So the September report allowed me to update my estimates for profit and loss by route for the so-called long-distance trains based on *direct* costs, with the massive overhead stripped off.
Unfortunately I'm still using 2014 overhead for the estimate; the 2015 overhead allocated to the so-called long-distance trains won't be released until Amtrak's annual report comes out. If overhead is up (as it has been every year for several years) then all the trains are doing better than I think. If overhead is down then they're doing worse than I think.
And of course I'm still assuming 2012 proportions for the allocation of the overhead; if Amtrak's been doing jiggery-pokery with overhead allocation, these numbers will be wrong (trains which were allocated 'extra' overhead will be doing better than I think, trains which were allocated less overhead will be doing worse than I think).
None of this changes my main conclusion, which is in large print boldface below.
Anyway, from most to least profitable on an estimated *direct costs* basis:
Auto Train $43.6 million profit (overhead allocated is actually less than this, so it shows a profit after overhead)
Silver Meteor $13.5 million profit
Palmetto $6.4 million profit
Silver Star $5.1 million profit
Lake Shore Limited $0.6 million profit (sleepers are more profitable than coaches on this route, so adding Viewliner II sleepers should help)
Empire Builder $0.1 million loss (unfortunately costs will go up next year by several million due to on-time-performance payments to BNSF)
Coast Starlight $0.3 million loss (a 1% increase of revenue ahead of costs would make this profitable -- could happen in 2016)
Crescent $1.5 million loss
Cardinal $2.7 million loss (based on naive extrapolation, would be $2.9 million profit if daily)
City of New Orleans $5.6 million loss
Capitol Limited $5.7 million loss
Southwest Chief $6.3 million loss
Texas Eagle $7.3 million loss
Sunset Limited $12.5 million loss (based on naive extrapolation, would be $7.7 million loss if daily)
California Zephyr $14.2 million loss
The long-distance group as a whole is profitable before overhead -- $12.9 million -- thanks mostly to the Auto Train profits.
The phoney overhead-loaded numbers claim that it costs "$494.8 million".
The difference is $507.7 million in overhead which is arbitrarily assigned to the long-distance trains.
It's worth pointing out that if all of this overhead was reassigned to the NEC, THE NEC WOULD LOOK UNPROFITABLE even before considering capital costs. The NEC does not cover Amtrak's overhead.
I think this absolutely needs to be a talking point whenever anyone is talking to politicians about Amtrak. The *entirety* of the federal operating subsidy for Amtrak -- and more -- is going to overhead. Cutting any one train service will not reduce this overhead by one single dollar.
The vast majority of the overhead is used for the NEC or the state-supported trains -- for example, all but two of the maintenance bases handle equipment either for state supported trains or the NEC. (The exceptions are Sanford, which is probably accounted for as a "direct cost" of the Auto Train, and New Orleans which handles three long-distance trains. You might possibly argue that it would be possible to close Hialeah if lots of trains were cancelled, but the Viewliner group of trains generates $15.0 million in profits -- I doubt Hialeah costs much more than that, and it handles baggage cars for the whole system now too.) The reservations system and call center is necessary even if Amtrak is only running one train. Chicago Union Station, New York Penn Station, Philadelphia 30th St. Station, Washington Union Station, Boston South Station, Albany-Rennselear, and so on are all unavoidable costs which would exist even if the whole long-distance network were cancelled.
After looking at the 1978 Brock Adams report, it is really notable that Amtrak is in an entirely different financial situation than it was then. Back then, there actually were significant numbers of "money losing trains".
Now, the trains are profitable, they're just not quite profitable enough to cover overhead or capital costs. Which means Amtrak needs to get *bigger*, to leverage those economies of scale.
Financially speaking, the top priorities for the long-distance division should be:
-- Daily Cardinal (saves $5.6 million in ops funding)
-- Daily Sunset (saves $4.9 million in ops funding)
-- Viewliner sleeper deployment (should generate about $9 million / year net of op costs)
-- Cap/Pennsy through cars / CL & LSL reschedule (should generate about $1.1 million/year)
-- New Atlanta station for the Crescent (cutoff cars could improve the economics by $1.5 million or more)
Another interesting point: revenue was down for most of the long-distance division in 2015 (expected due to various disasters), but on several routes costs were down even more. Specifically, costs dropped by $8.2 million on the Southwest Chief, $8.4 million on the Coast Starlight, and by over $6.6 million on the Crescent. I'm hoping this isn't just overhead jiggery-pokery. But if it isn't, I wonder what changed? There haven't been any well-publicized changes on the SWC -- did Amtrak do something clever behind the scenes? I approve of cost-cutting which is invisible to the passenger.
:giggle:
