Major Shift in Silver Service Coach Buckets

[Anderson]

Some of you probably remember the detailed analysis I did on the Silver Service fares, comparing the listed fares from 1967 under the ACL's table with Amtrak's fares early this year. Well, I was inspired to do a little check:

ORL-WAS LB, March 2011: $101 coach/$296 roomette

ORL-WAS HB, March 2011: $225 coach/$583 roomette

ORL-WAS LB, January 2012: $115 coach/$317 roomette

ORL-WAS HB, January 2012: $256 coach/$616 roomette

The coach buckets moved by about 13% ($14 for low bucket, $31 high bucket); the roomette buckets moved by a little over 7% and about 5.6% ($21/$33, respectively), but most of that was "buried" in the coach movement (net of the coach shift, the cost increase for the roomette was $7/$19).

13% is big for a one-year move, but what jumps out at me is that the hike was directed at where I spotted the biggest discrepancy from the old fares. It is going to be interesting to see how this trend plays out over the next few years. It also stands out because Amtrak has noted that they've had to add a coach to the Meteor whenever they can.

I'm going to initiate some tracking on a few other major city pairs (CHI/WAS, CHI/NYP, CHI-LAX, and CHI-EMY in particular) with the new year, even if I don't post it all here (given Amtrak's hostility to their fares being posted all over the place). However, keeping hard data on a few pairs is going to definitely be interesting going forward, given what seems to be going on.

 

[Oldsmoboi]

For those of us who didn't see the old post, What was the discrepancy from the old fares?

 

[Trogdor]

(given Amtrak's hostility to their fares being posted all over the place).

Where has there been hostility from Amtrak regarding their fares being posted?

 

[Anderson]

It's what I was told when I suggested doing a lot of fare tracking on here by Alan. Apparently, they don't even like Amsnag's presence.

Here is the old thread, but I included the 2011 fares above (since IIRC those were freshly-checked Amsnag listings) alongside the "January 2012" fares (which are for next month).

Another bit of analysis: The LD revenues are likely to pick up slowly because of more advance bookings (i.e. folks who did what I did and booked their Christmas vacations several months out), but they're likely to trend up over the course of the year.

 

[Devil's Advocate]

Cue all the "Amtrak doesn't need whiners like you!" posts. :lol:

Personally, I find that pricing increases which outpace inflation by three or four fold are rather surprising.

The trains are full, at least where I travel.

Mostly this can be explained by increases in one or more of Amtrak's usual passenger pools.

Folks who live/work where rural air service has become more limited or expensive.

Folks who are too big to fit in a conventional airline seat.

Folks who are scared of flying.

Folks who need to travel at late notice and cannot afford walk-up airfare.

Folks without a vehicle or whose vehicle is in the shop or who own an inefficient vehicle.

Folks with disabilities that make car travel and airport navigation difficult.

Folks who are so busy running away they don't notice the TSA is following in their footsteps.

Folks who consider train travel a hobby.

Folks who support passenger rail as a matter of principle.

Folks who wish to transport recreational drugs.

And so on...

But 13% is indeed a big jump and I'll be the fist to admit I did not expect Amtrak's fares to be this price elastic. It should be interesting to see if this trend continues to hold up into the future as well. If it does I wonder what will happen to Amtrak's political support. Maybe it will improve. Or maybe Amtrak will be defunded at the very height of its popularity. Won't that be a laugh riot?

 

[Anderson]

Texas:

I don't mind the increases and I'm not complaining. I'm observing what's going on and keeping tabs on it...and do remember that I'm the guy who harps on per-passenger revenue as a key indicator of Amtrak's performance. If anything, if Amtrak can make this sort of hike stick in multiple places...well, let's just say that shrinking losses in the LD arena can't help but help Amtrak's bottom line.

Also, do remember to add another market that Amtrak is acquiring:

Folks who live in a major city where multiple airlines are pulling service because of low demand.

 

[Oldsmoboi]

The fare increase ties in nicely with the story earlier today about airlines cutting service and raising prices. It appears there is still room for Amtrak to maneuver on pricing.

 

[Devil's Advocate]

I don't mind the increases and I'm not complaining. I'm observing what's going on and keeping tabs on it...and do remember that I'm the guy who harps on per-passenger revenue as a key indicator of Amtrak's performance. If anything, if Amtrak can make this sort of hike stick in multiple places...well, let's just say that shrinking losses in the LD arena can't help but help Amtrak's bottom line. Also, do remember to add another market that Amtrak is acquiring:Folks who live in a major city where multiple airlines are pulling service because of low demand.

Yeah, I know you're not actually complaining, but neither is every person that gets repeatedly harped for mentioning steep price increases that are essentially indisputable. -_-

The fare increase ties in nicely with the story earlier today about airlines cutting service and raising prices. It appears there is still room for Amtrak to maneuver on pricing.

Most of what I've been seeing are simply reductions in capacity and frequency. Not outright discontinuations. Of course they'd have to literally cut thousands of daily flights to push air travel down to anywhere near the skeleton network that Amtrak currently operates.

 

[Oldsmoboi]

We've lost our direct flight on Southwest from Pittsburgh to Philly. Cut completely. Airtran is threatening to cut direct flights to LGA.

US Airways responded by increasing the full price Y fair PGH-PHL by 400%.

 

[Anderson]

I don't mind the increases and I'm not complaining. I'm observing what's going on and keeping tabs on it...and do remember that I'm the guy who harps on per-passenger revenue as a key indicator of Amtrak's performance. If anything, if Amtrak can make this sort of hike stick in multiple places...well, let's just say that shrinking losses in the LD arena can't help but help Amtrak's bottom line. Also, do remember to add another market that Amtrak is acquiring:Folks who live in a major city where multiple airlines are pulling service because of low demand.

Yeah, I know you're not actually complaining, but neither is every person that gets repeatedly harped for mentioning steep price increases that are essentially indisputable. -_-

The fare increase ties in nicely with the story earlier today about airlines cutting service and raising prices. It appears there is still room for Amtrak to maneuver on pricing.

Most of what I've been seeing are simply reductions in capacity and frequency. Not outright discontinuations. Of course they'd have to literally cut thousands of daily flights to push air travel down to anywhere near the skeleton network that Amtrak currently operates.

Well, I think a point should be made that we're seeing substantial moves in that direction, and have been seeing them for some time now, at least in the expanded NEC. I'd point out the clunky connections that the state of Virginia noted in some of their reports for flying from the southern part of the state to places up north (cue redirects through Pittsburgh and Detroit en route). Moreover, the shift to larger planes, while more efficient on a per-seat basis, is likely to result in frequency cuts as a result.

It might not get as far as Amtrak is currently, but part of what I suspect you're going to see is a sharp decline in convenience.

I'll add a serious question: Is any airline out there considering bringing back multi-stop flights to fill some planes? Southwest's business model seems to lean in this direction, so I'm surprised that with some markets like this, airlines aren't looking at running flights via secondary destinations (i.e. Detroit to Philly via Pittsburgh with no change of plane).

 

[Cho Cho Charlie]

IMHO, there is nothing wrong with Amtrak attempting to move fares up to match its own costs. Let's be honest here, Amtrak isn't making embarrassing large profits. If anything, Amtrak is more about having embarrassing large losses.

Clearly, fares lag costs by more than 13% overall. And over the past couple of years, fuel costs alone could account for that 13% increase, though I am sure there are many other factors too. If I could compare, overall costs to go on an ocean cruise have increased around that much too.

Amtrak isn't being mean by raising fares, especially on routes that can successfully bare such increases.

 

[afigg]

Well, I think a point should be made that we're seeing substantial moves in that direction, and have been seeing them for some time now, at least in the expanded NEC. I'd point out the clunky connections that the state of Virginia noted in some of their reports for flying from the southern part of the state to places up north (cue redirects through Pittsburgh and Detroit en route). Moreover, the shift to larger planes, while more efficient on a per-seat basis, is likely to result in frequency cuts as a result.

It might not get as far as Amtrak is currently, but part of what I suspect you're going to see is a sharp decline in convenience.

I'll add a serious question: Is any airline out there considering bringing back multi-stop flights to fill some planes? Southwest's business model seems to lean in this direction, so I'm surprised that with some markets like this, airlines aren't looking at running flights via secondary destinations (i.e. Detroit to Philly via Pittsburgh with no change of plane).

Perhaps I should save this comment for the Airlines Retrenching thread, but the reduction in frequency of flights to the smaller city airports will significantly hurt the income for those small airports. Fewer flights with larger airplanes, means less income from take-off and landing slots. Higher ticket prices means fewer passengers using the airport with falloffs in projected parking, car rental, store sales, etc revenue. Which in turn, means that a lot of smaller airport authorities will struggle to maintain payments on the municipal bonds they floated to pay 100s of millions in upgrades to their airport terminal and runways to attract more airline business. I expect that over the next decade or two, we will see a lot of smaller and medium sized airports go into a state of decay because they can't afford the upkeep reminiscence of the decay of many passenger train stations in the 1950s and 60s. Meanwhile passenger train travel will make a slow and anything but smooth revival. Sustained oil prices of above $100/barrel and higher will have a significant effect on airline travel as the fuel hedges expire. Fuel costs are a huge chunk of the operating costs for a commercial airline. A city the size of Roanoke and distance from the big city airports could be a good example of an airport which will see significant service reductions and ever higher ticket prices.

As for multi-stop flights, fuel economy has a lot to do with it being far less common. The jet airplane burns a lot of fuel in taxiing, taking-off, and landing. Crusing at a level high altitude is the only fuel efficient part of the flight. More economical to cram as many paying passenger into one airplane, take all of them to the hub airport or destination in a single flight than to make multiple stops picking or discharging passengers along a route.

As for the Silver Service price increases, Amtrak is clearly getting pretty aggressive in price increases for the LD and NEC trains. This is driven much by their limited capacity and not just politics. If Amtrak can still come close to filling the limited number of coach seats and sleeper rooms with the higher prices, why shouldn't they? Until more capacity in the form of new equipment arrives, raising ticket prices will be the main way to keep the revenue increasing ahead of costs, whether we like it or not.

 

[me_little_me]

Also, do remember to add another market that Amtrak is acquiring:

Folks who live in a major city where multiple airlines are pulling service because of low demand.

Folks who want to travel when airplanes are grounded or seriously late.

 

[Anderson]

afigg,

Following on what you're saying (and yes, this probably belongs in that other thread, but we're here already so...why not?), what are the chances that one or more cities have an airport either go bankrupt or get forcibly liquidated (for the underlying land)? I ask because from what you're saying, it sounds like at least a few airports may not be able to cover operating costs if the falloff in air traffic is bad enough, and at some point you're going to get an airport in a midsize city that is (in so many words) worth more dead than alive.

 

[user 1215]

So, is the cost of the Texas Eagle jumping 13%? Especially in the Summer, it seems to be sold out frequenly.

 

[Anderson]

So, is the cost of the Texas Eagle jumping 13%? Especially in the Summer, it seems to be sold out frequenly.

I do not have hard numbers from last year, but if the last MPR is any indication, the survey says "No". PPR seems to be off by a noticeable amount on the Eagle year-over-year for September...but this seems to be a product of them adding cars more than anything. It's possible that the buckets moved and they just got locked to low buckets more often, or that they added the car CHI-STL and a lower share of traffic being through traffic did it.

 

[afigg]

afigg,

Following on what you're saying (and yes, this probably belongs in that other thread, but we're here already so...why not?), what are the chances that one or more cities have an airport either go bankrupt or get forcibly liquidated (for the underlying land)? I ask because from what you're saying, it sounds like at least a few airports may not be able to cover operating costs if the falloff in air traffic is bad enough, and at some point you're going to get an airport in a midsize city that is (in so many words) worth more dead than alive.

It won't happen quickly, but if airlines cut back on service frequencies to smaller to mid-sized airports, many of those airports will find it increasingly difficult to make payments on their bonds and maintain the airport facilities. The airport authorities that have loaded up on bonds and debt to build fancy new terminals and facilities, extend runways, in anticipation of air traffic and passenger growth that fails to occur, will struggle to pay off those bonds. I expect in a few years we will see a big push to expand direct subsidies to the airlines to fly to the small to mid-sized airports, which of course will be rather ironic, but those subsidies will prove seriously expensive and inadequate as the oil price and supply crunches hit. The airport authorities will work to stave off bankruptcies, but there will be many smaller and medium market airport with empty concourse wings, empty or underutilized parking garages, and a lot of capacity that will never be used. The money spent and that will be spent on many of those airports would be better spent on intercity passenger rail. The economics of airline travel are very dependent on oil and fuel prices, much more so than trains. But this is getting well OT for this thread.

Could tie this back to the increased Amtrak ticket prices to say, that in my opinion, Amtrak will have the opportunity in the next decade to take market share back from the airlines in many smaller cities and towns that are several hundred miles or more from the big city airports.

 

[Devil's Advocate]

So, is the cost of the Texas Eagle jumping 13%? Especially in the Summer, it seems to be sold out frequenly.

This is but a single anecdotal data point, but I've seen the nominal cost of average coach and sleeper tickets nearly double for my most traveled city pair over the last few years. A formerly common $79 coach fare is much rarer now and often goes for as much as $150 today. A roomette that used to cost less than $200 all-in now routinely prices in the $375 range. At first glance you'd think that Amtrak must be doing well if they're able to get such prices to stick and still keep the trains full. Maybe if they triple ticket costs they'll finally be able to break even. -_-

 

[The Davy Crockett]

It won't happen quickly, but if airlines cut back on service frequencies to smaller to mid-sized airports, many of those airports will find it increasingly difficult to make payments on their bonds and maintain the airport facilities. The airport authorities that have loaded up on bonds and debt to build fancy new terminals and facilities, extend runways, in anticipation of air traffic and passenger growth that fails to occur, will struggle to pay off those bonds. I expect in a few years we will see a big push to expand direct subsidies to the airlines to fly to the small to mid-sized airports, which of course will be rather ironic, but those subsidies will prove seriously expensive and inadequate as the oil price and supply crunches hit. The airport authorities will work to stave off bankruptcies, but there will be many smaller and medium market airport with empty concourse wings, empty or underutilized parking garages, and a lot of capacity that will never be used. The money spent and that will be spent on many of those airports would be better spent on intercity passenger rail. The economics of airline travel are very dependent on oil and fuel prices, much more so than trains. But this is getting well OT for this thread.

And since we are so far OT already, I'll be brief, but here is a radically new idea: How about regulating the airlines in a manner that gives them large enough profits on their busy routes so that some of those said profits can subsidize less traveled routes!?! :wacko:

Oh wait... :giggle:

 

[Oldsmoboi]

Pittsburgh International (only such because you can get one of two direct flights to Toronto and seasonal service to Paris) has already closed the entire E-Terminal. 50% of B-terminal is closed and over 50% of A-terminal is closed. We're not some rural airport, we have 2.5 million people in the area, plus we get travelers from Northern West Virginia and South Eastern Ohio.

 

[Devil's Advocate]

San Antonio International (same important sounding but largely irrelevant name as Pittsburgh) recently built a brand new terminal to replace an older terminal that was fully renovated and looked great. After all the expensive construction and demolition the city gained no additional capacity. Not even a single extra gate. Nothing. Nada. What a waste.

 

[Anderson]

Olds: I think that "International" is often an overblown label that every airport likes to stick on itself, appropriate or not. Washington National notwithstanding, if an airport says anything but "International", I tend to suspect that it's a rinky-dink rural airport.

How many terminals are there at Pittsburgh International? I'm guessing five (of which two are effectively closed), but sometimes letters get skipped and/or there could be an "F" terminal as well.

 

[Bob Dylan]

San Antonio International (same important sounding but largely irrelevant name as Pittsburgh) recently built a brand new terminal to replace an older terminal that was fully renovated and looked great. After all the expensive construction and demolition the city gained no additional capacity. Not even a single extra gate. Nothing. Nada. What a waste.

Austin-Bergstrom INTERNATIONAL (ABI) can top that, we have Zero/NADA/Zilch International Flights now, :wacko: yet there are literally hundreds of Blue Shirted TSA Agents hanging out in the Terminal even though there are only two Security CheckPoints in use with an average wait of 30 minutes to get through the long lines! This allows TSA "Inspectors" to come over to the Amtrak Station and hang out watching the Eagle board/deboard but I have yet to see them actually perform any "Secuirity" functions unless talking on a Cell and Smoking is now a Security Function?? Austin has plans to expand the Terminal and runways at a cost of Billions, but where the $$$ will come from is a Big Question that no-one can answer???? :help:

 

[Oldsmoboi]

Olds: I think that "International" is often an overblown label that every airport likes to stick on itself, appropriate or not. Washington National notwithstanding, if an airport says anything but "International", I tend to suspect that it's a rinky-dink rural airport.

How many terminals are there at Pittsburgh International? I'm guessing five (of which two are effectively closed), but sometimes letters get skipped and/or there could be an "F" terminal as well.

Your guess is correct. There are 5.

 

[Oldsmoboi]

San Antonio International (same important sounding but largely irrelevant name as Pittsburgh) recently built a brand new terminal to replace an older terminal that was fully renovated and looked great. After all the expensive construction and demolition the city gained no additional capacity. Not even a single extra gate. Nothing. Nada. What a waste.

Austin-Bergstrom INTERNATIONAL (ABI) can top that, we have Zero/NADA/Zilch International Flights now, :wacko: yet there are literally hundreds of Blue Shirted TSA Agents hanging out in the Terminal even though there are only two Security CheckPoints in use with an average wait of 30 minutes to get through the long lines! This allows TSA "Inspectors" to come over to the Amtrak Station and hang out watching the Eagle board/deboard but I have yet to see them actually perform any "Secuirity" functions unless talking on a Cell and Smoking is now a Security Function?? Austin has plans to expand the Terminal and runways at a cost of Billions, but where the $$ will come from is a Big Question that no-one can answer???? :help:

Is there demand for expansion? If there is some airline that wants access but can't get it, I'd understand, but if, like Pittsburgh, there are completely un-used gates, why expand anything?

We used to have great service here in Pittsburgh. There were direct flights to London, Paris, Frankfurt (Bayer and Siemens are huge here), and also LA and SFO. Once we lost hub status with US Airways, all of that changed and you've now got to go to Philly or Charlotte to get anywhere else. Even direct flights to Chicago are slim pickings (usually only American, barf), which made it even easier to sell the Cap. Ltd. to my boss.