Any Changes so for under Mr. Moorman?

[crescent-zephyr]

I don't understand why dining car service can't be evaluated like any other product Amtrak offers. If it turns an operating profit by itself, great, keep it. If reducing dining car costs cutting back on service or scrapping it altogether has a disproportionate impact on ticket review (e.g. for every $1 of food service expense cut, ticket revenue drops by $2, say), then keep it as is. If raising prices brings it into the black, raise away. But if it's a money loser, can't be fixed and it doesn't have a meaningful impact on ticket revenue, cut it, scrap it or contract it out and take it off the books.

With that mentality.. All Amtrak long distance trains will be scrapped. None make a profit.

 

[TiBike]

There's a point where government subsidies should stop. If you take Interstate highways as an example, that point might be "above the rails" for Amtrak. Subsidise the track, bridges and other basic infrastructure, then run the railroad on the basis of value given for value received. If there are special reasons to subsidise service – service to isolated rural communities, traffic reduction in urban areas – then, fine, go for it. But there's a point where you stop providing extras if people don't value those extras sufficiently to pay the cost. Or alternatively, you raise prices and/or cut costs to the point where cost and revenue are in balance. Or find another company that doesn't have Amtrak's cost structure and let them make a go of it. Dining car meals are a good example of that.

 

[Philly Amtrak Fan]

I don't understand why dining car service can't be evaluated like any other product Amtrak offers. If it turns an operating profit by itself, great, keep it. If reducing dining car costs cutting back on service or scrapping it altogether has a disproportionate impact on ticket review (e.g. for every $1 of food service expense cut, ticket revenue drops by $2, say), then keep it as is. If raising prices brings it into the black, raise away. But if it's a money loser, can't be fixed and it doesn't have a meaningful impact on ticket revenue, cut it, scrap it or contract it out and take it off the books.

With that mentality.. All Amtrak long distance trains will be scrapped. None make a profit.

A lot of state supported trains don't make a profit either.

 

[neroden]

I don't understand why dining car service can't be evaluated like any other product Amtrak offers. If it turns an operating profit by itself, great, keep it. If reducing dining car costs cutting back on service or scrapping it altogether has a disproportionate impact on ticket review (e.g. for every $1 of food service expense cut, ticket revenue drops by $2, say), then keep it as is. If raising prices brings it into the black, raise away. But if it's a money loser, can't be fixed and it doesn't have a meaningful impact on ticket revenue, cut it, scrap it or contract it out and take it off the books.

With that mentality.. All Amtrak long distance trains will be scrapped. None make a profit.

Actually, 6 out of the 15 long distance trains make a PROFIT, in terms of revenues minus actual running costs. More of them make a profit each year as ridership goes up. They don't cover fixed overhead costs because there aren't enough of them. Congress doesn't even understand *this*, though Boardman did attempt to explain it to them. It's even harder to explain that the Capitol Limited feeds passengers to other trains, so even though it doesn't make a direct profit, if it were cancelled Amtrak would probably lose more money due to lost ticket sales on other trains.
(If you're curious: all the Viewliner trains except the Cardinal make a profit. The Cardinal would too if it were daily. The Auto Train makes a profit. Based on recent trends I expect the Coast Starlight to make a profit next year, and the Empire Builder probably in 2018. Of the remainder, it's harder to predict which train will go into profit next: the CZ and the SWC have been seeing the fastest growth in revenues-minus-direct-costs; the CONO and CL start with smaller deficits to make up but have seen low growth. The Texas Eagle and Sunset Limited will take longer.)

I'll tell you, TBike, what the problem is. The problem is that it is very hard to *demonstrate* the degree to which crappy food service is driving away customers and reducing ticket income. There are so many variables affecting ticket income that the best you can do is make an educated guess. I'm quite certain that crapifying the food service is losing more money in tickets than it saves in costs, but how do I *prove* it?

FWIW I don't feel that it's appropriate to ask train service to make enough of a profit to cover overhead. Drivers do not cover the overhead of the roads; that's paid for out of general taxation, which covers road repairs, maintenance, police (traffic cops), snowplowing, etc. etc. Trains cover a ridiculous amount of overhead already, more than they should. The long-distance trains already have part of the overhead of track maintenance included in "direct costs"; it's part of the contracts with the freight railroads. So they don't cover an arbitrary allocated percentage of the cost of having a national reservations system; why should they cover any of that? Airlines don't cover the full cost of Air Traffic Control and never have, airports are generally paid for by local governments, etc.

 

[willem]

Drivers do not cover the overhead of the roads; that's paid for out of general taxation, which covers road repairs, maintenance, police (traffic cops), snowplowing, etc. etc. Trains cover a ridiculous amount of overhead already, more than they should. The long-distance trains already have part of the overhead of track maintenance included in "direct costs"; it's part of the contracts with the freight railroads. [...] Airlines don't cover the full cost of Air Traffic Control and never have, airports are generally paid for by local governments, etc.

Thank you, neroden, for saying what I was trying to put into words until I reached your post. You are right.

With regard to the roads, big trucks cause almost all the damage but pay for a fraction of the upkeep. As noted, the airlines get the infrastructure they need at a small portion of the cost of that infrastructure. Why does Congress think Amtrak should be so different?

 

[jis]

FWIW I don't feel that it's appropriate to ask train service to make enough of a profit to cover overhead. Drivers do not cover the overhead of the roads; that's paid for out of general taxation, which covers road repairs, maintenance, police (traffic cops), snowplowing, etc. etc. Trains cover a ridiculous amount of overhead already, more than they should. The long-distance trains already have part of the overhead of track maintenance included in "direct costs"; it's part of the contracts with the freight railroads. So they don't cover an arbitrary allocated percentage of the cost of having a national reservations system; why should they cover any of that? Airlines don't cover the full cost of Air Traffic Control and never have, airports are generally paid for by local governments, etc.

I agree wholly with this.
I am though at a loss on how to reverse this trend until we manage to get more people to ride and experience trains with proper service, which of course takes resources. A bit of a Catch 22 we are in.

 

[TiBike]

I'll tell you, TBike, what the problem is. The problem is that it is very hard to *demonstrate* the degree to which crappy food service is driving away customers and reducing ticket income. There are so many variables affecting ticket income that the best you can do is make an educated guess. I'm quite certain that crapifying the food service is losing more money in tickets than it saves in costs, but how do I *prove* it?

Amtrak is, in effect, running an experiment that could help answer the question. IIRC, they've eliminated dining car service on the Cardinal and replaced it with some kind of enhanced cafe car service. A comparison with past revenue performance on the Cardinal and over the same time period with similar routes that have kept dining car service should give some kind of idea. Passenger surveys - on the Cardinal and on similar routes - should also provide a useful comparison.

Another analysis they could do is compare revenue/operating profit on state-run trains with superior cafe service (Capitol Corridor and Surfliner are examples, and I bet there're others) and the standard Amtrak long distance cafe cars. That would give some idea about the impact of crapifying the food. Should be able to learn something from a comparison to VIA Rail too.

I agree that the proper benchmark shouldn't be whether Amtrak covers all of its overhead. But it's a fair question to ask whether particular aspects of its service – dining cars, baggage cars, station lounges for example – result in a net contribution to overhead or require additional subsidies.

 

[jis]

I'll tell you, TBike, what the problem is. The problem is that it is very hard to *demonstrate* the degree to which crappy food service is driving away customers and reducing ticket income. There are so many variables affecting ticket income that the best you can do is make an educated guess. I'm quite certain that crapifying the food service is losing more money in tickets than it saves in costs, but how do I *prove* it?

Amtrak is, in effect, running an experiment that could help answer the question. IIRC, they've eliminated dining car service on the Cardinal and replaced it with some kind of enhanced cafe car service. A comparison with past revenue performance on the Cardinal and over the same time period with similar routes that have kept dining car service should give some kind of idea. Passenger surveys - on the Cardinal and on similar routes - should also provide a useful comparison.

Surely you meant to say the Silver Star perhaps? Cardinal actually still has Diner service though a restricted one. It is Silver Star that lost all Diner service. And the comparison would be between the Star without Diner with an enhanced Cafe menu, and the Meteor with full Diner service I would think.

 

[TiBike]

Thanks, yes, that's what I meant to say :wacko: . I was too lazy to go back and check through the threads.

You're right – those two trains would make for a great comparison. Maybe Amtrak had that in mind when they did it? Too much to hope?

 

[Ryan]

If you want your argument to be taken seriously, you may want to expend the moderate amount of effort require to get the basic facts right.

Amtrak's hand was forced, when they didn't have sufficient diners to support the trains with them. The Star is a logical choice since anyone that really feels strongly about the dining car can take the Meteor - IF the schedule works equally well for them and they're not going somewhere exclusively served by the Star.

For those reasons, a comparison between the two trains isn't going to be perfect - there are a lot of factors that impact who rides what. Personally, I almost always take the Meteor when I head south, because the later departure better facilitates a complete workday before leaving.

 

[TiBike]

I didn't say it was a perfect comparison. But it's good enough – great enough – to be very useful. It doesn't matter why they did it, but they should have realised it was a real world experiment and taken advantage of the opportunity.

Amtrak is doing passenger surveys – I got one recently about business class service on the Coast Starlight. If they survey customers on both routes and ask them why they picked one over the other, that'll give them a fair idea of how passengers value dining car service.

At the risk of not being taken seriously (can't imagine that on the Internet) I'll assume without checking that there's a price differential for sleeper service, and that differential has varied according to passenger load. If that differential is small and/or has narrowed over time, that's another indication that dining car service isn't highly valued.

 

[jis]

In my experience if taking the two trains from time to time, the differential on an average has not changed.

 

[TiBike]

In my experience if taking the two trains from time to time, the differential on an average has not changed.

Is the differential proportionate to the value of the meals?

 

[A Voice]

I didn't say it was a perfect comparison. But it's good enough – great enough – to be very useful.

It's just not that simple, frankly; There are too many intangibles at work here. Regardless though, a just 'good enough' study has too many holes in it to ever derive meaningful and significant conclusions from the data. Simply put, the two trains are not a direct comparison to begin with; They serve too many different markets, on vastly differing schedules, to properly control for, and there are two day trains serving major portions of the common route. Several major origin and destination points would see different meal periods - or none at all - traversed by the schedules of the four trains. Lounge car fare may be acceptable for lunch, but perhaps not dinner (or similar).

 

[jis]

In my experience if taking the two trains from time to time, the differential on an average has not changed.

Is the differential proportionate to the value of the meals?

No. Not in all cases. Then again neither was the markup in Sleeper prices when compulsory meal was introduced. It is just a clever marketing scheme to charge way more for the same service anyway, specially for single travelers.

 

[keelhauled]

I'll tell you, TBike, what the problem is. The problem is that it is very hard to *demonstrate* the degree to which crappy food service is driving away customers and reducing ticket income. There are so many variables affecting ticket income that the best you can do is make an educated guess. I'm quite certain that crapifying the food service is losing more money in tickets than it saves in costs, but how do I *prove* it?

I'll take a crack at it. Per Amtrak's September monthly report (https://www.amtrak.com/ccurl/515/889/Amtrak-Monthly-Performance-Report-September-2016-Preliminary-Unaudited.pdf), the Star's revenue was down from $33.1 to $29.3 million year over year, or a decline of $3.8 million. Costs are down from $77 million in FY 2015 to $63.1 in FY 2016, a savings of $13.9 million. During the same period, the Meteor's cost savings were $2.8 million, so it seems the diner cost slightly over $10 million to run. So Amtrak comes out ahead by about $6 million for the year. Even more interestingly, total sleeper revenue for the Star in FY 2015 was a little over $8 million, declining to $7.1 million in FY 2016, so every penny in sleeper revenue and then some went to paying for the diner.

You can also compare the Meteor's $1.4 million revenue drop to the Star's, and say that not all of the Star's revenue losses came from losing the diner, which makes the change even more in Amtrak's favor--then it becomes $2.4 million revenue decline compared to $10 million in savings. These numbers also all assume that both coach and sleeper passengers were scared away by the lack of diner, and if you look at the sleeper numbers in isolation, then since sleeper revenue dropped by about $950k maybe the diner is only actually worth ~$1 million of revenue? Some coach passengers choose (or chose) to eat in the diner, to be sure, but my own hunch is that sleeper passengers were much more inclined to avoid the Star without a diner than coach passengers.

In any case, the three values of the revenue worth of the diner I came up with were $3.8 million, $2.4 million, and $1 million, all against an operating cost of $10 million. I don't see any scenario in which Amtrak didn't win.

 

[dlagrua]

Getting away from the discussion above, I see a great challenge ahead for Mr. Moorman in getting proposed new routes opened. There are advocacy groups for a daily Cardinal like all aboard Ohio that is also pushing for new train service on part of the old PRR mainline which would route through Lima, Columbus, Ft Wayne, Valparaiso, Gary and on to Chicago. Then there is the old Sunset Route from NOL to ORL that needs to be reopened.

Lets hope that the incoming administration is not hampered by Congress going forward.

 

[west point]

One comparison of the STAR and Meteor may be this past Thanksgiving season. The Star kept its usual consist of 3 - 4 coaches and 2 sleepers. The Meteor on the other hand had up to 4 sleepers and 5 - 6 coaches. There were some days Meteor had 13 cars. Now that is not a complete parallel as there are different north and south Carolina stations. Plus the extra Tamps stations for the Star. Star did have a few more sell outs but with the restricted consist ? ?

If appears that on this dual service ( actually there is also the Palmetto ) routes there is requirements for both diner lite ( or just snacks ) and full service diners. The full service diners do suffer from enough diner crews and the inability to restock enroute and often exclude coach passengers due to lack of meals. There were several reports of same during Thanksgiving.

Note adding the Meteor and Palmetto riders together gives some indications but just what ?

 

[Ryan]

That raises a good point - Amtrak can (intentionally or not) put their fingers on the scale, so to speak, by altering consist lengths. Changing the available supply will shift the ridership and revenue numbers, so unless any of us have consistently tracked the consist length of both trains before and after the diner loss, the conclusions we draw will be potentially skewed...

 

[Seaboard92]

The palmetto if I remember right in thanksgiving peak season was also longer by a coach or two.

 

[JoeBas]

I don't understand why dining car service can't be evaluated like any other product Amtrak offers. .. But if it's a money loser, can't be fixed and it doesn't have a meaningful impact on ticket revenue, cut it, scrap it or contract it out and take it off the books.

By that reasoning, the trains should stop altogether. Now.

 

[Philly Amtrak Fan]

I don't understand why dining car service can't be evaluated like any other product Amtrak offers. .. But if it's a money loser, can't be fixed and it doesn't have a meaningful impact on ticket revenue, cut it, scrap it or contract it out and take it off the books.

By that reasoning, the trains should stop altogether. Now.

Big difference between providing train service (Amtrak's primary goal) and providing "better" meal service. Amtrak steaks should not be a requirement on Amtrak trains and something taxpayers should have to pay for when cafe car food is acceptable to many passengers.

 

[TiBike]

In any case, the three values of the revenue worth of the diner I came up with were $3.8 million, $2.4 million, and $1 million, all against an operating cost of $10 million. I don't see any scenario in which Amtrak didn't win.

Thanks, those are good numbers. Amtrak would have much better insight into the details, but it clearly supports the hypothesis that the cost of providing diner service is more than its value to passengers. Maybe a lot more. If a detailed internal analysis showed more or less the same thing, the next step would be for Amtrak to test the hypothesis by eliminating diner service on another route to see if the effect is duplicated. Or passengers surveys and other primary market research might tell them all they need to know.

If Moorman is in fact approaching Amtrak as a business and not as a government department, my bet is that we'll see less diner service over the coming year.

 

[crescent-zephyr]

What those numbers do not show is the long term effect that it has on ridership. I personally think consistent customer service is the #1 way to win long-term customers. After that... providing good quality food and beverage service should be the next priority. That doesn't have to mean full service dining cars, but I don't think any passengers are fully satisfied with the current offering on the City of New Orleans, Silver Star, Lakeshore, and Cardinal.

 

[Philly Amtrak Fan]

What those numbers do not show is the long term effect that it has on ridership. I personally think consistent customer service is the #1 way to win long-term customers. After that... providing good quality food and beverage service should be the next priority. That doesn't have to mean full service dining cars, but I don't think any passengers are fully satisfied with the current offering on the City of New Orleans, Silver Star, Lakeshore, and Cardinal.

Well I've been on the Lakeshore. At the time they did have the full dining car and menu but I only ate cafe car food and I was satisfied with the available food. Considering the limited space available in diner cars many coach passengers may not even get a chance to eat in the diner car (well it's usually available for breakfast, I know they take reservations for lunch and assign times for dinner). You think they're all not satisfied? Plus if you're a coach passenger the diner car prices can be twice as expensive than the cafe car. Not everyone on the Lakeshore or other LD train is a sleeper passenger with meals included. I'll be willing to bet you an Amtrak steak that plenty of LD passengers can live with cafe car food and don't have to have Amtrak steaks to enjoy the ride.