Can Private Railroads operate passenger service without government help?

[Sullen Maximus]

Perhaps the way this could be done is that the government would lease the tracks from the host railroad, in lieu of lease payments the owning railroad would get free access whereas other railroads would have to pay access charges. The government would take over the management and costs of dispatching and maintenance, probably at least initially contracting with the owner railroad to provide this service. This would be attractive to the owning railroad as they would be relieved of the expenses of track maintenance and dispatching. The only downside to them is there would now be open access for passenger and other freight companies, although they would have to pay access charges.

Not going to lie, that just sounds like nationalized lines, with more steps involved. The reality is that there is a reason why almost no other countries operate rail lines like this. The closest is the UK, but it's more like the inverse of what you said. Basically the government owns the track, and they take bids from private companies to lease the sections of the track, however this hasn't worked out particularly well. You can watch a whole documentary explaining why it doesn't work well here.

The reality is that when it comes to passenger rail, it needs to be federally supported, with the option for privatization. The reason is that there are just too many times where you're going to have locations, times, or segments that aren't profitable. This is the exact reason despite 60% of airlines being unprofitable, we support them with tax $. That being said, you don't want to prevent private passenger rail, as many times that is faster to respond to new markets. The only way you can really keep that going, is with nationalized lines. the Private companies can claim them priority, but it is literally against their own existence to do so.

 

[Sullen Maximus]

There were changes to allow privatized operators and no takers. I don’t recall the details. I believe that Amtrak still had to franchise it. The dispatching issue is vastly overblown. It is interesting that the Sunset Limited has been running largely on time since the STB filing. There isn’t a point to the debate since it’s not like UP is bringing back the City of Los Angeles anytime soon.

Who would have thought... filing a federal complaint with the STB magically made most of the issues with UP intentionally screwing over passenger rail not happen anymore.... If there was one rail line that needs to have it's entire network federalized, it's UP....

 

[BlackDiamond]

Not going to lie, that just sounds like nationalized lines, with more steps involved. The reality is that there is a reason why almost no other countries operate rail lines like this. The closest is the UK, but it's more like the inverse of what you said. Basically the government owns the track, and they take bids from private companies to lease the sections of the track, however this hasn't worked out particularly well.

Well, not exactly. Network Rail which is a government entity owns and maintains the infrastructure and the various Train Operating Companies (TOC) pay fees to access paths on the network. In some cases more than one TOC operates over the same line. Many countries in Europe seem to be moving in the direction of Open Access where the government owns the infrastructure and various companies pay to operate on it, for example we have the Austrian Nightjet operating sleeper trains across Germany, Switzerland, Czechia, etc.

 

[toddinde]

Well, not exactly. Network Rail which is a government entity owns and maintains the infrastructure and the various Train Operating Companies (TOC) pay fees to access paths on the network. In some cases more than one TOC operates over the same line. Many countries in Europe seem to be moving in the direction of Open Access where the government owns the infrastructure and various companies pay to operate on it, for example we have the Austrian Nightjet operating sleeper trains across Germany, Switzerland, Czechia, etc.

Britain is going to a new system called Great British Rail which will again have the government more involved. When Labour gets in, they’ll renationalize.

 

[cirdan]

Well, not exactly. Network Rail which is a government entity owns and maintains the infrastructure and the various Train Operating Companies (TOC) pay fees to access paths on the network. In some cases more than one TOC operates over the same line. Many countries in Europe seem to be moving in the direction of Open Access where the government owns the infrastructure and various companies pay to operate on it, for example we have the Austrian Nightjet operating sleeper trains across Germany, Switzerland, Czechia, etc.

and indeed some instances of private companies owning the tracks and leasing them to passenger and freight train companies. Eurotunnel comes to mind. Then there are also mixed ownership lines. I understand some of the Spanish high speed lines have banks and other investors as minority owners, although the state owns the majority stake and so basically calls the shots.

 

[cirdan]

Britain is going to a new system called Great British Rail which will again have the government more involved. When Labour gets in, they’ll renationalize.

And so the yoyo continues.

Speaking as one who remembers British Rail in the 1980s, it was rather poorly run back then. There is still plenty to complain today but back then BR seemed to be mainly about managing decline and letting things rot slowly. Every year passenger numbers were down and every year a couple of lines would be closed down. Since privatisation passenger numbers have shot through the roof, and hardly any lines have closed.

 

[jis]

And so the yoyo continues.

Speaking as one who remembers British Rail in the 1980s, it was rather poorly run back then. There is still plenty to complain today but back then BR seemed to be mainly about managing decline and letting things rot slowly. Every year passenger numbers were down and every year a couple of lines would be closed down. Since privatisation passenger numbers have shot through the roof, and hardly any lines have closed.

And several lines have been reopened IIRC. One that comes to mind is the Tweedbank line from Edinburgh.

 

[Metra Electric Rider]

And several lines have been reopened IIRC. One that comes to mind is the Tweedbank line from Edinburgh.

And they seem to be both reopening old stations and creating new ones at the rate of a couple each year.

 

[Sullen Maximus]

And so the yoyo continues.

Speaking as one who remembers British Rail in the 1980s, it was rather poorly run back then. There is still plenty to complain today but back then BR seemed to be mainly about managing decline and letting things rot slowly. Every year passenger numbers were down and every year a couple of lines would be closed down. Since privatisation passenger numbers have shot through the roof, and hardly any lines have closed.

They also gave UK the highest average train tickets in Europe. Also, It was never full private as companies kept going under, and every time one did, the government just picked up the tab.

 

[cirdan]

They also gave UK the highest average train tickets in Europe. Also, It was never full private as companies kept going under, and every time one did, the government just picked up the tab.

The UK already had the highest prices in Europe when BR was in charge.

Actually if you break it down, the extortionate prices today are mostly for peak-hour travel into and out of London. If you're a bargain hunter and don't mind adapting your travel plans to when the tickets are cheap, you can find many a bargain.

 

[Charles785]

OK - we've heard about the challenges in interesting any of the freight railroads in running a high quality passenger train - and we know how Amtrak in recent years has seemed to favor the northeast corridor and state-supported routes over the long distance service, but what about raising this question?

If the demand exists - and if the service could be priced to produce adequate revenue - would it be within the realm of possibility that Amtrak could add a train that provided the luxury of, say, the former Santa Fe Super Chief with sleeper cars only and five-star quality fine dining with onboard chefs.

Could there indeed be a profitable market for such an extra-fare passenger train that might, perhaps, run weekly from Chicago to the west coast?

 

[BlackDiamond]

OK - we've heard about the challenges in interesting any of the freight railroads in running a high quality passenger train - and we know how Amtrak in recent years has seemed to favor the northeast corridor and state-supported routes over the long distance service, but what about raising this question?

If the demand exists - and if the service could be priced to produce adequate revenue - would it be within the realm of possibility that Amtrak could add a train that provided the luxury of, say, the former Santa Fe Super Chief with sleeper cars only and five-star quality fine dining with onboard chefs.

Could there indeed be a profitable market for such an extra-fare passenger train that might, perhaps, run weekly from Chicago to the west coast?

Given Amtrak's mandate to provide a nationwide passenger rail service to all, I suspect a service like this would not be favorably looked at even if it were profitable, as it would divert scarce resources to providing a service for a few wealthy people. Also the track record of various companies such as American Orient Express that tried something similar is not encouraging.

 

[jphjaxfl]

When Amtrak took over US Passenger Trains on May 1, 1971, the only route that operated on Union Pacific tracks was the Chicago to Oakland train the used UP to get from Denver to Ogden. Of course SP was a separate railroad at that time and a number of lines were operated by Amtrak. There was a reason that UP had so few Amtrak trains.....they didn't want passenger trains.
Since Amtrak began there have been no regular passenger trains on the UP line from Omaha to Cheyenne.

 

[cirdan]

Given Amtrak's mandate to provide a nationwide passenger rail service to all, I suspect a service like this would not be favorably looked at even if it were profitable, as it would divert scarce resources to providing a service for a few wealthy people. Also the track record of various companies such as American Orient Express that tried something similar is not encouraging.

True.

Also it would risk cannibalizing the existing market for sleeping car passengers on the SWC.

 

[Bostontoallpoints]

OK - we've heard about the challenges in interesting any of the freight railroads in running a high quality passenger train - and we know how Amtrak in recent years has seemed to favor the northeast corridor and state-supported routes over the long distance service, but what about raising this question?

If the demand exists - and if the service could be priced to produce adequate revenue - would it be within the realm of possibility that Amtrak could add a train that provided the luxury of, say, the former Santa Fe Super Chief with sleeper cars only and five-star quality fine dining with onboard chefs.

Could there indeed be a profitable market for such an extra-fare passenger train that might, perhaps, run weekly from Chicago to the west coast?

Via Rail essentially does this with the Canadian. It does have coach class but that ticket costs $500 one way and doesn't include meals. A sleeper ticket in a berth starts at $800, a roomette for one is $1600. All sleeper accommodations are always sold out. It only runs twice a week and it still loses money.

 

[crescent-zephyr]

All sleeper accommodations are always sold out

When I rode the Canadian this summer there were several sleeper accommodations available the day of. I kept my $200 coach ticket instead of paying $1,200 for an upper berth. Bonus.. the coach dome is ideal for watching the signals drop, a fun memory as a kid riding the old amtrak City of New Orleans when they still had domes!

I think the Iowa Pacific / Pullman Rail Journeys was a good idea - the one time I rode it I was very happy. If Amtrak would work with (instead of against) a service like that I think they could sell it on a weekly basis very easily.

 

[jimdex]

I think the Iowa Pacific / Pullman Rail Journeys was a good idea - the one time I rode it I was very happy. If Amtrak would work with (instead of against) a service like that I think they could sell it on a weekly basis very easily.

Well, I believe Amtrak did work with Iowa Pacific. Weren't Iowa Pacific sleepers attached to the City of New Orleans for a while? Before that, American-European Express hooked its cars on Amtrak trains. And I seem to recall that Amtrak experimented with running a form of luxury service before: a special parlor car on the Pennsylvanian, complete with an attendant and special meals. As much as I would have liked to see these experiments succeed, none of them lasted very long.

 

[crescent-zephyr]

Well, I believe Amtrak did work with Iowa Pacific. Weren't Iowa Pacific sleepers attached to the City of New Orleans for a while? Before that, American-European Express hooked its cars on Amtrak trains. And I seem to recall that Amtrak experimented with running a form of luxury service before: a special parlor car on the Pennsylvanian, complete with an attendant and special meals. As much as I would have liked to see these experiments succeed, none of them lasted very long.

Amtrak did not work well with Iowa Pacific - that's why the cars were mostly on the City of New Orleans and not on more popular routes - they wanted to hit the New York market but Amtrak wouldn't work with them. Even then they managed to make a name for themselves and fill up the cars. The Pullman service itself was popular - but there were many other issues with Iowa Pacific sadly. Which is a shame.. those cars were BEAUTIFUL. I just wish I had ridden more times when I had the chance but glad I didn't miss it.

I almost forgot about that AOE era where they tried that.. that was after it was bought and renamed "Grande Luxe" and the days were limited from the beginning of that operation.

 

[Urban Sky]

Via Rail essentially does this with the Canadian. It does have coach class but that ticket costs $500 one way and doesn't include meals. A sleeper ticket in a berth starts at $800, a roomette for one is $1600. All sleeper accommodations are always sold out. It only runs twice a week and it still loses money.

Passenger revenues of the Canadian recovered 102.1% of direct operating costs in 2017 and cost-recovery has rebounded again post-Covid to 78.8% in 2022. This means that the train is very profitable during the summer season (April-October), when the overwhelming majority of passengers travel, while it loses money only during the winter, where it mainly operates to fulfill VIA’s mandate to serve remote communities and to act as an equipment shuttle between the maintenance centers in Vancouver, Winnipeg and Toronto and its termini in Jasper (Skeena) and Sudbury (White River)…

 

[Sullen Maximus]

When Amtrak took over US Passenger Trains on May 1, 1971, the only route that operated on Union Pacific tracks was the Chicago to Oakland train the used UP to get from Denver to Ogden. Of course SP was a separate railroad at that time and a number of lines were operated by Amtrak. There was a reason that UP had so few Amtrak trains.....they didn't want passenger trains.
Since Amtrak began there have been no regular passenger trains on the UP line from Omaha to Cheyenne.

UP has also been BY FAR been the most difficult, and horrible rail line to work with. Amtrak failing would be the greatest thing to happen to UP since the golden spike

 

[Willbridge]

UP has also been BY FAR been the most difficult, and horrible rail line to work with. Amtrak failing would be the greatest thing to happen to UP since the golden spike

It was amusing to find out that when the UP took over the SP, they put passenger services under the former SP people. When I heard that (and met one), I knew that someone in Omaha had a perverse sense of humor.

In the early days of the Pioneer the operating crews were provided by the UP and the service was run smartly. Pass travel by family members was more generous then, and someone once told me that if their spouse was on a train that was mis-dispatched, the issue would be taken to the top.

 

[Anderson]

Passenger revenues of the Canadian recovered 102.1% of direct operating costs in 2017 and cost-recovery has rebounded again post-Covid to 78.8% in 2022. This means that the train is very profitable during the summer season (April-October), when the overwhelming majority of passengers travel, while it loses money only during the winter, where it mainly operates to fulfill VIA’s mandate to serve remote communities and to act as an equipment shuttle between the maintenance centers in Vancouver, Winnipeg and Toronto and its termini in Jasper (Skeena) and Sudbury (White River)…

I didn't realize it got there in 2017 (I recall it going into the black during a few summers, but not it getting all the way there). Having said that, IIRC the Alaska RR is in a similar boat (though winter demand there was also rising pre-pandemic - for a few years they were running winter service 2-3x/wk for about half the winter; right now they're running a second round-trip during 8 weeks and a third during 5 of those weeks, but IIRC this expanded into December/January pre-pandemic).

[I'll just note that there's a decent case that if the train were close to "profitability", more frequencies would probably help that. The tourist market may be somewhat finite (though not being handcuffed to two departures per week can't help but help there), but I suspect that with how infamously expensive air travel is in Canada and how lousy driving is up there in the winter, there's at least some market to tap into.]

 

[MARC Rider]

It should be pointed out that modern corporations do not really want to have operations that recover their costs and maybe make a small surplus, they want their returns on investment to be as high as possible to cover the 7 or 8 figure compensation packages of the top executives and keep activist investors at bay. For years I've read about large retail chains closing locations that, while profitable, aren't profitable enough for the corporate overlords who make the financial decisions. The modern railroad industry, with its emphasis on "operating ratios", is a particularly good example of this. A passenger train that merely recovers its direct operating costs might be OK for a government funding agency but would be of absolutely no interest to modern corporate America.

 

[crescent-zephyr]

The modern railroad industry, with its emphasis on "operating ratios", is a particularly good example of this. A passenger train that merely recovers its direct operating costs might be OK for a government funding agency but would be of absolutely no interest to modern corporate America.

Which is one of the reasons that railroads should be run by the government - it's part of the transportation infrustructure of the country - it shouldn't be operated like a chain of coffee shops.

 

[Devil's Advocate]

Speaking as one who remembers British Rail in the 1980s, it was rather poorly run back then. There is still plenty to complain today but back then BR seemed to be mainly about managing decline and letting things rot slowly. Every year passenger numbers were down and every year a couple of lines would be closed down. Since privatisation passenger numbers have shot through the roof, and hardly any lines have closed.

Correlation ≠ causation. Battleaxe tried to privatize everything but strategic sheep islands, private companies left infrastructure to rot to untenable levels, and then the government had to re-nationalize the upkeep again. It has taken decades of effort and many billions to fix what the privatization hath wrought.

Also the track record of various companies such as American Orient Express that tried something similar is not encouraging.

When I looked at what actually happened to many private passenger rail companies it was often a severe external setback (like the the 70's oil crisis, the 80's savings and loan implosion, the 90's dot com bubble, the 2001 travel collapse, the 2008 mortgage default, the 2020 pandemic, etc.) that did them in. The core idea seems to have a market with willing customers, but either does not make enough or does not save enough to survive extended market downturns.