Fred Frailey's Trains Mag Article
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JohnF
Jun 6, 2012, 10:45:34 AM6/6/12
to SUNSET LIMITED WEST
Fred has written a new article for the July issue titled "What's Next
for Amtrak". Down in the article he states that the 15 LD trains are
expected to lose $530 million in 2012. I am a retired CPA so I like
to work with numbers. I want back and dug up Amtrak's FY2011
Performance Report and also the PIP Plan reviews on certain trains and
routes, including our train the Sunset Limited. I used Amtrak's own
numbers. I wanted to find out if these trains even covered their own
operating costs, that is fuel, rent to private RR($5 a train mile by
the way, not free), switching, maintenance, labor T&E, labor OBS,
commissary and station costs. What I found for the Sunset is that it
actually breaks even or even makes a small operating profit. The huge
loses that make the news are caused by Amtrak layering on huge
overhead allocations, or in the case of the Sunset about $40 million
dollars. Do you smell a 'skunk in the woodpile' here? I do. I went
on to evaluate the other trains except Auto Train and found out the
worst performers operationally are the trains we think are so
successful, the CZ, SWC, EB, Crescent and Starlight in that order.
Altogether the 14 LD trains show an operating loss of about $97
million, but then Amtrak layers on another $487 million in bloated
overhead costs. I also found that Amtrak's coach fares on most of
these trains is lower than the Greyhound bus fare. With just an
increase in coach fare to at least above Greyhound most of these
trains broke even and with a little added capacity would make an
operating profit. Think maybe these trains would be better off run by
a lean mean organization that really wanted to run them successfully?
for Amtrak". Down in the article he states that the 15 LD trains are
expected to lose $530 million in 2012. I am a retired CPA so I like
to work with numbers. I want back and dug up Amtrak's FY2011
Performance Report and also the PIP Plan reviews on certain trains and
routes, including our train the Sunset Limited. I used Amtrak's own
numbers. I wanted to find out if these trains even covered their own
operating costs, that is fuel, rent to private RR($5 a train mile by
the way, not free), switching, maintenance, labor T&E, labor OBS,
commissary and station costs. What I found for the Sunset is that it
actually breaks even or even makes a small operating profit. The huge
loses that make the news are caused by Amtrak layering on huge
overhead allocations, or in the case of the Sunset about $40 million
dollars. Do you smell a 'skunk in the woodpile' here? I do. I went
on to evaluate the other trains except Auto Train and found out the
worst performers operationally are the trains we think are so
successful, the CZ, SWC, EB, Crescent and Starlight in that order.
Altogether the 14 LD trains show an operating loss of about $97
million, but then Amtrak layers on another $487 million in bloated
overhead costs. I also found that Amtrak's coach fares on most of
these trains is lower than the Greyhound bus fare. With just an
increase in coach fare to at least above Greyhound most of these
trains broke even and with a little added capacity would make an
operating profit. Think maybe these trains would be better off run by
a lean mean organization that really wanted to run them successfully?
Richard L. Friedman
Jun 6, 2012, 1:49:14 PM6/6/12
to sunset-li...@googlegroups.com
What do you define as "bloated overhead costs?" If it's non-essentials like the reservation system, and the administration of a national system, perhaps there is no good way to reduce those costs. If the system IS to be national, it needs to be administered as such, and it needs a national reservation system, no matter what State's may say about it.
It does sound like fares should be slightly higher than bus fares, since the amenities are so much greater than bus amenities.
Just an observation on my part, as an actual rider. The Sunsets operating costs would be much higher if more of its stations were staffed. But then, revenues would be higher because more people board at staffed
stations.
From: JohnF <jfra...@comcast.net>
To: SUNSET LIMITED WEST <sunset-li...@googlegroups.com>
Sent: Wednesday, June 6, 2012 8:45 AM
Subject: Fred Frailey's Trains Mag Article
JohnF
Jun 6, 2012, 6:39:56 PM6/6/12
to SUNSET LIMITED WEST
I don't think the reservation system, g&a costs, advertising,
insurance, or any of the other overhead items would add up to $40
million dollars a year for a three times a week operation. What this
says is the next time one of these Congressmen stands up and cites the
Sunset as an example of Government waste you can tell them it's all
just an Amtrak allocation of something called overhead. If the train
is discontinued, none of these costs would go away, they would just be
redistributed to other trains. Operationally, the train breaks
even......in other words it costs Amtrak and the tax payers nothing.
So all this talk of the Sunset costing $400 per passenger to run and
it would just be cheaper to buy them all a plane ticket is just
baloney.
jf
On Jun 6, 12:49 pm, "Richard L. Friedman" <rfrie...@pacbell.net>
wrote:
insurance, or any of the other overhead items would add up to $40
million dollars a year for a three times a week operation. What this
says is the next time one of these Congressmen stands up and cites the
Sunset as an example of Government waste you can tell them it's all
just an Amtrak allocation of something called overhead. If the train
is discontinued, none of these costs would go away, they would just be
redistributed to other trains. Operationally, the train breaks
even......in other words it costs Amtrak and the tax payers nothing.
So all this talk of the Sunset costing $400 per passenger to run and
it would just be cheaper to buy them all a plane ticket is just
baloney.
jf
On Jun 6, 12:49 pm, "Richard L. Friedman" <rfrie...@pacbell.net>
wrote:
> What do you define as "bloated overhead costs?" If it's non-essentials like the reservation system, and the administration of a national system, perhaps there is no good way to reduce those costs. If the system IS to be national, it needs to be administered as such, and it needs a national reservation system, no matter what State's may say about it.
>
> It does sound like fares should be slightly higher than bus fares, since the amenities are so much greater than bus amenities.
>
> Just an observation on my part, as an actual rider. The Sunsets operating costs would be much higher if more of its stations were staffed. But then, revenues would be higher because more people board at staffed stations.
>
>
>
> >________________________________
> > From: JohnF <jfran...@comcast.net>
>
> It does sound like fares should be slightly higher than bus fares, since the amenities are so much greater than bus amenities.
>
> Just an observation on my part, as an actual rider. The Sunsets operating costs would be much higher if more of its stations were staffed. But then, revenues would be higher because more people board at staffed stations.
>
>
>
> >________________________________
Richard L. Friedman
Jun 6, 2012, 7:19:50 PM6/6/12
to sunset-li...@googlegroups.com
JOHN, conversely, if the Sunset were daily (or even twice daily) the overhead costs would not go up, and if you divided them by the number of trains, the overhead would appear to go down.
It's a numbers game by both our friends AND our enemies. Unfortunately.
Sent: Wednesday, June 6, 2012 4:39 PM
Subject: Re: Fred Frailey's Trains Mag Article
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