Airline consolidation & Amtrak

[D.P. Roberts]

I only caught bits & pieces of this show, but the parts I heard were very interesting. They even mentioned Amtrak once or twice, so I thought board members here might be interested. The guests posited the theory that the Delta-Northwest merger is the "beginning of the end" for affordable air travel. They pointed out that in many countries, air travel is still only for the wealthy, & the rest of the populace takes trains or buses. Our country may be headed in that direction again. In their opinion, Amtrak & Greyhound could see significant increases in ridership over the next few years, as the cost of air travel rises.

Other interesting points:

1. The airlines today lose about $30 per passenger per trip.

2. Since 2001, the airlines have lost about $30 billion dollars.

3. Throughout their history, the airlines have rarely, if ever, turned a profit.

I thought these points were interesting, since many pro-air travelers think that Amtrak should be required to turn a profit, just like the airlines, when the airlines are actually doing no such thing.

Anyway, here's the link to NPR, if anyone cares to listen to the 30-min show.

 

[sechs]

I will posit that, since deregulation, the market has consistently underpriced air travel in the United States. And airlines don't even cover the full costs of the airport and traffic control infrastructure that they use. We've been getting cheap air travel on the backs of foolish investors and the American taxpayer. It's unsustainable.

If the market is allowed to continue towards equilibrium, there will be fewer planes on fewer routes, with a higher ticket cost.

 

[transit54]

As someone inside the air industry, I completely agree. We're living in cheapest time to fly since commercial aviation began - that isn't going to last. Flying will become more a thing when time is sensitive, rather than the only way anyone gets anywhere. However, my worry is that unless someone in the government steps up, they'll be a lot more Greyhound and little to no improved Amtrak service. Almost every other developed nation (with the exception of our friendly neighbors to the north, who struggle with their own rail issues) has realized the benefit that a solid passenger rail network can bring to transportation and energy issues in their country.

Here in the US, we've seen next to no leadership on this issue. This is the perfect time for someone to step up and say, "what we need is rail, and here's how we're going to do it." Every public opinion survey shows strong support for increased rail.

The problem is, with the current state of things, far more will be driven to the highways than to the railways. There was an article on NYTimes.com today about increased bag fees at many carriers. I can't tell count how many people responded in the comments section, saying that next time they'll drive instead of fly. In the first 100 comments, only one person mentioned rail! The problem is we need strong leadership to promote rail as an option. I also think we need to build several true high speed corridors, including a high speed rail link across the country, that can interface with existing (and new) conventional trains. With such a link travel by rail long distances will become a lot more viable for people (consider if it only took 24 hours to cross the country by train, if you could get between New York and Chicago in 7, or 7.5 between New York and Flordia).

 

[sechs]

Between the cost of fuel and the impending bankruptcy of the highway trust, I think that a lot of those who say that they'll drive will change their mind when it comes down to it.

The problem is that people aren't aware of rail. It doesn't even occur to them.

I was recently watching an episode of the show Airline (if you need reasons not to fly Southwest, you can find them there). In this episode, fog in Providence caused flights to divert to BWI, on top of canceled direct flights. Hundreds of stranded passengers, with no flights foreseeable for hours, and no one thought to take Amtrak. One guy going to for a weekend trip to visit a lady-friend decided to go back home nearby.

You can see me yelling at the screen. Why the heck are people *flying* for trips directly from Baltimore to Providence? Or New York? Or Boston? Or Philly?

 

[saxman]

I do believe this is Amtrak's chance. Trains are already full, and they are going to get even more full. Seems like nowadays, flying is the cheapest way to go! Especially the longer you go compared to gas in driving. I'm sure I'm not the only one who cringes as the pump now goes above $60 to fill up my gas guzzler. I can't wait to get a better vehicle. And I really wish I could just hop a bus in my city, but we don't have one. That said, expect to spend $400 to $500 on your airline tickets in a future. On the other side of things I've heard reports that oil is artificially high right now as demand is peaking. Analysts say it might actually go down a little and stabilize out. I can't remember where I saw the article, or I'd post it. But hopefully, now that we have the US on the "going green" mentality, I hope it stays that way. People are actually seeing how nice "smartgrowth" is other than the strip centers with huge black parking lots, and how you have to drive from one center across the street to another. Is it just me, or are older strip centers going out of business. I notice a lot of that around my area.

 

[Joel N. Weber II]

I think that flying between Baltimore and Providence is marginally faster than the train given the actual speeds of transportation in this country. Some people don't think it's worth spending an extra couple hours to avoid the hassles of flying.

If we had routes by which you could get from the east coast to the west coast at an average speed of 150 MPH, then travel in a sleeper on a train in some sense becomes competitive with plane travel (if you assume that you aren't going to be able to sleep well during any part of the plane travel, and that time spend sleeping on the train is equivalent to time spent sleeping in a hotel). With today's cross country train speeds, you need more than half a week extra vs the plane trip over the course of the round trip to take such a long train trip. That's fine if you wanted to spend 2-3 weeks away from home anyway, but not if you only wanted to be gone for a total of five days.

 

[transit54]

Between the cost of fuel and the impending bankruptcy of the highway trust, I think that a lot of those who say that they'll drive will change their mind when it comes down to it.
The problem is that people aren't aware of rail. It doesn't even occur to them.

Exactly. That's the real issue. I think Amtrak's done a decent a job on the NEC in the last year or two, but elsewhere, I'm not really sure. And the anchor of their NEC campaign has been the Acela. I just read somewhere that Kummant wants to start looking at some new rolling stock, which is absolutely the way Amtrak needs to be going. If you can put in some new, very sleek looking rolling stock, sort out some of the issues with freight RRs, and increase corridor services, I think we'll start to see the beginning of a Amtrak's revival. What will eventually become necessary is more high speed track under Amtrak's control, but that's a much longer term issue.

You can see me yelling at the screen. Why the heck are people *flying* for trips directly from Baltimore to Providence? Or New York? Or Boston? Or Philly?

Well, it IS faster...but that's gambling you don't hit a some sort of ground delay. The other answer is that sadly, its sometimes cheaper. I know that my airline offers better fares than the Acela on a lot of the routes you mentioned if you're booking about three weeks out. And the regional is just going to increase the time difference even more (and they're usually packed as it is, which is why I try and avoid them). On Southwest, I can almost guarantee BWI-PVD is going to be cheaper than anything on the Acela, especially if you book in advance. I once flew on them ISP-MDW (Long Island to Midway) for $34. As of three months ago, they still offer $42 service on the route. My best deal on Amtrak for the same city pairs was $49, which was a hot deal a year ago when I rode the Cardinal to the LSL in a giant loop.

Now, yes, with fuel prices, airfare is going to get more expensive. My carrier posted an $8 million loss today, which many circles considered to be 'good' considering the conditions.

People are actually seeing how nice "smartgrowth" is other than the strip centers with huge black parking lots, and how you have to drive from one center across the street to another. Is it just me, or are older strip centers going out of business. I notice a lot of that around my area.

I've noticed an interesting trend at the airport, where employees who lived 40 minutes to an hour away have all moved within a 20 minute commuting radius because of higher fuel prices, which I can see as only a good thing (the moving, not the fuel prices). I'm also spending some time this summer doing some work with the local transit agency, so I'm getting some perspective of that side of transportation, too. Their ridership is definitely up, but at the same time, they're dealing with the higher fuel prices also. Which is an important point, because Amtrak has to grapple with higher fuel prices too - especially with the vast majority of their route non-electrified. I just

 

[Rail Freak]

I only caught bits & pieces of this show, but the parts I heard were very interesting. They even mentioned Amtrak once or twice, so I thought board members here might be interested. The guests posited the theory that the Delta-Northwest merger is the "beginning of the end" for affordable air travel. They pointed out that in many countries, air travel is still only for the wealthy, & the rest of the populace takes trains or buses. Our country may be headed in that direction again. In their opinion, Amtrak & Greyhound could see significant increases in ridership over the next few years, as the cost of air travel rises.
Other interesting points:

1. The airlines today lose about $30 per passenger per trip.

2. Since 2001, the airlines have lost about $30 billion dollars.

3. Throughout their history, the airlines have rarely, if ever, turned a profit.

I thought these points were interesting, since many pro-air travelers think that Amtrak should be required to turn a profit, just like the airlines, when the airlines are actually doing no such thing.

Anyway, here's the link to NPR, if anyone cares to listen to the 30-min show.

Being a Buffet fan, I noticed uncle B.( as in Warren) invested a little in our rail system!

 

[rogers55]

I spent about 30 years in the Air Transportation business and even though my wife and I can fly for free we prefer to take the train.

The only time airlines turn a profit is when they are subsidized. The subsidies are often hidden, government contracts for instance but the biggest is carrying the mail.

At one time all the mail went by train. Ok, at one time it went by horse, but in my lifetime it was by rail. Now it is all by air, that is a big revenue earner for the airlines.

If mail went by Amtrak a lot of things would change.

Regards,

Roger

 

[jackal]

I spent about 30 years in the Air Transportation business and even though my wife and I can fly for free we prefer to take the train.The only time airlines turn a profit is when they are subsidized. The subsidies are often hidden, government contracts for instance but the biggest is carrying the mail.

At one time all the mail went by train. Ok, at one time it went by horse, but in my lifetime it was by rail. Now it is all by air, that is a big revenue earner for the airlines.

If mail went by Amtrak a lot of things would change.

Regards,

Roger

For speed reasons, I can understand why the USPS may not want to cancel its contracts with the airlines and send all mail by Amtrak, but one thing I don't get: why does surface mail--things like Parcel Post--go by truck? That's the kind of stuff, as well as short-distance (or last-leg) mail (say, stuff that's landed at LAX but needs to be taken up to the Central Coast area, which is pretty far from any major airports), that could easily be carried by Amtrak--it's currently carried by truck. I wonder if changing that would pump enough money into Amtrak to see some change...

 

[haolerider]

I spent about 30 years in the Air Transportation business and even though my wife and I can fly for free we prefer to take the train.The only time airlines turn a profit is when they are subsidized. The subsidies are often hidden, government contracts for instance but the biggest is carrying the mail.

At one time all the mail went by train. Ok, at one time it went by horse, but in my lifetime it was by rail. Now it is all by air, that is a big revenue earner for the airlines.

If mail went by Amtrak a lot of things would change.

Regards,

Roger

For speed reasons, I can understand why the USPS may not want to cancel its contracts with the airlines and send all mail by Amtrak, but one thing I don't get: why does surface mail--things like Parcel Post--go by truck? That's the kind of stuff, as well as short-distance (or last-leg) mail (say, stuff that's landed at LAX but needs to be taken up to the Central Coast area, which is pretty far from any major airports), that could easily be carried by Amtrak--it's currently carried by truck. I wonder if changing that would pump enough money into Amtrak to see some change...

One of the reasons that Amtrak got out of the mail business, was the extra time it took to cut out and add in the mail cars to the consist and that delayed the passengers even more - all the way along the routes.

 

[AmtrakWPK]

Didn't they used to have a system that hung the mailbag out on a post that was grabbed by the mail car on a moving train as it went by? Seems like technology has gone significantly backwards and perhaps something like that needs to be looked at again, rather than cutting cars. Or have more of a FedEx or Olympics mentality when it comes to doing the car cutting or adding, take the five to seven minutes or less that it NEEDS instead of the half hour or more it currently TAKES.

 

[transit54]

One of the reasons that Amtrak got out of the mail business, was the extra time it took to cut out and add in the mail cars to the consist and that delayed the passengers even more - all the way along the routes.

Right. Which is why I think that carrying parcels isn't the way to go. IMO, it's absolutely stupid to packages mail by truck long distances, they should absolutely throw the trailers on flatcars and send them across the country the way UPS does (I know its more complicated than this, as the transportation is outsourced to private companies, so the USPS doesn't have the decision over trucks vs. intermodal trains, but still...).

But airlines carry first class mail - it comes in trays and is loaded under the plane with all the other baggage. This is what Amtrak needs to do - fill up the excess space in baggage cars with first class mail trays, and load it/unload it just they do with regular baggage. No need to take the time to cut cars out of the consists. If it became profitable, they could even add an additional baggage car. I think they also need to up their promotion of Amtrak Express shipping - not the mail and express service previously mentioned, but their current offering where they can take small package and LTL shipments in their baggage cars. My airline has started to get into this, and from what I hear its a huge revenue driver. Two quarters ago, it was the only reason we broke even. Again, no need to invest in extra cars/cut them out of the consist. Just a matter of utilizing the available baggage space to the fullest extent possible.

Another thing that we do is we bid on contracts to transport government employees. Perhaps they already do this, but if not, there's no reason why they can't along the northeast corridor.

 

[jackal]

Didn't they used to have a system that hung the mailbag out on a post that was grabbed by the mail car on a moving train as it went by? Seems like technology has gone significantly backwards and perhaps something like that needs to be looked at again, rather than cutting cars. Or have more of a FedEx or Olympics mentality when it comes to doing the car cutting or adding, take the five to seven minutes or less that it NEEDS instead of the half hour or more it currently TAKES.

Yes, they did, but that was primarily in the olden days for picking up and dropping off bags of letters as the train raced through a small town. You can't do that with large loads of mail or parcels.

As far as the cutting cars in and out, it would be nice to get it done quickly, but there are these pesky little things called FRA regulations that require certain things when the consist is changed or cars are added or subtracted, among which are air brake tests. It's unfortunately not a matter of slamming the car on and lacing up the air hose and racing off. I think it could be done by a motivated switch crew in less than 30 minutes, but it'd be impossible to do in five.

 

[jackal]

Another thing that we do is we bid on contracts to transport government employees. Perhaps they already do this, but if not, there's no reason why they can't along the northeast corridor.

The way I understand it, a government traveler can book and use any airline that is a signer to the GSA/SDDC agreement on air travel. The signers agree to provide negotiated rates between certain city pairs, and the traveler is free to use whichever one he/she wants.

It appears that the SDDC has an agreement with Amtrak (http://www.sddc.army.mil/sddc/Content/Pub/15078/MILRAILAGREEMENT.pdf), so it's not that Amtrak doesn't want to transport government employees, it's that government employees haven't been using what's already available to them.

I'm not sure that a particular transportation company can bid for exclusive service on a given route or city-pair.

I could be wrong about all of this, though. I'm basing it on my experience in the car-rental industry, where the traveler has the freedom to book whichever company he/she wants (as long as said company is a signer to the SDDC's Master Car Rental Agreement, which all major agencies are). Typically, they (usually SATO or Carlson Wagonlit) book whichever is offering the cheapest government rates, but I believe the employee has a say in which company to book (e.g. if they collect status with Hertz's #1 Club Gold program or something).

 

[transit54]

Of course, now that the issue has been brought up, I can't find the news story I saw about that. But I think you're right, in that we signed an GSA agreement to provide a particular rate on some of our city pairs. That being said, I wonder if Amtrak's agreement covers the Acela. As I can see that as being a large appeal to a government traveler than the regional would be.

More and more I hear of companies using the Acela and having great experiences. Most recently, my sister went down to Stamford, CT to see a college admissions fair and one of the schools she was looking at had their representatives take the Acela to the event. Supposedly they could stop talking about how great it was and how much they enjoyed it.

 

[Green Maned Lion]

You have to realize that Amtrak is something many people are, well, scared of. Take my grandmother for instance. My grandmother is a pretty bright lady. In fact, when I have problems I can't break with my parents (sometimes because they either are the problem, or a major component in the problem) she's the person I go to for advice. And I'm not one for asking people to advise me on things.

I was driving my grandmother to the airport and she was mentioning she was too old for this kind of thing. I recommended she try taking the train instead. She had some bad experience on VIA getting stuck in a duplex roomette on a trip, and doesn't want to take the train, partly because of that. It seems ridiculous to take a two day trip to Denver coupled with riding the dog to Colorado Springs. Thats how I'd do it, I'll have you know.

Anyway, she is adamant that she isn't taking the train places. My girlfriend and I even offered to take her somewhere on the train. No go. Wouldn't even consider it. Slow, impractical, cooped up, and expensive, etc. etc.. And as I said, we're talking about a bright person here.

 

[transit54]

I have a friend who's father, for years, drove daily between to and from work in New Jersey, along a route that had frequent NJ Transit service. He, like me, is a real advocate for passenger rail (in fact, he's partly the reason I ended up getting into Amtrak travel in the first place), so I remarked that it was surprising that he hadn't encouraged him to take the train.

As it turns out, his father was a daily train commuter, until an incident a number of years ago when he was standing to exit the train as it pulled up to his stop. Right before the door opened, another passenger pulled out a knife and repeatedly stabbed a man who was standing in front of him, before fleeing through the open doors. After the stabbing incident the guy was so shaken he ended up driving to work everyday. So far, that's the best excuse I've encountered yet on why someone won't ride the rails.

 

[Green Maned Lion]

That one I can understand. My dad also refuses to ride the rails from Long Branch to Morristown for reasons I fail to fathom.

 

[Crescent ATN & TCL]

Well the way things are going we are going to have a crumbling road, rail, and air systems, we might as well start raising horses for transportation.

The interstates are congested and falling apart, travel times are increasing, roads are becoming more dangerous, more fuel is needed because of the congestion.

Airlines are losing money worse than Amtrak with fewer results, (they still get more subsidies though), OTP has dropped to 6# on most airlines (FlightStats) , airlines are now trying to save money by putting just enough fuel in to get to the next stop and not having any for emergencies(link to news report), planes aren't being inspected, hundreds of flights are being canceled.

Amtrak is dealing with its usual problems, congress starving them for cash, freight railroads delaying trains, idiots getting hit by the trains, etc. but somehow Amtrak is performing better than every other mode of transportation, OTP is up to 74.3% (up from 72.9%), ridership is increasing, they are operating under budget, the January '08 report shows that everything is getting better! (Link to January '08 report on Amtrak's site in PDF format)

This is what I think should be done:

I think congress needs to forget about making a profit off of transportation and treat it as a government service.

Since Amtrak is performing the best as of right now, I think it deserves the most funding.

We need to fix our roadways

Make something along the lines of Amtrak for the passenger portion of air transportation and get congress to monitor and fund it

Electrify all existing rail corridors

Build a high speed rail system along the lines of the interstates

 

[RobertF]

Well the way things are going we are going to have a crumbling road, rail, and air systems, we might as well start raising horses for transportation.
The interstates are congested and falling apart, travel times are increasing, roads are becoming more dangerous, more fuel is needed because of the congestion.

Airlines are losing money worse than Amtrak with fewer results, (they still get more subsidies though), OTP has dropped to 6# on most airlines (FlightStats) , airlines are now trying to save money by putting just enough fuel in to get to the next stop and not having any for emergencies(link to news report), planes aren't being inspected, hundreds of flights are being canceled.

Amtrak is dealing with its usual problems, congress starving them for cash, freight railroads delaying trains, idiots getting hit by the trains, etc. but somehow Amtrak is performing better than every other mode of transportation, OTP is up to 74.3% (up from 72.9%), ridership is increasing, they are operating under budget, the January '08 report shows that everything is getting better! (Link to January '08 report on Amtrak's site in PDF format)

This is what I think should be done:

I think congress needs to forget about making a profit off of transportation and treat it as a government service.

Since Amtrak is performing the best as of right now, I think it deserves the most funding.

We need to fix our roadways

Make something along the lines of Amtrak for the passenger portion of air transportation and get congress to monitor and fund it

Electrify all existing rail corridors

Build a high speed rail system along the lines of the interstates

Common guys, I know we are all Amtrak lovers but let's not be bashing the airlines all over creation either. As a pilot (private with an instrument rating), I can tell you that fuel issues are quite normal in flight. Re-read the link you posted AND the comments. There are a number of pilots who indicate that they disagree with the post.

(link to news report)

There may be an occasional dispatcher who pushes back, but it's the captains responsibility to make sure that flight is safe and has enough fuel. Also, you have to realize that pilots are just as opinionated (and unionized) as anyone. This can lead to grumbling about certain topics that might perhaps be hiding the true problem. These guys have lost pensions, lost salaries, lost jobs.... so I think we have to take the quotes of a few pilots in prospective. The sky isn't falling.

Fuel issues are not un-common for a number of reasons. Unplanned holds, headwinds greater than expected, traffic snarl-ups... The main reason for any fuel issues is as likely to be capacity as opposed to not "topping" off.

I had to crack up on this line:

"The Transportation Department last week released a report saying flights declaring minimum or emergency fuel levels are increasing for routes into Newark, based on a sample of 20 landings."

20 whole samplings!! Wow, now there is a statistically relevant number. When was this taken, during a thunderstorm? On a day when the jet stream was blowing at 200 MPH and these were all westbound arrivals? This isn't a sample and it's not scientific, it's sensationalism.

I've worked for two airlines now (not on the flying side but on the operational side). There are those who understand that things must change. There are those who, even in the face of bankruptcy, don't seem to get it. I was present during the bankruptcy of one particular large carrier, and I can tell you that I don't think management there had a clue what they needed to do to actually make money. There is ton's of revenue there, but costs are still poorly managed, including fuel costs. Money flows like water. They ordered red ink by the truck load.

Finally, the link posted ends with this quote:

"As someone who has never been in the cockpit, I'm out of my league in these matters. Is this report something that should concern us?"

Seriously, this comment in and of itself rather disqualifies this post as anything authoritative, don't you think?

I respect all of you here, but really... the airlines are not the devil. Without them, this country would never have been the economic powerhouse that it is. I could go on about the different economies in Europe and the US with respect to air travel and rail travel, and why we ended up being much more of an air travel society. But I think I've said enough for now.