Home > Vision > Here are some things we know to be true, and you won’t find this information anywhere else

Here are some things we know to be true, and you won’t find this information anywhere else

June 14th, 2007
  • “No passenger rail system in the world operates without some type of subsidy, and it’s impossible for Amtrak to exist subsidy-free.”

    This is utterly false. Passenger rail systems in Japan, Germany, The Netherlands, and elsewhere all operate on a sound basis and report profits. Do your own research and discover how many passenger rail systems in the world actually do make money.

  • According to the Bureau of Transportation Statistics’ latest report issued in 2009, Amtrak’s market share of intercity transportation is one tenth of one percent of the national transportation output.

    This includes all intercity travel, but does not include commuter travel. Amtrak is statistically irrelevant, but learned people know passenger rail travel is an important – and growing – part of our domestic transportation network, and has great potential with the right leadership and proper vision for the future.

  • “Amtrak is chronically underfunded.”

    This also is utterly false. It’s not a matter of how much money Amtrak is given out of public treasuries, it’s a matter of how that money is spent, and what the results are of Amtrak’s business plan in operation. Amtrak’s current business plan revolves around the most expensive types of trains to operate – short distance corridor trains – with the lowest return on investment. Amtrak’s great cash cows are the full service long distance trains, all of which throw off excess cash from above the rail operations costs. Amtrak’s current business plan mostly ignores the transportation output potential of long distance trains and the good return on investment in these routes in favor of short distance corridor routes which constantly require public subsidy.

  • “Amtrak receives an unfairly small amount of government subsidy; why can’t it receive equal amounts to what other modes of transportation receive year after year?”

    This is another false statement, mostly made by those with modal envy. In some years, according to the federal government, Amtrak’s annual federal subisdy is the second highest amount of subsidy paid by the government. The reason for this is other modes of transportation, such as roads and highway and the air traffic control system, are paid for by federal user taxes, such as gasoline taxes and fees charged to airlines which use the air traffic control system. The other modes of transportation do not have “a free lunch,” their subsidies are generated by users of each system, not just from general tax dollars.

  • “Amtrak is doing the best that it can, given its circumstances.”

    We’ve heard this “the dog ate my homework” excuse for nearly four decades. No, Amtrak is not doing the best it can, because it is leaving so much money on the table, runs only an embarrassingly skeletal national system, and currently has no long range plan for new equipment. Too often, Amtrak has thrown up its corporate hands in surrender to any particular vexing situation because it is easier to constantly rely on a steady stream of federal and state funding than generating new revenues through increased passenger traffic.Amtrak’s real customers are not passengers, but federal and state bureaucrats and elected officials who hand out government subsidy dollars. In FY 2009, Amtrak will receive nearly twice in subsidy dollars more than it will take in from the sale of passenger tickets.

  • Amtrak is experiencing constantly growing ridership.”

    This is a true, but meaningless statement.All intercity common carriers measure success by load factor, not by the number of warm bodies hauled; an average load factor of 65% is considered a profitable operation. A combination of revenue passenger miles and load factor are true measures of success for passenger rail operators.

    In Fiscal Year 2008, Amtrak’s network of 15 long distance routes in the nati0nal system reported 2,609,387,000 revenue passenger miles, with an average length of trip of 625.7 miles per passenger, and a load factor of 59.7%. Every train traveling one train mile carried an average of 178.4 passengers per mile, and generated 15.95 cents of revenue per revenue passenger mile. The long distance trains generated $416,284,100 in revenue.Amtrak’s network of 26 short distance routes in the national system (including all corridor routes outside of the Northeast Corridor) reported 1,754,039,000 revenue passenger miles, with an average length of trip of 128.9 miles per passenger, and a load factor of 43.5%. Every train traveling one train mile carried an average of 125.9 passengers per mile, and generated 20.65 cents of revenue per revenue passenger mile. The short distance trains generated $362,294,100 in revenue.Amtrak’s Northeast corridor services, Acela and Northeast regional trains, operating between Newport News, Virginia and Boston, via Richmond, Washington, Baltimore, Wilmington, Philadelphia, New York, and New Haven reported 1,796,260,000 revenue passenger miles, with an average length of trip of 164.2 miles per passenger, and a load factor of 52.9%. Every train traveling one mile carried an average of 197.5 passengers peer mile, and generated 53.08 cents of revenue per revenue passenger mile. The NEC trains generated $953,429,500 in revenue.

  • “The Northeast Corridor is the only part of Amtrak that actually makes money.”

    False, again. When you apply real world accounting to Amtrak’s books, and properly apply all of the costs of owning and operating the NEC infrastructure, the NEC trains (Acela and Northeast regionals) do not make money. Amtrak often assigns routine maintenance costs of the NEC incorrectly to capital expsense cost accounts, which skews the real financial burden of the NEC. Additionally, none of the commuter tenants of the NEC pay anything close to the real cost of their share of infrastructure maintenance costs. For decades, this has been a silent subsidy from the federal government to these various Northeast commuter agencies, allowing them to keep passenger fares unrealistically low because the commuter railroads pay far less than their proportionate share of infrastructure maintenance costs.

Amtrak often seems to ignore its original mission of being a national intercity passenger rail system, in favor of a concentration on the Northeast Corridor and other short distance corridors. Under a federalist system, taxpayers in Nebraska and Oklahoma have every right to expect passenger trains owned and operated by the federal government to be as statistically prevelant in their states as taxpayers do in the Northeast.

“Amtrak shall operate a national rail passenger transportation system which ties together existing and emergent regional rail passenger service and other intermodal passenger service.” — United States Code, Title 49, Subtitle V, Part C, Chapter 247, Section 24701.

While a number of states pay large annual subsidies for passenger rail service to Amtrak, New York State (Where Amtrak Interim President and CEO Joseph Boardman was head of the state Department of Transportation before moving to the federal government.), the beneficiary of dozens of daily trains on the Northeast Corridor, the operation of 20 long distance and short distance trains, and 22 Emprire Service daily short distance/commuter trains (with only a 35% load factor), only pays for one of those routes, the Adirondack between New York City and Montreal via Saratoga Springs. Pennsylvania, however, operates 28 daily Keystone Service trains between New York City and Philadelphia/Harrisburg and subsidizes each train. California operates dozens of corrdior and commuter trains through its Pacific Surfliner, San Joaquin, Capitol Corridor services, and pays to subsidize each train. Other states such as Illinois, Michigan, Wisconsin, Washington State, Oregon, North Carolina, and Virginia all pay for subsidized trains. Other states pay, too, while New York receives mostly free service.

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