------
> If Harris is smart he'll make Amtrak better and I
> doubt that the LD Trains will go awaty, they do
> that the corridors will die a slow death,
> especially the ones who rely on LD connections!

If the LD trains go, what will be their excuse then for why they are not profitable? Less fixed costs to spread out among trains. Amtrak continually kicks the can down the road by capitalizing costs on the NEC rather than considering them as a direct operating expense. So that will also catch-up very quickly. The focus is on EBITDA (earnings before interest, taxes, depreciation, amortization) rather than the "net profit" or bottom line......LD trains are high in operating costs, low in capital costs compared to what sustains (overall) the NEC operations. 

"Make Amtrak better"

Good objective, but you need to get everyone pointing in the same direction, and focusing efforts on very specific results applicable to their jobs