VIA announces new cars, amenity upgrades

[Bob Dylan]

Fact of Life: Amtrak ( and VIA) could Double the Cost of Tickets ( Sleeper and Coach)and would end up Losing Even More Money due to declining ridership!

Check out every " for profit" Luxury/Cruise Train that has tried to operate in this country by following that business model!

EVERY Form of Transportation in this Country and Canada would Vanish without Government Subsidies!

 

[Lawdude]

Get your armor out, you're gonna get drilled, and rightfully so, your "hypothesis" is wrong on several counts.........But it's too late for me to get specific.

I'm fine with that, but let's start here-- I realize a lot of railfan advocacy groups have all sorts of "explanations" about how sleeping car passengers aren't the problem, but instead of going there (which has been debated endlessly on the Internet), let's start at a different place: if Amtrak sleeper fares (including the free dining and the AGR points) are not significantly subsidized, does that mean that VIA is making a gigantic profit on their higher fares? And if so, is VIA charging a market-clearing price and Amtrak isn't?

In other words, I think I know what the price DIFFERENCE between VIA and Amtrak is telling us. If it's not telling us what I think it is, what IS it telling us?

 

[Lawdude]

Get your armor out, you're gonna get drilled, and rightfully so, your "hypothesis" is wrong on several counts.........But it's too late for me to get specific.

I'm fine with that, but let's start here-- I realize a lot of railfan advocacy groups have all sorts of "explanations" about how sleeping car passengers aren't the problem, but instead of going there (which has been debated endlessly on the Internet), let's start at a different place: if Amtrak sleeper fares (including the free dining and the AGR points) are not significantly subsidized, does that mean that VIA is making a gigantic profit on their higher fares? And if so, is VIA charging a market-clearing price and Amtrak isn't?

In other words, I think I know what the price DIFFERENCE between VIA and Amtrak is telling us. If it's not telling us what I think it is, what IS it telling us?

 

[Ryan]

Sleeping car passengers are less subsidized than coach passengers, they're not the problem.

The problem is expecting passenger rail to make a profit. It doesn't, and it won't. Neither do highways or airplanes. Everything is subsidized.

VIA charges a lot more, but their costs are a heck of a lot higher as well.

 

[jebr]

Considering that the Canadian (Toronto-Vancouver) had a $54M shortfall ($99M in costs, $45M in revenue) and the Empire Builder had roughly the same shortfall ($56M) but also had $72M in revenue but $129M in expenses, I think Amtrak is giving us the better "ROI" overall. This is especially true when considering that VIA required 46 cents per passenger mile of a subsidy, where Amtrak only requires 15.5 cents per passenger mile of a subsidy. I couldn't find a breakdown between sleeper subsidy and coach subsidy for VIA rail, but Amtrak requires slightly less subsidy per passenger mile for a sleeper passenger than a coach passenger (though it's only a couple cents' difference per mile...this is not in the monthly report, but I think NARP calculated this out somewhere.) However, this tells me that, unless somehow VIA is just making piles of money off of sleeper passengers and losing all their money on coach passengers, VIA is costing more than Amtrak, even on sleeper service.

(For sources, VIA Rail's annual report, page 7; Amtrak's September 2013 Monthly Report, page C-1.)

Also, VIA gives free sleeper rides too. So there's that.

As for "what it's telling us," I think it's telling us "it's a lot more expensive to do VIA's way than Amtrak's way." Because it sure isn't making more money. If you have actual facts to the contrary, "Lawdude," I'd be happy to see them.

 

[Guest]

Interesting discussion. Here are a few points to consider:

1. The difference in the ratio of sleepers to coach passengers on the Canadian transcontinental trains versus the US western long distance trains is nothing new. It goes back at least to the post-World War II streamliner era, if not to the beginning of service in the late 19th century. The 1950s Canadian carried 11 sleepers in the summer ( 3 of which ere tourist class) versus only 2 coaches.

2. The very high levels of subsidy required to run the Canadian transcontinental is also not new. It is a refection of the extremely seasonal market and low population density. Transcontinental trains have not been economic since the express and LCL freight business dried up, which dates in Canada to a very early decision to move all first class mail by air.

3 In the early 1960s the major sources of the losses on passenger services in Canada were the transcons. By the late 1960s 80 per cent of the operating losses were being subsidized by the Canadian government. In the early 1970s the government cut back its subsidy to CP by limiting sleeping car capacity to what could be accommodated by a single diner, two diners having been the norm in the peak season in the late 1960s. So at that time maximizing premium passengers evidently did not lower the total subsidy required

4. But the situation appears to be different today. VIA's land cruise strategy appears to produce enough incremental revenue to lower the subsidy compared to what it otherwise would have been. That is to say, if you look at the quarterly pattern of revenues and costs for the Canadian you will see that the premium sleeper traffic in the summer keeps the losses down compared to other times during the year. But it is a very short season, and the total traffic has never recovered tot he press 2008 recessions levels, due to the impact of the recession on overseas tourism. Hence the advice to ride while you can.

 

[neroden]

I've read a number of threads here about the prices charged by VIA. VIA is, as best I can tell, charging closer to cost for their services. Sleeping car services on Amtrak are enormously subsidized.

Not actually true. Amtrak sleeping car service is a tale of two systems: east of the Mississippi and west of the Mississippi. Typically, the price for a sleeper from New York to Chicago is higher than the price for a sleeper from Chicago to LA. NY-Chicago sleepers are definitely a profitable addition to a train (we're talking incremental cost here). I'm somewhat more suspicious of Chicago-LA sleepers.
Dining cars are never directly profitable, but you need them on long overnight runs even for coach service (50% of the LSL diner patronage is from coach), and you can only eliminate them by making the trains run faster or making them run on time.

The key thing one needs to understand when analyzing train service is that most of the costs are fixed costs. The cost is, largely, in running the train *at all*. Generally, the more full cars (sleeper or coach) you can tack on to the train, the better off you are. The more frequently you can run trains over the same route, the better off you are. Adding new infrequent-service routes, by contrast, is really problematic.

Given that VIA's losses on the Canadian are much worse than Amtrak's losses on any service, there's a big difference. Most likely, VIA simply can't get the passenger volume which Amtrak can.

The Canadian is currently a really long train at 16 or so revenue cars (counting the domes), but it's only running twice a week; if you divided that ridership over a daily route, it would only have 5 revenue cars (and that's optimistic). This is less capacity than the *shortest* of the daily Amtrak trains with sleepers (some have 4 cars in the off season, but they're bilevel), and is substantially shorter than the 9 revenue cars a day routinely travelling on the Lake Shore Limited.

Basically, the Canadian just doesn't seem to have the ridership. How much of this is chicken-and-egg (remove service, lose ridership) and how much is fundamental (it's empty out there!) I can't say for sure, though my bet is on the fundamentals.

 

[Amfleeter]

New info on the Canadian's new class that's coming this summer - VIA just released a pamphlet for Prestige.

http://www.viarail.ca/sites/all/files/media/pdfs/prestige/Rockies-Pacific_Toronto-Vancouver-Canadian_classes-and-trains-cars_pre-launch.pdf

Also, Sleeper Plus pax will continue to have access to the Park Car. +1 to VIA for not succumbing to over-classification with amenities. The relative inclusiveness of service and amenities compared to what came before is what I personally love about VIA and Amtrak, as someone who can't always afford to be in full price first class, except when it's on sale or I can catch a low bucket. It's something good that came out of government-owned passenger railroads.

 

[NorthCoastHiawatha]

Glad I got to ride the Canadian in its unadultrated form.

 

[Bob Dylan]

Too Rich for my blood, I'll stay with the 50& off/Express Fares in the off Season and keep on enjoying the Budd Cars in their original form!

Hopefully Amtraks Suits dont think this is a good idea and try it thus pricing even more out of the Sleepers!

 

[Anderson]

Too Rich for my blood, I'll stay with the 50& off/Express Fares in the off Season and keep on enjoying the Budd Cars in their original form!

Hopefully Amtraks Suits dont think this is a good idea and try it thus pricing even more out of the Sleepers!

Nah, that's what Iowa Pacific is there for.

Honestly, if Amtrak could get a bunch of cars to run something like this on a few trains it would be a net positive (and indeed, in season there are some trains this sort of thing would work well on). There's a reason that you've had operators like AOE (which ran for about two decades before the company was shut down due to problems outside their travel business) and IP around for a long, long time. Amtrak has, for a host of reasons (relating more to politics than anything, though for more than just the most obvious reasons) fought back against working with such a market...there was an attempt to establish regular excursions, I believe by American Express on the Crescent in the mid-80s, that Amtrak blocked once they started becoming too frequent. Iowa Pacific has dealt with similar issues.

There are several concerns that have come up:

(1) The "others" could "show up" Amtrak in terms of service quality.

(2) The "others", if they turned a profit, would trigger pressure on Amtrak with respect to their own sleeper service (i.e. "If they can turn a profit why can't you?").

(3) Working with the "others" might trigger attacks over Amtrak being subsidized for their benefit.

(4) The "others" might provide viable competition and you could get into a bid-out situation on some routes (i.e. could you imagine what would happen if Iowa Pacific successfully bid on running, say, the Empire Builder?).

Number 4 is probably the most irritating since that concern has, quite bluntly, been informing Amtrak's handling of old rolling stock (wanting to scrap it instead of selling it to other operators). It is also causing other issues (in a nutshell, in the Fleet Strategy Plan Amtrak claims they want to build up a domestic passenger rail equipment market...while implicitly trying to remain the only operator around).

 

[CHamilton]

Via rolls out rooms with double bed on Vancouver-Toronto train

Via Rail is beginning to offer its new Prestige service on its flagship Vancouver-Toronto train, The Canadian. It’s Via’s version of first class.

The biggest reasons why you might want this option: a double bed and your own private shower.

 

[Swadian Hardcore]

For $5k one-way? Not sure why anybody would do it unless they are filthy rich! I'd say a Section, Roomette, Bedroom, or Drawing Room would be fine for me.

The article is attempting to compare fares with Air Canada Victoria-Toronto instead of Vancouver-Toronto...

 

[jebr]

Honeymoon. That's what this appears to be geared towards.

 

[jis]

Honeymoon. That's what this appears to be geared towards.

They'll now need to boost the wedding industry to boost ridership

 

[Blackwolf]

Nuptuals in the Park Car?

 

[Anderson]

I got the pleasure of enjoying the new accommodations this past weekend (ok, I didn't get to use them, but they were given a dry run). I've been informed (by Those Who Know) that the main target is Asian tourists with way too much money to spend. That explains a ton about the decor, among other things.

As I understand it, Via's hope is to use the new service to cross-subsidize increased frequency on the route. Bear in mind that a full Prestige service (7 BRs plus the Master Room) equates to something $45,000 one-way ($5k/room plus $10k for the Master Room), which is likely a non-trivial boost in revenue (and the number likely gets juicier if they can sell it on both sides of Jasper).

 

[Bob Dylan]

Won't Canada's version of John Mica in Parliament have a hissy fit? ( all countries have these self appointed show boats!)

And that's some pricey train ride, I'd rather put that kind of money into several different trips but alas will never have that kind of bucks!

 

[Anderson]

Won't Canada's version of John Mica in Parliament have a hissy fit? ( all countries have these self appointed show boats!)

And that's some pricey train ride, I'd rather put that kind of money into several different trips but alas will never have that kind of bucks!

Surprisingly not...though there's always an outside risk it gets "Rocky Mountaineered".