Amtrak Running Off Rails Scott Reeves Jun 25, 2008 1:00 pm |
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For the rest of us, the national passenger train network is a typical derriere-over-teakettle operation.
Amtrak, established in 1970, loses buckets of money every year. As it’s now run, it will never come close to breaking even. President Bush said Amtrak should receive $900 million in taxpayer subsidies for fiscal year 2008. Congress increased the handout to $1.3 billion.
In a rational world, Amtrak would be run as a short-hop system between major cities such as Boston, New York and Washington. That might attract private investment, if the company were ever broken up and its routes auctioned off.
Amtrak service between San Francisco and Los Angeles -- or even between Seattle and Portland, Oregon -- could also be a viable option for travelers. And Amtrak trains connecting Austin to Houston and Dallas? An interesting (and maybe even profitable) idea, but one unlikely to happen in this lifetime.
Amtrak would need billions to upgrade existing freight lines to high-speed passenger standards - and distances between most major cities in the United States is too great for trains to compete with planes. In short, rising fuel prices will have to ground JetBlue (JBLU), United (UAUA) and American Airlines (AMR) before intercity rail service takes a significant bite out of airline revenue.
The U.S. Government Accountability Office (GAO) tells us what any semi-conscious politician should know: "Routes of 750 miles or more, while providing service for some rural areas and connections between regions, show limited public benefits for dollars expended."
Just how limited is shocking: Long-haul routes account for about 15% of riders and 80% of Amtrak's losses.
"‘Corridor’ routes (generally less than 500 miles in length) have higher ridership, perform better financially, and appear to offer greater potential for public benefits," the GAO says in its report.
Before commercial aviation (ahem) took off, the now-defunct Pennsylvania and New York Central railroads ran competing overnight premium service between New York and Chicago. Other than as a novelty -- and even given idiotic airport security, routine delays and steerage-class service on most airlines -- who would take such a train now?
Amtrak can do well on seasonal tourist trains through, say, Glacier National Park in Montana, but no traveler on a short business trip or vacation wants to spend days rattling along in a train to get there.
The nation's major freight railroads, including Union Pacific (UNP), CSX (CSX), Burlington Northern Santa Fe (BNI) and Kansas City Southern (KSU) are investing in new tracks, locomotives and rolling stock to increase traffic. What they don't need is a bunch of long-distance, government-funded and mostly empty passenger trains getting in the way.
Can anyone in Washington read a map?
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