By Larry Dignan
Posting in Finance
Forty-one of Amtrak’s 44 routes lost money in 2008 and on average the railroad lost $32 per passenger, according to a new report.
Forty-one of Amtrak’s 44 routes lost money in 2008 and on average the railroad lost $32 per passenger, according to Pew's Subsidyscope.
However, that average doesn't show the vast range for Amtrak's money-losing routes. Losses ranged from $5 to $462 per passenger, said Subsidyscope.
The line with the highest per passenger subsidy—the Sunset Limited, which runs from New Orleans to Los Angeles—carried almost 72,000 passengers last year. The California Zephyr, which runs from Chicago to San Francisco, had the second-highest per passenger subsidy of $193 and carried nearly 353,000 passengers in 2008. Pew's analysis indicates that the average loss per passenger on all 44 of Amtrak’s lines was $32, about four times what the loss would be using Amtrak's figures: only $8 per passenger. (Amtrak uses a different method for calculating route performance).
The Northeast Corridor line---think Washington D.C. to Philly to New York to Boston---carried 10.9 million people in 2008 and the Acela Express made a $41 per passenger profit. The Northeast Regional, the cheaper and more popular service, lost $5 per passenger.
The AP quotes one transportation wonk who notes that other forms of transportation also lose money, but the question remains. Should that taxpayer have a say in what routes Amtrak runs? And is subsidized rail travel a worthy cause?
Oct 26, 2009
how much revenue did the Interstate 5 freeway between los angeles and the Bay region bring in? what? Zero? the federal fuel tax of 18 cents (which has been unchanged since the 1980s btw) is not sufficient to pay the costs of roads. as soon as electronic toll transponders are installed on every road to charge the auto users the correct (and higher, unsubsidized) amounts of money for usage, then talk to me about amtrak subsidies. until then, as long as highways and airports get municipal, state, and federal subsidies, then rail transit and amtrak should too.
My biggest fears are that we will buy our steel from Russia (they own all of our US steel companies now, in case no one noticed), train engines from Spain, and power them on oil from the middle east. When did everyone decide that we need to put the entire US on eBay? In order to be successful, we must run electric train engines manufactured by GE, GM, Ford, and Chrysler in the US; fueled by US nuclear power plants; and run on tracks using steel from US owned mines and plants. The trillions we send abroad for petroleum is inexcusable. Replacing petroleum with nuclear generated electricity in the major cities alone, would easily save enough to pay the margin needed for reusing the spent uranium, reducing waste to near zero. What problems will it reduce? 1. Auto, truck, and plane pollution 2. Petroleum dollars sent abroad 3. Foreign control of America's fuel supply/prices 4. Unemployment, especially auto mfgrs 5. Decline of the mid-west 6. Metropolitan traffic congestion 7. Lost worker hours/productivity due to commuting 8. Auto and airline accidents, and road-rage 9. Urban crowding and sprawl 10. Unaffordably inflated commutable housing
In Spain, where I live, they are building more and more high-speed trains, which compete with the air travel. The first advantage is that a high-speed train can transport *many* more people than an aircraft, and if you consider the transit time (time to get to and from the airport) it actually takes less time to travel from Madrid to Seville or Barcelona than taking a flight, as the trains leave and arrive at the city centers. And it is cheaper, too. There is an additional issue apart from the fuel costs, and that is that air traffic cannot continue expanding indefinitely - there is a limit on the available airspace, and most airports are already saturated and cannot easily expand. Finally, you should consider the fact that for long trips you can actually take your car with you on the train, and arrive *much* quicker than driving to your destination. If your stay for several days, transporting your car by train might be actually cheaper than hiring one. And I don't believe people are thinking about sending their cars by plane...
We should stop subsidizing air travel, which is an environmental disaster. Spend, instead, on rebuilding our rail network - with dedicated tracks for passenger trains like in Japan. Make it fast and convenient, and people will use it; it will become efficient with full cars and longer trains. Yes, it will require public subsidies. It will provide major public benefit, and private capital is unable to finance it, so subsidies are justified. Our national rail system could never have been built to begin with without massive subsidies; more subsidies will be needed to bring it into the 21st century. It would be an excellent project for putting people back to work, as well; much better than spending stimulus money on more highway construction. Let's build infrastructure for the future, instead of expanding that which is obsolete.
Incredibly, the military is hemmoraging BILLIONS with NO REVENUES!!! We need to start a military trust fund! Or lobby our representatives to tell the military that unless it can turn a profit IT IS OBSOLETE! Let the market decide!!
FYI. During the early 1980s in London, the deputy head of the Greater London Council introduced a massive (approx. 50%?) reduction in the cost of travelling on public transport. This directly led to a dramatic increase in travellers, a significant drop in road traffic accidents and the first reduction in average journey time across the capital in well over 100 years. The Government, led by Margaret Thatcher, responded by abolishing the Greater London Council and normaility returned.
Gas has already reached more than $4.00/gallon and as it becomes a scare commodity it will reach that again and worse. When this happens people will be screaming that better rail service should already be available. We are certainly the country of the short-sighted but let's not be on this issue. No one is saying that Amtrak does not have some customer service issues. Certainly, for years it was run into the ground by those who did not care or had an active agenda for it not to succeed. But recently they've been more responsive. We personally love Amtrak and I cannot think of a better way to travel cross country with a small child. I do not want to battle the traffic to the airport, find parking in a remote lot, walk miles to the terminal, be patted down by security then wait through the usual delays in boarding and departing. I don't want to think of the absolute torture of trying to appease a small child in doing this or deal with one when the plane is delayed for an hour or more. My kid would not have a lot of tolerance for that. However, he LOVES the train. We've been on overnight train rides and he's been perfectly behaved. We are all free to walk around (those who are susceptible to DVT might want to consider that before flying) and we enjoy the scenery and find it a very non-stressful way to travel. Also, last winter while many flights were delayed or cancelled because of ice and snow we were out to our destination wedding on time because we left on time on Amtrak. We took the sleeping car South and had the best time.
Let's not forget that the Bush administration cut the subsidies for Amtrak a few years back and no one has returned that money. I used to exclusively travel by Amtrak and this was over a 25 year period (I flew twice in that time) The difference became apparent after the cuts. What was once a relaxing, enjoyable trip became a nightmare. However, even with the changes, I still would rather train than fly.
What kind of ROI do we get for the millions spent annually on maintaining the Interstate Highway System, which is in a serious state of disrepair? I'm really tired of hearing this same old arguement for trying to put an end to Amtrak and train travel in this country. What Amtrak needs is permanent funding just like the Interstates Highway System and Aiports. In conjunction with that, it needs a fully capitalized Equipment Trust Fund, and sufficeint funds must be spent to continue to modernize and bring the NEC into a state of Good Repair. The Obama administration was the first since Amtrak's inception that has not been trying to kill Amtrak, but realize that it is a necessary and viable part of our national transportation network. The forty plus years of neglect to the NEC cannot be turned around overnight, and it is encouraging to see that progress to the corridor continues to be made, in addition to the fact that previously sidelined passenger equipment is finally being reconditioned and brought back on line, including locomotives, and also that the first new major equipment purchases since the mid-seventies will finally soon become a reality. While there is still much to be done in trying to bring cost reduction measures to the entire route system, progress is definitely being made. I fail to see why we demand that Amtrak be a money maker, when we don't expect the same from the airlines that continue to loose millions annually. It's time to finally get with the program and promote train travel, and start to bring us in line with Europe and Asia in providing clean, comfortable and convenient train transportation. While I admit it may not always be perfect and much still needs to be done, we must look at many improvements that have already been made and just keep moving forward. I'd rather travel by train any day. Go Amtrak!!!! Allan J. Medwick
What subsidies do highways or airports get??? Compare passenger mile subsidies for all modes of transportation. Rail is environment-friendly!
If subsidies were the rationale for cutting or discontinuing service, then why not eliminate US mail service in non-profitable areas of the country. AMTRAK refers to America, not just 'profitable' America. Do we have any government services that are profitable? That can be measured in any direct way? Indirectly, as many are pointing out, we all profit, not always measurable in dollars and cents. Our space program on the face of it, is a big money drain. However, many could point to our funding of the space program as the source of many innovations we take for granted. Many would say our present technological superiority came about because of our countries investment in the future. Our country should never seek pure capitalist solutions. Leave that to short-sighted corporations trying to make investors happy. We the people are not a corporation.
Instead of nit-picking over these supposed "loss per passenger" numbers (which I agree with another poster who says they're all pretty suspect, when you look at the claimed "losses" for each road trip someone makes), I think you just need to do what makes common sense. Here in St. Louis, Missouri - I find Amtrak incredibly frustrating. Their main station here has been a little tin shack for years. Yes, they promise they're finally building something better ... but they got rid of our Union Station as an actual train station, when it's obviously the FAR more attractive structure. Then, their little Kirkwood station isn't too bad (run entirely by volunteers after Amtrak said they couldn't afford to keep it open), but due to insufficient parking space around it, many people wind up driving all the way downtown instead, to take a train from the tin shack. And as for the routes? I'm amazed I can't take Amtrak from St. Louis to Memphis, TN. What's with that? I know plenty of people who make that trip pretty regularly and almost all of them would rather take the train if they could.
Also consider this: Rail is not as energy efficient for passenger travel as many like to believe. Considering their sorry load factors, Amtrack's emissions-per-passenger mile is probably twice that for auto travel. In fact, the only place where passenger per unit of CO2 emissions for rail beats the automobile is in Japan, where they literally shove people into the cars. That's hardly a passenger density that will make rail more popular that automobiles in America.
Whoa, wait a minute - how are you getting the costs? One comment remarked on the high costs of highway travel. Aren't roads paid for by users out of gasoline taxes? That comment made t as to this whole issue suspect. Are we talking about incremental rail passenger costs or some sort of allocated cost? How much of the cost of the rail lines that are also used for freight are included in the $32 or any of the other trip costs? Those costs would continue whether there is passenger traffic or not. We need to be careful about a garbage in-garbage out analysis here. In comparing trips, we need to be mindful of equivalent comparisons - a 1-hour commute is different than a several day cross=country trip. Also, ridership could increase and costs could drop if rail travel was more timely and efficient.
The American railway system is so obsolete that it is beyond comment. Instead of going back to the dead moon, we should rebuild the railway system to be a world class system, considering that flight crews are falling asleep at the wheel now. Let's stop making life cheap like it is in third world countries. America should have the best of everything. Period.
I gave up using Amtrak 25 years ago when it began to cost considerably more to take it between NYC and Utica, NY than to drive my VW diesel. The emphasis on high speed rather than efficient, inexpensive short haul is grotesque. Amtrak should be cut up into tiny parts and each part given to the local model railroading club to run. They would get it shipshape in a matter of weeks.
...so they'll always have at least one dedicated customer. The reason Amtrak loses money is because they are not a "first class transportation citizen". Think about it this way: What rail system does Amtrak use for their trains? The answer is quite simple: They share tracks with freight trains. And the rails are owned by railroad companies so Amtrak will always get second billing to freight trains at any time. Last holiday season my kids were stuck on a train for much longer than they should have because someone walked out in front of a freight train and got killed. I'm not saying that it wouldn't have happened if it had been an Amtrak train that they stepped out in front of, but if Amtrak had it's own rails to run on, then this kind of thing happening to a freight train wouldn't affect passenger service and likely more people would start USING the passenger trains. We definitely need to be more like some other countries in this respect. I've been to a fair number of countries, and I wish we could have rail systems similar to places like Japan where they have a most excellent rail system. Japan has four different sets of tracks: High speed for the bullet trains (they call it the Shinkansen), freight trains, commuter trains and streetcar/subway and there is absolutely no crossover. America needs to get out of the pockets of the rail industry and start creating sensible transportation infrastructure. And none of this "NIMBY" nonsense, economical public transportation does NOT drive your property values down. In fact, having close access to public transportations makes your property even more desirable.
RE: seatrans' "$37 (lost) per car trip": Doesn't anyone sanity check this horse s**t? On average, there must be close to one car trip per American per day, or 109.5 billion car trips per year. Loosing $37 per trip, that comes to over $4 trillion per year. For comparison, the entire Federal expenditure for 2008 was just under $3 trillion! It is certainly possible to argue in favor of trains in the Northeast Corridor. However, running the Sunset Limited and the California Zephyr for train buffs, phobics, and for the benefit of the union members is clearly a theft from the public, and a colossal waste of natural resources. seatrans' protest concerning private jets is perfectly valid (albeit irrelevant to the discussion here) and also needs remedied.
The real answer isn't found in questioning whether to keep it because of what it loses, but in making it not lose the money. Making it more popular would make it lose less. Making it more efficient would make it lose less. As others have said, Europe's rail system should be proof and example. Our future cannot afford to NOT have railway systems. The winning ticket is to make them work for us here on this continent as well.
It is time for all of us in NORTH AMERICA to start looking at trains, buses, subways in the same manner as roads a public service, that is the only way to reduce highway and street congestion. Adding some toll roads could help push this concept forward. Cars will not be going away anytime soon, but a 10 to 20% reduction in road traffic would go a long way to cutting pollution, petroleum usage, highway maintenance. ?but to do this there needs to be a viable alternative, low cost transit. it needs to happen and the sooner the better
We are SOOOOO late in this game - Go spend a month in Europe and enjoy the TGV to see how a real fast train can be a viable alternative to the very carbon-based US plane... Then re-write your article again -
There are for-profit freight companies, yet no for-profit passenger service. Let the entrepreneur come forth and produce a passenger rail service if it's needed. Have you actually tried to book a rail ticket to and from a destination? Almost certainly the cost is more than airfare in most of the country, it takes a very long time, and much of the travel will include stops and bus service between destinations where rail service does not reach.
So, how would those 74,000 people get to LA otherwise? Fly in a subsidized airline, landing in subsidized airports? Drive on subsidized highways? And do you really want to increase the freeway load by 74,000 people? How many car trips would that be? 37,000? 70,000? How many gallons of gas? Additional accidents?
...I would agree that this is the mess we get when we start subsidizing everything. It's no longer possible to reasonably grasp the real cost of anything. For some, I suggest that's the agenda.
What is the cost of NOT having the trains? A certain percentage of the money spent is reclaimed in income and sales taxes that might not otherwise be collected. Another thing to consider is whatever value might exist in maintaining an alternative form of transportation for when disasters occur. By having a viable train system maintained you may be able to quickly move people and supplies. The other thing to consider is what is the improved efficiency of other forms of transportation because people are not using that resource but are using the train instead? Less crowded roads, sea ports and airports have added value too.
As mentioned in other posts no form of transportation (Air, roads, rail) is paid for directly by the user. Also every road in the country doesn't have toll meters on them we have a highway "system" plenty of roads with low volume would have unbelievably high per user cost. Also plenty of plain flights from small airports also have very high per user costs not paid for by ticket costs. The only way to evaluate transportation systems is as a system and this includes rail. That said cost should be only one factor in the evaluation. In many areas highways and air ports are maxing out without rail these systems would either fail or need massive upgrades.
A proper high-speed system would bring a lot more riders. I've checked into riding the train (have done it a couple of times when the kids were small) but the length of the ride is just too long. I'd have to take an extra week of vacation just for the train ride to and from my destination. I've ridden the Eurostar and it is great but it operates at a loss. It's just to expensive to build and maintain IF you want the ticket price to be affordable by the masses.
It's a matter of political support. The reason Amtrak maintains unprofitable routes is because the senators and congressmen from states and cites along those routes insist they stay in -- or else they won't support Amtrak funding in general. And it makes sense in an odd way -- everyone should have a stake in the national rail passenger system. If we limited travel to the most profitable routes -- Amtrak will be perceived as a "Northeast" thing. That being said, it's worth noting that even the best systems around the world are subsidized, because nations recognize that passenger train travel is vital to their transportation infrastructures. And, as a reader points out above, we heavily subsidize road and air travel with our tax dollars.
Taxpayers DO have a say just as with any other federal spending.It's at the ballot box. Passenger rail doesn't make money anywhere and hasn't for 50 years. You either subsidize it as a public which is common sense or get rid of it. A SmartPlanet thing to do is invest in passenger instead of squeezing it under the faulty notion that it should be profitable. Efficient, yes, but profitability left the station long ago.
U.S. highways lose an average of $37 per car trip. Long car trips are far worse. Trips of over 1000 miles create highway losses of $403 - $987. Trucks are even worse, causing losses of as much as $6000 per trip. These are the losses above and beyond the amount collected by the puny federal gas tax which hasn't been raised in decades nor accounted for increased fuel efficiency. These losses also don't account for the feeder function of local roads which are paid for by property taxes. Should taxpayers have some say in how much general budget money is spent on roads and subsidizing car passengers? Oh, and airlines cost taxpayers an average of nearly $100 per traveler in paying for the air control, the FAA safety programs, the TSA, grants to build airports, essential air services. Only a small fraction of these expenses are every collected in user fees. The subsidy is particularly egregrious for those flying in private jets, who pay less than 1% of the cost of the airports they use and the air traffic control services they receive - to say nothing of the congestion cost they impose on commercial plane travel.
Only if the public benefits. And I don't believe the public benefits because the VP wants to ride a rail into Washington. We pay for the rail AND likely for their tax exemption travel expenses. Boys need grow up and get over their toys.
With so many of the seats empty, it's nothing more than a public works program and a subsidy for those who can afford the seats. There's nothing smart about running half empty trains, fiscally or ecologically.