Amtrak LD travelers appear to be extremely non-elastic consumers, similar to Apple fanatics
(who will by a new model of iPhone regardless of price, even at $1,000).
Unconditional love for train travel blinds them and forces to pay outrageous prices for LD
travel.
Yet there are no signs that this phenomenon ever stops (and Apple is also alive and well,
and the number of nicotine smokers increases every year). Very hard to stop certain people
from "pleasing themselves" even if it does not make any economic sense.
I agree that demand is fairly inelastic, but I'm going to disagree strongly on the grounds. Yes, AU is often a room full of foamers, but I don't run into many foamers on the train. Most of those who take the train do so for reasons that are practical:
-Some airline markets are either awful or have a reputation as such. This is how I wound up on Amtrak in the first place.
-In the winter, at least Amtrak keeps running. I can't count how many "refugees" from the airline meltdown I ran into during the deep freeze last winter.
-Some people cannot fly, either for health reasons or due to personal phobias, etc. meaning that their choices are basically Amtrak, Greyhound, or driving.
-In other cases, the LD trains actually make a lot of sense (the NEC-Florida services fall into this category...taking the train to Jacksonville or Orlando actually works out pretty decently schedule-wise. Likewise, CHI-BUF, WAS-ATL, and a batch of other markets have this edge as well).
1-3 really are major factors outside of "tourist" segments like the Rio Grande line in Colorado. For a lot of older people who have some issue that makes flying a no-go, driving a thousand miles isn't a good option either. And there are times and places where the airlines really don't provide decent service at a reasonable price, particularly closer to the last minute.
I guess what I'd point out, in the end, is that while Amtrak demand may be inelastic in the face of declines in service quality, it's not like the competition is covering themselves in laurels with their conduct. There are plenty of folks who might not be thrilled with Amtrak's OTP but who simply can't stomach the idea of packing into a 28-30 inch seat on an airline for several hours (28 inches is Spirit's baseline offering, while a lot of domestic carriers are moving towards 30 inches *ahem* inch by inch).