Why is Amtrak coach more expensive than flying?

[Anderson]

Pulling up some hard numbers, for the FY12 budget for Amtrak, I get the following breakdown on expenses:

Salaries, Wages, and Benefits: $1,889.3m of which:

Salaries: $263.5m

Wages/OT: $998.1m

Emp. Benefits: $600.1m

Emp. Related: $27.6m

Train Operations: $271.8m

Fuel, Power, & Util.: $369.5m

Materials: $200.6m

Facility, Communication, & Office: $176.6m

Advertising and Sales: $80.4m

Depreciation: $671.4m

Professional Fees: $78.1m

Data Processing: $118.1m

Other Non-Labor Fees/Services: $11.8m

Total Expenses: $3,867.6m

In short, fuel is less than 10% of Amtrak's overall budget (and a bit over 10% once you exclude depreication). For an airline, this number is usually over 30% (35% has often been cited, but I forget at what price point that was at for fuel).

Now, what this means (in essence) is that if Amtrak had the cars, it would behoove them to lengthen trains by adding as many coaches (and sleepers) as the market would bear. Fuel is a relatively fixed cost for Amtrak, and on top of that, it simply isn't a large component in the same way it is for the airlines...this is also part of why airlines take spikes in fuel costs so hard.

 

[Ryan]

Sad, but true. If Amtrak refuses to do what it takes to be profitable, why should taxpayers subsidize train-enthusiasts' land-cruises?

Because Amtrak isn't in the business of providing land-cruises. Amtrak provides a transportation service and should be subsidized just like the roads and airlines are.

 

[PRR 60]

Pulling up some hard numbers, for the FY12 budget for Amtrak, I get the following breakdown on expenses:

Salaries, Wages, and Benefits: $1,889.3m of which:

Salaries: $263.5m

Wages/OT: $998.1m

Emp. Benefits: $600.1m

Emp. Related: $27.6m

Train Operations: $271.8m

Fuel, Power, & Util.: $369.5m

Materials: $200.6m

Facility, Communication, & Office: $176.6m

Advertising and Sales: $80.4m

Depreciation: $671.4m

Professional Fees: $78.1m

Data Processing: $118.1m

Other Non-Labor Fees/Services: $11.8m

Total Expenses: $3,867.6m

In short, fuel is less than 10% of Amtrak's overall budget (and a bit over 10% once you exclude depreication). For an airline, this number is usually over 30% (35% has often been cited, but I forget at what price point that was at for fuel).

Now, what this means (in essence) is that if Amtrak had the cars, it would behoove them to lengthen trains by adding as many coaches (and sleepers) as the market would bear. Fuel is a relatively fixed cost for Amtrak, and on top of that, it simply isn't a large component in the same way it is for the airlines...this is also part of why airlines take spikes in fuel costs so hard.

The impact of fuel and power on Amtrak finances is a little more serious than that. The problem is that Amtrak only covers about 47% of its total expenses from ticket revenue. The remaining income items used to break even - largely federal and state subsidy payments - are fixed. Amtrak only has control over the ticket revenue, which in FY11 was $1,851.5 million. In FY11, the actual fuel and power expense was $337.8 million. Looking at it that way, fuel and power accounted for just over 18% of ticket revenue. Any increase in fuel and power costs during the fiscal year can only be offset by increased ticket revenue. A 20% increase in fuel and power costs, roughly $70 million, would have to be offset by a roughly 4% increase in ticket revenue. While this is not quite as critical to Amtrak as it is to airlines (where fuel costs are about 30% of ticket revenue), there is no doubt that fluctuations in fuel and power costs are significant issues for Amtrak. In the past, sharp increases in energy costs have had a negative impact on Amtrak finances.

 

[pldenc44]

So for trains the best economy is clealy to offer a decent level of comfort. It can do so at prices competitive with uncomfortable air travel, and that will make a share of the market which is not too time sensitive choose the train. Of course this equation (time, price, comfort, accessibility) changes for individual routes, making some more successful than others and for indivdual persons or even different situations the same person is taking the journey in.

I'm not getting it wrong. Amtrak is getting massacred in the market share battle because nobody wants to pay the same as airfare to get there in double the time. Simple as that. Americans would run to trains if they saved time or money... they do neither. If you're going to take 2x the time to get somewhere, it better be a LOT cheaper than flying or driving. This isn't my opinion, its the opinion of most Americans who don't EVER ride Amtrak but fly regularly. Amtrak is not successful. This is why they have to beg congress for so many millions each year. Yes I know all transportation is subsidized, but we all know Amtrak is FAR more subsidized per mile traveled.

This all makes me very depressed because I would love to ride the train instead of drive but it doesn't make financial sense. If Amtrak's costs are mostly wages and equipment, then they will have to figure out how to function with less staff and get more use out of their equipment. It sounds like they need more coach cars. Ridership is on a steady increase over the past couple years. Lets get them some more cars and drop the price! Americans will run to trains if they are affordable. THAT merits a government subsidy. If Amtrak brings lower cost transportation to Americans, I say give them all the cash they need to continue operating. We're not there yet though... something has to change.

 

[Devil's Advocate]

Yes I know all transportation is subsidized, but we all know Amtrak is FAR more subsidized per mile traveled.

Source?

 

[afigg]

Pulling up some hard numbers, for the FY12 budget for Amtrak, I get the following breakdown on expenses:

...

Fuel, Power, & Util.: $369.5m

...

The impact of fuel and power on Amtrak finances is a little more serious than that. The problem is that Amtrak only covers about 47% of its total expenses from ticket revenue. The remaining income items used to break even - largely federal and state subsidy payments - are fixed. Amtrak only has control over the ticket revenue, which in FY11 was $1,851.5 million. In FY11, the actual fuel and power expense was $337.8 million. Looking at it that way, fuel and power accounted for just over 18% of ticket revenue. Any increase in fuel and power costs during the fiscal year can only be offset by increased ticket revenue. A 20% increase in fuel and power costs, roughly $70 million, would have to be offset by a roughly 4% increase in ticket revenue.

...

The Fuel, Power and Utilities lumps together 3 categories, only one of which is diesel fuel costs, so it does not present the full picture.

The power costs for the NEC are more stable as electric power costs have not greatly increased because the primary fuel sources of electrical power are coal, natural gas, nuclear, hydro. The price of natural gas in recent years has fallen, although the current very low prices are temporary. Same goes for Utilities which appears to be the overall utilities (power, water, etc) cost for the stations, offices, maintenance facilities that Amtrak owns and operates which are separate from train operations.

The FY12 Comprehensive Business Plan provides a breakdown of the final FY12 budget costs with $208.8 million for diesel fuel, $110.7 million for Propulsion (NEC and Keystone East), and $49.7 million for Utilities. The plan also has a 5 year history with previous Diesel fuel costs: FY08 $214.3M, FY09 $119.5M (big drop), FY10 $147.4M, FY11 $182.5M. The FY12 budget diesel fuel costs is based on a cost per barrel of $105, so Amtrak is likely to exceed the diesel fuel budget for the year depending on how their fuel hedge contracts are structured. The electrical propulsion costs have ranged from $100.6M for FY09 to $110.7M budgeted for FY12.

So proportion of diesel fuel costs for FY11 was $182.5 million against total ticket revenue of $1,851 million, but that also includes NEC revenue. Revenue should include Food & Beverage of $109.4 million for FY11 as that comes from passengers. Then there is the other revenue category of $565 million which includes commuter operations & NEC use income, commercial rents. (Note: don't know if the diesel fuel costs for Amtrak commuter contracts are bundled into the Diesel fuel category.) These are not state or federal subsidies, so they are part of the revenue picture. So, if we are taking a simplified approach - which does have some meaning - the diesel fuel cost proportion over direct revenues was $182.5 million over ($1851.1M + $109.4M + $565.0M) or 7.2% of total revenue.

Problem is that to do this right, we should separate the NEC only revenue and propulsion costs from the ticket revenue earned by the non-NEC corridor and LD trains and their diesel fuel costs. We could do a rough approximation, but I don't feel like parsing out the numbers from the financial and monthly reports myself. There are cost and revenue number breakdowns in the 2010 PIP reports on the specific LD trains that may be more relevant.

 

[PRR 60]

Yes I know all transportation is subsidized, but we all know Amtrak is FAR more subsidized per mile traveled.

Source?

Not 100% up-to-date, but pretty close.

2009 Passenger-Miles by Mode (US DOT)

Air travel: 552 billion (11.3%)

Highway travel: 4,236 billion (87.3%)

Transit (rail and bus): 54 billion (1.1%)

Intercity rail (Amtrak): 6 billion (0.1%)

DOT Budget (FY2010 enacted) - $76.9 billion

Federal Aviation Administration - $16.0 billion (21.0%)

Federal Highway Administration – $42.8 billion (55.6%)

Federal Transit Administration - $10.7 billion (13.9%)

Federal Railroad Administration - $4.4 billion

- Amtrak - $1.6 billion (2.1%)

Other programs - $3.0 billion

Federal subsidy per passenger mile:

Air travel – 2.8 cents

Highway travel – 1.0 cent

Transit – 18.8 cents

Amtrak – 26.7 cents

 

[Ryan]

What happens to those numbers when you add in all the state and local funding that goes towards road subsidies?

 

[lmctrouble]

If passenger rail is ever going to thrive, they better start figuring out how to offer tickets at half the price of the airlines. More seats per coach, more cars per consist.

My son and I are going round trip from Toledo, OH to Williamsburg, VA for $245 on Amtrak (with a small detour to King George to spend a few days with a friend) - I couldn't get a round trip plane ticket for ONE person at that price. I'd much rather spend the night sleeping on the train than go through security, pay outrageous baggage fees and have crappy customer service.

 

[Anderson]

I'm going to throw out a hypothesis on the SCL situation at A-Day: Seaboard was turning a profit on its Florida services, if only barely. The RF&P, however, may have been substantially in the hole on their segments and have been unwilling to not join Amtrak for that reason. This, in turn, would fit in well with the comment I think I once saw about Seaboard worrying about having to do transfers at Richmond rather than Southern's transfers at DC, since for example, I believe that the pre-Amtrak Crescent went past DC while a transfer was forced in DC post-A-Day.

 

[saxman]

If passenger rail is ever going to thrive, they better start figuring out how to offer tickets at half the price of the airlines. More seats per coach, more cars per consist.

Except that people are already filling the seats that are available, and then some. If they offered tickets at half of what they are charging now, Amtrak would simply that revenue. Sure they might get a few people to come over, but those few people coming over won't make up for the lost revenue. The fact is that Amtrak trains are full now. When demand is high you raise the price, not lower it. Obviously if people are willing to pay the price that Amtrak is offering, they are doing something right. Revenue and ridership continue to go up.

It be nice if Amtrak had to the money to buy more cars, so they can collect even more revenue, but those cars are a huge capital expense. We'd have a thriving intercity passenger rail system today, if it weren't for the billions in subsidies we began putting into railroads' competition, the highway. Or at least put it all on a level playing field from the start.

 

[saxman]

...and then I remember Spirit Airlines wanting to, at one point, charge a fee for carry-on luggage. Oops.

Spirit still does this.

 

[Ziv]

I am still interested in the idea of Amtrak converting some of the Superliners to Couchette class cars and if my measurements are right, they could fit 10 compartments with 4 bunks in the same space that now has 5 bedrooms and 10 roomettes. So they would have room for 40 couchette passengers in the space that fits 10 bedroom passengers and 20 roomette passengers.... Not sure that there would be enough demand for a 'second class' sleeper with 4 people in it if the prices weren't at least 20% less than the roomette prices. I know I would pay a 20% premium over coach to have a bunk but I don't know that competing with the Superliners 62 passengers up top would work for the bottom line. 40 paying a 20% premium over 62 paying standard coach prices doesn't look profitable. Rats. Maybe lay flat seats in an upgrade section of the car that costs less than a roomette? They would need another 4" of space in front to give you the room a lay flat seat needs if I remember the article on that type of seating in airliners. What if Amtrak took out one row of seats behind the staircase and put in 16 lay flat seats instead of 18 regular seats? And charged 15% more for them? I really like LD train travel but I just can't stomach the price of a roomette most of the time. I went around the world by train 8 years ago and the only place it was hard to find overnight berths is in the US. It all comes down to cost, I know, but options would be cool.

 

[GAT]

I am still interested in the idea of Amtrak converting some of the Superliners to Couchette class cars and if my measurements are right, they could fit 10 compartments with 4 bunks in the same space that now has 5 bedrooms and 10 roomettes. So they would have room for 40 couchette passengers in the space that fits 10 bedroom passengers and 20 roomette passengers.... Not sure that there would be enough demand for a 'second class' sleeper with 4 people in it if the prices weren't at least 20% less than the roomette prices. I know I would pay a 20% premium over coach to have a bunk but I don't know that competing with the Superliners 62 passengers up top would work for the bottom line. 40 paying a 20% premium over 62 paying standard coach prices doesn't look profitable. Rats. Maybe lay flat seats in an upgrade section of the car that costs less than a roomette? They would need another 4" of space in front to give you the room a lay flat seat needs if I remember the article on that type of seating in airliners. What if Amtrak took out one row of seats behind the staircase and put in 16 lay flat seats instead of 18 regular seats? And charged 15% more for them? I really like LD train travel but I just can't stomach the price of a roomette most of the time. I went around the world by train 8 years ago and the only place it was hard to find overnight berths is in the US. It all comes down to cost, I know, but options would be cool.

Half a century ago, I rode across Canada in what I think were called Pullman sleeper coaches. Daytime, a regular coach. Nighttime, the seats converted to beds,and an upper berth dropped down. Everything was protected from the aisle by drop curtains. Long distance coach passengers don't need the privacy of rooms or couchettes, but they could benefit from a place to lie down flat and pehaps take off their "street" clothes in private, and would probably be willing to pay a small premium for that.

 

[Texan Eagle]

I am still interested in the idea of Amtrak converting some of the Superliners to Couchette class cars and if my measurements are right, they could fit 10 compartments with 4 bunks in the same space that now has 5 bedrooms and 10 roomettes. So they would have room for 40 couchette passengers in the space that fits 10 bedroom passengers and 20 roomette passengers.... Not sure that there would be enough demand for a 'second class' sleeper with 4 people in it if the prices weren't at least 20% less than the roomette prices. I know I would pay a 20% premium over coach to have a bunk but I don't know that competing with the Superliners 62 passengers up top would work for the bottom line. 40 paying a 20% premium over 62 paying standard coach prices doesn't look profitable. Rats. Maybe lay flat seats in an upgrade section of the car that costs less than a roomette? They would need another 4" of space in front to give you the room a lay flat seat needs if I remember the article on that type of seating in airliners. What if Amtrak took out one row of seats behind the staircase and put in 16 lay flat seats instead of 18 regular seats? And charged 15% more for them? I really like LD train travel but I just can't stomach the price of a roomette most of the time. I went around the world by train 8 years ago and the only place it was hard to find overnight berths is in the US. It all comes down to cost, I know, but options would be cool.

Half a century ago, I rode across Canada in what I think were called Pullman sleeper coaches. Daytime, a regular coach. Nighttime, the seats converted to beds,and an upper berth dropped down. Everything was protected from the aisle by drop curtains. Long distance coach passengers don't need the privacy of rooms or couchettes, but they could benefit from a place to lie down flat and pehaps take off their "street" clothes in private, and would probably be willing to pay a small premium for that.

Couchettes would be nice, but if that is not happening, give me just a coach seat that reclines full-flat, similar to modern Business class seats on international flights and I'd be a happy traveler. No doors or curtains or any other fancy stuff needed.

 

[amamba]

Couchettes would be nice, but if that is not happening, give me just a coach seat that reclines full-flat, similar to modern Business class seats on international flights and I'd be a happy traveler. No doors or curtains or any other fancy stuff needed.

I think this is such an intriguing idea. Could it be called "business class" or something to differentiate from coach? If the previous poster was correct, only a few seats would need to be removed from the coach to have another pitch between the seats to accomplish this. It sounds like that could be profitable in the long run if a premium charge were added to the fare.

 

[jis]

I'm going to throw out a hypothesis on the SCL situation at A-Day: Seaboard was turning a profit on its Florida services, if only barely. The RF&P, however, may have been substantially in the hole on their segments and have been unwilling to not join Amtrak for that reason. This, in turn, would fit in well with the comment I think I once saw about Seaboard worrying about having to do transfers at Richmond rather than Southern's transfers at DC, since for example, I believe that the pre-Amtrak Crescent went past DC while a transfer was forced in DC post-A-Day.

Post A-Day Southern Crescent continued to run to New York under the pre-Amtrak agreement between PC and Southern, which Amtrak continued to honor. Same as the case with the Silvers and Champion. Of course the latter were Amtrak trains post-A-Day.

Really Amtrak has not very often been hopelessly nasty to collaborating with private operators to run trains. Yes there have been cases of such but nothing like what URPA would like to have us believe. Right now they are in the process of entering into a joint ticketing arrangement with S&NCR. It would be suicide for them to start being nasty with private operators at this point in time.

 

[Ziv]

With a proper cite going out to WRJensen, I will quote him below. Basically, Amtraks 50" pitch is very close ( he thought it was 56" but wiki begs to disagree and the Acela is only 42") to what some airline 'lie-flat' seating in which the seat folds out so that it is nearly flat, but at a 15 degree up angle, so you tend to slide down in the seat if you are completely flaked out.

_ what is funny about those 777 seats is that they are listed as 55" seat pitch because they are not true lay flat. (Seat Pitch is the distance from any point on one seat to the exact same point on the seat in front or behind it.)http://www.seatguru....g_777-200_B.php

 

If you wanted to be a true lay flat like SIA (they are nice I have seen them) :http://www.seatguru.com/airlines/Singapore_Air/Singapore_Air_Boeing_777-300ER.php

it would be a 71" seat pitch

 

Superliners are listed as 56" Seat pitch.

FRA list the Regional Coach as 42"

So if you put 55" Seat pitch on a regional coach you could get about 13 rows of 3 or 39 seat.

A 71" seat pitch would be 10 rows or 30 seats. _

But if you put lie-flat at an angle into a Superliner, they might fit ok but you would tend to slide down in the seat at night, and even the angled ones are 5 or 6" longer than the Superliner pitch so you would have to remove a row of seats to get 50" and split that 50 between 9 pairs of seats to make enough room for it. So you would lose 11% of the seats in that section so you would need to increase the price for 'lie-flat at an angle' by at least 15% to make up for lost revenue. Sounds good to me! I used to wake up in the morning kind of sore from sleeping at a 45 degree angle. Not bad, just not fully rested.

 

[zephyr17]

I am still interested in the idea of Amtrak converting some of the Superliners to Couchette class cars and if my measurements are right, they could fit 10 compartments with 4 bunks in the same space that now has 5 bedrooms and 10 roomettes. So they would have room for 40 couchette passengers in the space that fits 10 bedroom passengers and 20 roomette passengers.... Not sure that there would be enough demand for a 'second class' sleeper with 4 people in it if the prices weren't at least 20% less than the roomette prices. I know I would pay a 20% premium over coach to have a bunk but I don't know that competing with the Superliners 62 passengers up top would work for the bottom line. 40 paying a 20% premium over 62 paying standard coach prices doesn't look profitable. Rats. Maybe lay flat seats in an upgrade section of the car that costs less than a roomette? They would need another 4" of space in front to give you the room a lay flat seat needs if I remember the article on that type of seating in airliners. What if Amtrak took out one row of seats behind the staircase and put in 16 lay flat seats instead of 18 regular seats? And charged 15% more for them? I really like LD train travel but I just can't stomach the price of a roomette most of the time. I went around the world by train 8 years ago and the only place it was hard to find overnight berths is in the US. It all comes down to cost, I know, but options would be cool.

Half a century ago, I rode across Canada in what I think were called Pullman sleeper coaches. Daytime, a regular coach. Nighttime, the seats converted to beds,and an upper berth dropped down. Everything was protected from the aisle by drop curtains. Long distance coach passengers don't need the privacy of rooms or couchettes, but they could benefit from a place to lie down flat and pehaps take off their "street" clothes in private, and would probably be willing to pay a small premium for that.

Those are Pullman "sections" Canada still has them. They were largely phased out in the US in the 50s. The price was and is closer to private accomodations than coach. What was cheaper was the "slumbercoach" which provided small rooms at a lower price.

Doubt the couchette/common sleeping area would catch on in the US.

 

[Devil's Advocate]

Doubt the couchette/common sleeping area would catch on in the US.

Why?

 

[WICT106]

Doubt the couchette/common sleeping area would catch on in the US.

Why?

I think part of the reason is that our culture is a bit different than many of the European countries, in that our expectations of Privacy and personal space are greater than many Europeans.

 

[Devil's Advocate]

Doubt the couchette/common sleeping area would catch on in the US.

Why?

I think part of the reason is that our culture is a bit different than many of the European countries, in that our expectations of Privacy and personal space are greater than many Europeans.

If privacy and space are the core issues then how can we explain the millions of American coach passengers that put up with ZERO privacy and NO personal space?

 

[Texan Eagle]

Doubt the couchette/common sleeping area would catch on in the US.

Why?

I think part of the reason is that our culture is a bit different than many of the European countries, in that our expectations of Privacy and personal space are greater than many Europeans.

I have heard this argument several times whenever the topic of economic sleeping accommodation comes up, and it begs a question- if for once I accept your point that the expectations of Americans of privacy and personal space are greater than Europeans and Asians (?) and they would never accept sleeping in any thing that is less than a private room, so does that mean people in America never travel by planes? All those transcontinental and international flights with Business Class and First Class must be running so empty out of America, no? I wonder why there are so many international airports and airplanes in this country then.

 

[Ziv]

All I know is, if there was a way to sleep economically and comfortably on Amtrak, more people would use it for overnight trips. (Roomettes aren't what I think of as economical and the coach seats aren't comfortable for sleeping.)

Full stop.

 

[jis]

Actually you seem to be a bit confused about seats in International Business Class on United Airlines. The seats they claim to be lie flat are actually completely flat and have a pitch of 76" not 56". See this at Seatguru. Having used one I can tell you from first hand experience that they are actually lie flat, no 15 degree angle.

AFAIK they do not claim their 55" pitch Worldwide Business Class seats to be lie flat. See this at Seatguru.

In addition United's ex-Continental 777s have very nice full lie flat seats at 60" pitch in a herringbone pattern, that I have used often and love. No 15" angle or anything, it is absolutely flat and you convert it from the sitting mode to the lie flat mode without even getting out of the seat! See this in Seatguru.

I think this last kind of seat would work quite well in trains if someone were to give it a try.

The ex-Continental 767s still have those 15 degree cotnraptions, which I hate for obvious reasons. But they will be gone by the end of the year.

With a proper cite going out to WRJensen, I will quote him below. Basically, Amtraks 50" pitch is very close ( he thought it was 56" but wiki begs to disagree and the Acela is only 42") to what some airline 'lie-flat' seating in which the seat folds out so that it is nearly flat, but at a 15 degree up angle, so you tend to slide down in the seat if you are completely flaked out.

_ what is funny about those 777 seats is that they are listed as 55" seat pitch because they are not true lay flat. (Seat Pitch is the distance from any point on one seat to the exact same point on the seat in front or behind it.)http://www.seatguru....g_777-200_B.php

 

If you wanted to be a true lay flat like SIA (they are nice I have seen them) :http://www.seatguru.com/airlines/Singapore_Air/Singapore_Air_Boeing_777-300ER.php

it would be a 71" seat pitch

 

Superliners are listed as 56" Seat pitch.

FRA list the Regional Coach as 42"

So if you put 55" Seat pitch on a regional coach you could get about 13 rows of 3 or 39 seat.

A 71" seat pitch would be 10 rows or 30 seats. _

But if you put lie-flat at an angle into a Superliner, they might fit ok but you would tend to slide down in the seat at night, and even the angled ones are 5 or 6" longer than the Superliner pitch so you would have to remove a row of seats to get 50" and split that 50 between 9 pairs of seats to make enough room for it. So you would lose 11% of the seats in that section so you would need to increase the price for 'lie-flat at an angle' by at least 15% to make up for lost revenue. Sounds good to me! I used to wake up in the morning kind of sore from sleeping at a 45 degree angle. Not bad, just not fully rested.

Why would you put a lie flat seat in the same space of a non-lie flat seat beats me. Of course you would charge 20% more for lie flat seats at least, so it's OK to use 60" pitch, which is quite reasonable and works quite well.