What would you cut?

[killthebill]

If you had to eliminate one line, which one would it be and why?

My guess is the Cardinal, because it only operates thrice weekly to begin with, and it doesn't serve any major cities that are not already served.

Is there a plan within Amtrak's management for trimming service if the budget fails?

 

[mtburb]

My guess is the Cardinal, because it only operates thrice weekly to begin with, and it doesn't serve any major cities that are not already served.

You forgot Cincinnati (and whenever the Hoosier State is discontinued, Indianapolis as well).

 

[Advocate]

An odd topic for passenger train advocates. None of the meager services should be cut, only increased. The anti-rail lobby often asks this question, and they would like to cut the weakest service, and then next year they can cut the weakest service, and then next year. . . .

 

[KmH]

Yep.

Go the other way with the Cardinal - make it a daily.

I would rather the route of the Cardinal from CHI to WAS than the Capitol Limited route.

 

[PerRock]

Well if we're basing off lines that don't run that often, I'd say the Sunset East...

peter

 

[twa904]

I know I will be attacked for this, but I say something has to be done about wages and benefits.

Looking at the Feb 15 Performance report for the fiscal year so far ticket revenue is $863.3 mil.

Wages and benefits are $881 mil. That is 102% of ticket revenue to pay wages and benefits.

In there 2014 annual report Delta Airlines wage and benefits was 28% of ticket sales. Rev was 28,688 Bil and wages were 8,120 Bil.

I know from reading other post here today there are some people not making a lot, but someone is making a killing.

 

[Ryan]

Or there just isn't as much revenue.

 

[MikefromCrete]

Nice to have Rep. Mica and Denham joining the conversation. As an a rail advocate, the last thing I want to talk about is ending service. Oh, and let's cut people's salaries. Yeah, let's have engineers, conductors, dispatchers, etc. make minimum wage. That will improve everything. Honestly, there is no way to cut your way to improved or more profitable services. It always results in disaster.

 

[killthebill]

Sorry I didn't mean for it to sound antirail although I can see how it does. I just meant as a kind of last resort situation that's all. I just looked at the system and tried to figure out where the least useful route was. The problem with the Cardinal and Cincinnati is that it gets there in the middle of the night so pretty useless. Also the rest is just West Virginia. Like I said the major cities (DC, NY, Chicago) are already served. I guess I just don't see the function of the route. Maybe if it offered more connections to other cities that aren't served now that would help.

 

[Bob Dylan]

Yeah, if we'd just get rid of those expensive wages, pensions and benefits and follow the Wal-Mart/Fast Food Biz Model, Amtrak could rake in profits of hundreds of millions

and the Mica Managers in Congress could relax!

I'm always amazed when people bash the workers that actually do the work, and don't say a thing about the Koch Brothers and other modern day Robber Barons!

 

[the_traveler]

Speaking of wages, the CEOS of NON-PROFITS (like Red Cross, United Way, Salvation Army, etc...) make around $1 MILLION a year! Yet, most people are volunteers.

And remember that the employees at Amtrak are not "just the faces you see on the train". They also include ticket agents, reservation agents, train cleaners, maintenance workers, engine shop employees, etc...!

 

[twa904]

http://www.careerbliss.com/amtrak/salaries/

I don't know how old this info is. The average salary is $61,000. When you add benefits I wonder what is would bring the total to.

 

[FormerOBS]

Hmmm. A cleaner (does that mean a coach cleaner?) makes more than an LSA. And the coach cleaner sleeps at home every night. This would be more instructive if more detail were provided about those who make ABOVE that average $61 K.

Tom

 

[FormerOBS]

"...the rest is just West Virginia." If the residents of West Virginia know about this post, you probably ought to avoid the area for a while.

They probably won't appreciate losing direct service from their State Capital to Washington DC. What they need is daily service. A faster transit of Indiana. Maybe a revision of the schedule to provide more daylight in the best scenery. I don't know what problems would need to be overcome to accomplish this.

Tom

 

[Bus Nut]

An odd topic for passenger train advocates. None of the meager services should be cut, only increased. The anti-rail lobby often asks this question, and they would like to cut the weakest service, and then next year they can cut the weakest service, and then next year. . . .

Amtrak losses go up when they run less trains ... so if you want to "save the system", you need to run more service, not less. Next.

 

[Bus Nut]

I'm always amazed when people bash the workers that actually do the work,

Me too.

 

[twa904]

I'm always amazed when people bash the workers that actually do the work,

Me too.

I do not mean to bash any workers. I just don't know of any company that can continue to pay out 102% of ticket revenue and survive. Can you.

 

[Bob Dylan]

I'm always amazed when people bash the workers that actually do the work,

Me too.

I do not mean to bash any workers. I just don't know of any company that can continue to pay out 102% of ticket revenue and survive. Can you.

Yeah, its called the U S Government and it's not going anywhere, no matter the fantasies of the anti-government lunatics! Amtrak is part of the Government ( the Supremes new release should clarify this), do people really want it to go away?

 

[jis]

I'm always amazed when people bash the workers that actually do the work,

Me too.

I do not mean to bash any workers. I just don't know of any company that can continue to pay out 102% of ticket revenue and survive. Can you.

Of course they can. Off the top of my head the highway department and the armed forces come to mind. As long as someone is willing to pay the difference between direct revenue and cost they can survive quite nicely.

 

[jphjaxfl]

When Amtrak was being developed in 1970 we were told they would have to cut much of the existing passenger train service on May 1, 1971, but after Amtrak was organized some of the discontinued service would be reinstated. For the most part that didn't happen and then there were more cuts in 1979. Once passenger train service has been discontinued and infrastructure abandoned, it will likely never return. After 5 years or so, those who might use a passenger forget that it was a option. Even if they tried to reinstate the Sunset LTD east of New Orleans, its been almost 10 years since the thrice weekly train ran, so it has been for the most part (except for railfans) forgotten. The Amtrak system is so skeletal now that if you abandoned long routes, you may as well abandon the entire system except for the various corridors.

 

[northnorthwest]

When Amtrak was being developed in 1970 we were told they would have to cut much of the existing passenger train service on May 1, 1971, but after Amtrak was organized some of the discontinued service would be reinstated. For the most part that didn't happen and then there were more cuts in 1979. Once passenger train service has been discontinued and infrastructure abandoned, it will likely never return. After 5 years or so, those who might use a passenger forget that it was a option. Even if they tried to reinstate the Sunset LTD east of New Orleans, its been almost 10 years since the thrice weekly train ran, so it has been for the most part (except for railfans) forgotten. The Amtrak system is so skeletal now that if you abandoned long routes, you may as well abandon the entire system except for the various corridors.

Does this mean you believe rail will never return to the US? Are we looking at the "best" we can get? I certainly hope not. Why is it that rail seems to have no lobby? Why do people expect airlines to take them places but not trains? How can we change the culture?

 

[afigg]

I do not mean to bash any workers. I just don't know of any company that can continue to pay out 102% of ticket revenue and survive. Can you.

For starters, your numbers are a bit distorted as they are from the February report. Ridership drops off in January and February with lower ticket revenue, so the Year-To-Date numbers in February are coming off of the two worse months of the fiscal year for losses. If you really want to discuss the revenue versus personnel costs ratio, you should use the September 2014 monthly report which has the totals for the entire fiscal year of 2014 and gets away from the distortions from looking at just peak and valley seasons.

For FY2014, ticket revenue was $2,148.1 million, food & beverage sales were $125.7 million, state supported train revenue $238.5 million, and Other Revenue was $772 million. State supported train revenue is operating subsidies and capital payments for the rolling stock for the state corridor routes, so we'll regard that as government money. Other Revenue is a catch-all for income from property owned by Amtrak (rental income from the stations owned by Amtrak, lease payments, air rights, etc), trackage rights, payments from the commuter agencies, extra income for outside work done by the maintenance facilities, and so on.

But if you want to compare market revenue income versus salaries, wages & benefits, the revenue should be the total of ticket revenue + food & beverage sales + other revenue. Passengers paid for food & beverage and other revenue is the income from the other aspects of owning a railroad and some of the stations which is capturing the value presented by the passengers taking the trains. The total of those three revenue streams for FY2014 was $2,995.8 million. The total paid in Salaries, Wages, and Benefits was $2,096.4 million for 70% of market revenue. Still a big piece, but well short of the 102% ratio.

If you look at Amtrak as a transit agency which receives government subsidies, similar to the NY MTA, WMATA, SEPTA, MBTA, its cost recovery is quite good. if you want to compare Amtrak to the passenger airlines, then you have to take into account that the airline business is structured quite differently. The airlines didn't have to raise capital to buy large tracts of land and build the airports, state & local governments did that. The state & local governments acquired the land, issued low interest rate government backed bonds to pay for building & expanding the airports, and don't collect property taxes on the publicly owned airport land. The airlines may pay for and own some of the terminal buildings, hangers, and facilities at the airports along with the access & landing right fees for using the airports, but that is a big difference from having to buy thousands of acres of property and build an airport out of their own pockets. When comparing air travel to Amtrak or railroads back when they ran passenger trains, there are fundamental differences in how the underlying infrastructure was paid for and by who.

 

[Guest]

Rail is here to stay in the USA. If a route volume really decreases where trains were empty of course the routes should be cut. Passenger load is reported on a month to month basis by Amtrak per train and if a route was underperforming and losing significant passengers over a long period of time then obviously it should be targetted for a cut.

Lots of people use commutter rail in the USA with record volumes and overcrowding in various markets. Amtrak has seen growth on some markets.

The routes to cut would be any routes going forward where Amtrak loses significant customers and losses and has no chance for a turnaround.

But on the flip side, Amtrak should have a decent customer base with lower operating costs and increased revenues going forward and lots of routes have potential for the future.

Remember, car traffic is way up as well as aviation traffic and trains are also needed. Even bus traffic is up with a lot of low cost firms and new Amtrak bus connections. You can not get by without passnger rail and some corridors are in need of improvement.

If you take any route which has had a steep decline of traffic consistently it could be cut however. As for names, one can look at the performance report for several months out and choose the ones with the steep loses but it would need to be more than just seasonal or temporary loses.

Florida is one area where Amtrak should not cut routes and there is growth with private sector rail and better connections for Amtrak coming online and possibily even new Amtrak stations in the future would make sense.

 

[StriderGDM]

What would I cut? Perhaps a Ford Class aircraft carrier. Or a next generation boomer sub.

Oh wait.. you mean Amtrak...

It's really hard to cut your way to profitability. Sometimes it can be done, but all too often not.

Someone brought up wages compared to revenue. As was pointed out that comparison isn't necessarily accurate. But also, there's another way to look at it.

Take the Crescent. It operates effectively two trains a day through Atlanta, about 12 hours apart. From what I can tell, there's probably 4-5 people employed there. My guess is, even if they're not full time (and they probably are, 4 hours for before/after arrival of each train) they're probably paid competitive wages. You really can't pay them less.

But let's say you added an ATL-WAS day train that arrived an hour later (or earlier, details aren't critical) than the existing train in the opposite direction (i.e in the morning it would depart ATL for WAS and in the evening it would arrive in ATL while the Crescent would continue its opposite schedule). You'd need no more people, but you'd be using them twice as effectively.

The trick, at least in some cases will be to figure how to use the same number of people more effectively.

One thing that will certainly happen over the next year or two is all the maintenance hours spend on heritage baggage and dining cars will be freed up. Either folks will be cut (bad for them, but may be good for Amtrak's expenses) or those same people assigned to other maintenance duties that perhaps mean keeping MORE cars available more often, which means more passengers. So again, you'll end up using the same staff to possibly move more people. More people means more revenue.

So what would I cut? Very little. If I had my way, I'd add, not cut.

 

[Guest]

The lowest performing routes are Hoosier and Cardinal. Hoosier was scheduled for cutbacks as of April 1st and Im not sure if it was officially terminated or what the status is. So Amtrak has been on the ball tweaking its network as appropriate.

The Amtrak team is really good and open and accountable with its data and should be concentrating on growth markets while phasing out the waste and is doing such.