comments 4

Amtrak lines with the biggest operating losses

I was reading this morning about Richard Anderson’s efforts to stem Amtrak’s operating losses, and the controversies surrounding those moves. Richard Anderson became President and CEO of Amtrak in 2017. Before that he was the CEO of Delta Air Lines.

One of the things that Anderson is trying to do to improve profitability is shrink or eliminate some of the company’s long-distance train routes and instead focus on the more frequent (and profitable) short haul routes. Here is a map from the WSJ that I thought was really interesting:

The only profitable corridor in the network (black line above) is the one running from Boston down to Washington D.C. The long-distance routes running west from Chicago (1, 2 and 3 above) are the lines with the biggest operating losses (thick red lines above).

All of this makes sense. The northeast corridor works because it has the population density and because the trips are short enough that rail is an appropriate substitute for air travel. The northeast is one giant megalopolis.

The controversy is that, despite being unprofitable, there’s a segment of the market that still uses and likes many of these long-distance passenger routes. So politically, it’s a challenge to eliminate them. But there are also pressures from Congress to have Amtrak cover its operating costs.

We should also not forget that Amtrak was formed in 1971 precisely because all of the private companies that had been previously operating these lines were bleeding money. Highways and airlines had taken the passengers. And so this was a way of preserving passenger rail in the US.

I am curious what all of you think about this. To what extent should these unprofitable lines be propped up by the government? Let me know in the comment section below.

4 Comments

  1. Peter James

    I don’t know about the government support aspect but I do know I would much rather take trains than planes when I can. And definitely trains rather than cars or buses. But the pricing never makes sense. If you’re one person it costs about the same as the gas expense of driving. But as soon as you have to buy more than one ticket it makes no sense. They should sell tickets by car capacity (5 people) and a little more for SUV capacity (7-8). And make those prices competitive with the cost of driving. My hypothesis is that the increase in families/groups who otherwise couldn’t afford to take the train will make up for it. (Mind you a solo traveler still pays the same price so they’re not losing revenue on solo travelers, just making group travel more realistic).

    Like

  2. David

    I agree with pricing comments above. The other thing that will increase the number of riders is to somehow find a way to allow people to bring their pets. Maybe add one flatbed car with grass and a bush or two.

    Enjoy your blog.

    Like

  3. Would be interesting to break this down further, by segment. For instance, is the portion of the Texas Eagle between Chicago and Saint Louis more viable than the rest? Same question for Seattle-Portland. Might raise some interesting questions about the appropriateness of various service patterns (more frequency on shorter segments with the occasional full length trip?).

    Interesting to see that the losses on the Auto Train are fairly low, relatively speaking. Perhaps that would’ve been an alternative to either the ICE or electric versions of your recent road trip. Wonder if an Auto Train service would be viable between Calgary and Vancouver…

    Liked by 1 person

  4. Michael Mecseri

    I agree with Peter. Although, planes are typically a lot more expensive than driving, people still pay those prices. I know planes “can” be faster but, flying can also be a huge pain, depending on the situation. I think Amtrak could also do a lot better if they had some better marketing for those big, long loser routes. They could tout the many benefits, including an overall better experience of riding in a train over a car, bus or plane. The government has a lot to do with the success or lack thereof of passenger rail in the United States. Back in the 50’s and 60’s planes and automobiles took a lot away from rail. But, private train companies also had little to no control over what they could charge for tickets so, yes… they were bleeding money. What do you expect when they were also locked out of the free market? High speed rail, which is growing in other parts of the world would make a big difference too. It’s a complicated issue but, until the powers that be, decide that passenger trains are important again or a grassroots movement develops; I’m afraid we’re stuck with a weak, government subsidized system called Amtrak as our only option for long distance passenger rail in America.
    (A very unfortunate situation indeed)

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s