yarrow
Engineer
with the absurd rise in oil prices, how is amtrak coping? how much is amtrak losing due to the escalating oil prices(or have they contracted for fuel long term at a more favorable price)? when is a fuel surcharge coming?
fuel prices, fare increase?
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I think Amtrak makes a bit of a deal about the 'we have no surcharges' thing in the marketting stuff, so I'd expect a price rise rather than a surcharge, it amounts to the same thing - your ticket now costs more, but I think they'd try to keep to the "that's what you pay" way of working.
What flexibility do they have on price changes - can they change them when they want or is there some amount of notice they have to give?
For me on the NEC, the prices have been climbing steadily every 9 - 12 months. I imagine this will continue (and get worse).
It will be interesting to see how long the bus companies can afford to sell 10 dollar bus tickets, but for now, that is looking to be a more viable option for me as Amtrak prices on the NEC, even as they are, are getting out of hand. The Regionals will soon be only people traveling for work. (The Acelas already are.)
Joel N. Weber II
Engineer
I think elsewhere on these forums, someone said that about 11 months before a train runs, someone at Amtrak decides how many seats to sell at each bucket price. I imagine the easiest thing Amtrak can do without changing the prices printed in the timetable is to simply move more seats to the higher buckets.
I suspect most of Amtrak's costs are per train and per car and not per passenger, in which case getting just about all the seats filled is probably the best way to maximize profit / minimize loss. It's not quite like shipping a package by UPS where UPS can send fewer trucks down the highway if the higher prices discourage business. (Amtrak could run fewer cars in the extreme case, but it's not clear that that would save them much, and in any case the way current demand interacts with the current supply of rolling stock, that's just not going to happen anytime soon.) On the other hand, that doesn't really explain why airlines would find a fuel surcharge to be an effective approach, other than that it allows them to have misleading advertised rates.
So I don't think Amtrak is in a good position to directly recover rising fuel costs, but on the other hand, if rising fuel costs lead to greater demand for Amtrak's services, Amtrak will be in a position to raise fares because of the greater demand.
I suspect most of Amtrak's costs are per train and per car and not per passenger, in which case getting just about all the seats filled is probably the best way to maximize profit / minimize loss. It's not quite like shipping a package by UPS where UPS can send fewer trucks down the highway if the higher prices discourage business. (Amtrak could run fewer cars in the extreme case, but it's not clear that that would save them much, and in any case the way current demand interacts with the current supply of rolling stock, that's just not going to happen anytime soon.) On the other hand, that doesn't really explain why airlines would find a fuel surcharge to be an effective approach, other than that it allows them to have misleading advertised rates.
So I don't think Amtrak is in a good position to directly recover rising fuel costs, but on the other hand, if rising fuel costs lead to greater demand for Amtrak's services, Amtrak will be in a position to raise fares because of the greater demand.
the_traveler
Engineer
I think that one reason does not introduce fuel surcharges is due to the different routes that passengers can ride. On a nonstop flight from Boston to Washington, you assume most passengers are going to board in Boston and get off in Washington on that flight. But a train is different.
A passenger could ride from BOS-WAS, but another could ride KIN-NLC or OSB-BWI or NHV-EWR or NYP-PHL. Are you going to charge the same surcharge for all those - even though one is ## hours long and another is 30 minutes long?
And a "fuel surcharge" only increases the carrier's profit line - without "increasing the ticket price"! If even a $10 "fuel surcharge" is added to a plane carrying 250 passengers, that gives the airline $2,500 more for that flight. People will say "That's not much!" - and not really think about it. So the airline makes $2,500 more for that flight. But the increase fuel cost may have only been something like $300-$500 more!
So they make $2,000 more for that flight!
What's not to say that Amtrak will be any different?
And can you think of any time that a company has lowered their "fuel surcharge" when the fuel cost was lowered? :huh: I can't!
A passenger could ride from BOS-WAS, but another could ride KIN-NLC or OSB-BWI or NHV-EWR or NYP-PHL. Are you going to charge the same surcharge for all those - even though one is ## hours long and another is 30 minutes long?
And a "fuel surcharge" only increases the carrier's profit line - without "increasing the ticket price"! If even a $10 "fuel surcharge" is added to a plane carrying 250 passengers, that gives the airline $2,500 more for that flight. People will say "That's not much!" - and not really think about it. So the airline makes $2,500 more for that flight. But the increase fuel cost may have only been something like $300-$500 more!
So they make $2,000 more for that flight!What's not to say that Amtrak will be any different?
And can you think of any time that a company has lowered their "fuel surcharge" when the fuel cost was lowered? :huh: I can't!
Joel N. Weber II
Engineer
I'm not sure people consider $10 insignificant. On trains #448 and #449, upgrading from coach to business class ALB to BOS is $19, not even twice that $10. I understand there are many times more coach seats than business class seats on that train.
And adding a $10 fuel surcharge is still a more obvious action that has the potential to annoy loyal customers than moving seats towards the higher buckets.
And adding a $10 fuel surcharge is still a more obvious action that has the potential to annoy loyal customers than moving seats towards the higher buckets.
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jis
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Amtrak like all other prudent businesses also uses long term fuel contracts and even does some hedging from what I have read, so while fuel prices will go up for them too it will lag the spot price of fuel by as much as a year. Another consideration is that I think fuel expenses as a proportion of the total cost of doing business is a much smaller percentage for Amtrak than it is for the airlines. Hence the effect of rising fuel prices should be somewhat muted.
Green Maned Lion
Engineer
Also, Amtrak's key goal is ridership, rather than profit, despite what they claim. They don't want to do anything that is going to discourage ridership. The NEC is at capacity for much of the day, so they can raise prices. Price increases on, say, the CONL, are very unlikely.
Joel N. Weber II
Engineer
What you can get away with charging for a kilowatt hour of power from a nuclear plant or wind farm may be influenced by whether your customers are going to buy power generated from cheap oil if you raise the price too far, though.
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According to the Amtrak monthly performance report for January, 2008, energy costs rose from $23.0 million in January 2007 to $27.9 million in January 2008: a 21% increase. By contrast, US Airways experienced a fuel cost increase of 49.5% in the first quarter of 2008 as compared the first quarter of 2007 (muted to 17% by hedging).
Although energy cost is a smaller percentage of Amtrak's total expenses than it for airlines, that is because Amtrak's total expenses per passenger mile are so much higher than airline expenses. Amtrak actually pays more for energy on a per passenger mile basis than US Airways. In January, energy cost Amtrak 6.7 cents per revenue passenger mile. US Airways in the 1st quarter 2008 paid 4.9 cents for fuel per revenue passenger mile.
Although energy cost is a smaller percentage of Amtrak's total expenses than it for airlines, that is because Amtrak's total expenses per passenger mile are so much higher than airline expenses. Amtrak actually pays more for energy on a per passenger mile basis than US Airways. In January, energy cost Amtrak 6.7 cents per revenue passenger mile. US Airways in the 1st quarter 2008 paid 4.9 cents for fuel per revenue passenger mile.
TransAtlantic
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A couple of points: The increase in passenger traffic on Amtrak recently (double-digit) should be able to make up the difference in fuel costs, since (as noted before) they are relatively less than on other modes of transport on a per-passenger basis.
And, unlike airlines, fuel represents only about 8-10 percent of the cost of running each train, even at current prices - maintenance (yes, Amtrak does have it) and staffing are the biggest costs for train movement. If anything, Amtrak may get out of the fuel gouging situation smelling like roses.
And, unlike airlines, fuel represents only about 8-10 percent of the cost of running each train, even at current prices - maintenance (yes, Amtrak does have it) and staffing are the biggest costs for train movement. If anything, Amtrak may get out of the fuel gouging situation smelling like roses.
Green Maned Lion
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Lets get one thing straight: they aren't gouging us for fuel. The fact of the matter is, the supply is consistently going down, while the demand (China and India are both getting the automobile very fast) is skyrocketing. To expect the price not to sky rocket with it is silly.
For my part, I'm damned happy with the current price of oil. I will dance in the streets when it hits $200 a barrel. Oil and fuel has been underpriced for too darned long. It brings home to people the realities of the cost of doing things they don't need to be doing. If the price goes down again, we, as a bunch of ignorant americans, will go back to wasting fuel again. Long live high energy costs.
For my part, I'm damned happy with the current price of oil. I will dance in the streets when it hits $200 a barrel. Oil and fuel has been underpriced for too darned long. It brings home to people the realities of the cost of doing things they don't need to be doing. If the price goes down again, we, as a bunch of ignorant americans, will go back to wasting fuel again. Long live high energy costs.
jis
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Does "revenue passenger mile" mean "occupied seat mile" or is it just per "seat mile" that was available in revenue service? Just curious whether load factors have a bearing on that number.
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From the US Bureau of Transportation Statistics: "One passenger transported one statute mile. Total passenger miles are computed by summation of the products of the aircraft miles flown on each inter-airport flight stage multiplied by the number of passengers carried on that flight stage."
U. S. Bureau of Transportation Statistics
Well, there is more to it than that. There is ample *potential* supply, right here in the US. Lots of untapped reserves that for a number of different reasons we can't explore and produce.
Personally though, my point of view is let's save this supply that we have for a rainy day. I think the economy can absorb oil up to about 225 to 250 a barrel. After that, there will start to be some impacts. Be careful about the Long live high energy costs GML, for there are some broad implications to those costs (for example food production, clean water, and unintended consequences).
What we really need right now is additional refining capacity .... that is a problem of it's own.
Green Maned Lion
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Germany survives with near $9/gallon. I'm sure we'll live if we had similar prices. I won't be satisfied until people avoid driving when it makes sense and drive a car that is actually efficient, rather than a car that has a Hybrid badge taped onto it but, when you get down to the actual mileage, is not all that efficient. My car weighs in at 3600 lbs, it has a 3.0 litre diesel engine (So yes, I'm paying more than most of you for fuel!) and when it is being driven comfortably on the highway, it gets about 35 mpg, offering it a range of 833 miles. My car was made 13 years ago, and yes, its performance on the road is more than acceptable. Why, in 13 years, have we not moved significantly beyond this? With all our technology and "hybrid" power, nobody but Mercedes currently offers a car that can accommodate that fuel economy at that size. Just like it was 13 years ago, when the car was born.
And its pretty possible. Most european-market cars of that size get that mileage over there- Or better. And most of them surpass our safety standards and blast away every emissions standard but NOx and particulate matter. Why aren't they for sale here? Why do we have over complicated, under delivering nonsense being claimed as "green" when realistically much better offerings exist and HAVE existed for decades in the rest of the world? Especially this ethanol nonsense. The bill passed requiring its usage will go down with the Hawley-Smoot Tariff in the hall of fame of bad legislation.
The way to solve this isn't legislation, it is attacking the consumers pocket. People will stop listening to the BS and actually bother to calculate what each car actually costs to run then. It will be wonderful. Intelligent informed consumers! In the US? I know its far fetched, but we could use them.
And its pretty possible. Most european-market cars of that size get that mileage over there- Or better. And most of them surpass our safety standards and blast away every emissions standard but NOx and particulate matter. Why aren't they for sale here? Why do we have over complicated, under delivering nonsense being claimed as "green" when realistically much better offerings exist and HAVE existed for decades in the rest of the world? Especially this ethanol nonsense. The bill passed requiring its usage will go down with the Hawley-Smoot Tariff in the hall of fame of bad legislation.
The way to solve this isn't legislation, it is attacking the consumers pocket. People will stop listening to the BS and actually bother to calculate what each car actually costs to run then. It will be wonderful. Intelligent informed consumers! In the US? I know its far fetched, but we could use them.
jis
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Thanks. The other question I had is: Is the fuel consumption figure that is used for just the revenue carrying part of the trip or does it include incidental non-revenue positioning of consist etc. too? Assuming that it is for the revenue carrying part of the trip, do they just use some gallons per mile figure and multiply that out with the number of miles for the trip and with per gallon price to get the total price?
Also I was wondering what if any are the differences between in price per gallon between Jet-A and diesel.
Hmm...wonder what the figures are for fuel CASM--cost per available seat mile (i.e. if the seats were all 100% occupied). I'd bet Amtrak's figures would be lower than US Air's...
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I did the simple way out. I took the Amtrak operating expense line item for Fuel, Power, and Utilities and divided it by the reported RPM for the month to get the energy cost per RPM. I did the same thing with US Airways.
Amtrak: Average cost of diesel, January 2008: $2.11 per gallon
US Airways: Average cost of Jet A, 1st quarter 2008: $2.88 per gallon ($2.60 after hedging).
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They absolutely are. The reason is that Amtrak's system load factor is so low compared to an airline (January 43% verses US Airways 79%). Amtrak carries a lot of empty seats. So, for Amtrak the energy cost per ASM is 2.8 cents and for US it is 3.8 cents.
But that is very misleading. The nature of passenger rail operation is very different than airlines. Flights overwhelmingly operate point to point. They board as many passengers as possible at the origin, fly to the destination, and then empty. There are few empty seats on airliners and if there are, the flight is dropped.
For trains, passengers are getting on and off at multiple points along the route. That is one of the operational advantages of trains. But, it also means that a certain number of seats will always be empty on a train at some points in the trip, even if the train is sold out for endpoint to endpoint travel. It is virtually impossible for a passenger rail service to approach a 100% load factor, or even an 70% load factor. Trains will always carry empty seats, and those seats cost fuel. So comparing energy cost really should be on a passenger mile basis: what each mode paid for energy to move the actual passengers it carried on a comparable statistical basis.
January is also one of Amtrak's slowest months, so that may have hurt the number a bit too. Not sure if that's slow month for the airlines too or not.
Unfortunately, this is a pretty common misconception, at least as far as oil is concerned.
There isn't enough untapped oil in the United States to sustain us for a very long period of time. For example, it is estimated that there's enough reserves in the fields in ANWR to supply the United States for a month or two; it'll take about ten years to develop the fields, and, at peak output, may supply 1% of our oil needs. Hardly seems worth the effort.
On the other hand, the United States has the largest known deposits of coal in the world. If we want to step back to the age of steam, I think we might make it.
If one keeps in mind that enough solar energy strikes the unpopulated areas of Nevada every day to supply the country's needs, it seems a bit silly to be mucking around in the ground to find supplies....
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