Why is Coach so expensive?

[Green Maned Lion]

We'd get shot by the military.

 

[jis]

It is relatively hard to separate things out sufficiently to be able to make very categorical statements like "makes money" or "does not make money" because the accounting is complex.

We see an example of this in the way Amtrak accounts for state funding for Section 209 trains. If you consider the act of running Section 209 trains to be a matter of contract, wherein the state agrees to certain charges in exchange for getting train service run for them, then that charge would and does appear as revenue for Amtrak - the whole idea being that in general the goal from Amtrak accounting perspective would be that state paid support plus ticket revenues show up overall on Amtrak books to be greater than or equal to the cost of running the operation, and hence non-loss-making. So is the money paid by states a "subsidy" or a standard business contract "revenue" for Amtrak? If Iowa Pacific were running the service instead how would it be viewed?

Similarly, Indian Railways is given all sorts of capital project grants and operating grants for specific so called strategic project, like building a railroad high up in the Himalayas mostly for the use of the armed forces and incidentally by the few citizens that live up there too, which no one would build absent that imperative. The operation of such lines tend to be a huge money sink too. That is accounted for in strange ways in the accounting, and I am not quite sure how it shows up. The main point being, without spending many tens of hours digging into the details of the accounts it is hard to tell what the gross number showing:

Total Receipts - Rs. 1,64,374 cr; Total Expenditure – Rs. 1,49,176 cr

for the 14-15 budget actually means. On the face of it it is making money. But what exactly counts as "Receipts?", and which of the actual expenditures are allowed to be counted "off books". It is pretty weird and complicated I am afraid, and I don;t have the time or inclination to figure it out.

 

[Silver Star rider]

Years ago, when they were going to raise the Subway fare in New York City, they wanted to have the ridership pick up more of the cost of a ride. They said no passenger rail service, and at the time, only were talking about US, paid 100% of the cost of the ride.

I know it was true at one point, but maybe not now. A national rail service is in nations national security interest. It is the best and easiest way to move our armies across the country in times of emergency.

Bruce-SSR

 

[afigg]

At the risk of wandering further off-topic, today's Washington Post has an article on the Indian railways: India’s Narendra Modi dreams of a modern rail system, but hurdles abound. Claims that the total losses were about $5 billion USD last year, but for a system as large and complex as India's, the total loss is likely a guess estimate at best and not that bad on a per passenger basis.

 

[crew]

Ok, I'm going to probably get flamed for this but, "Why is it wrong for Amtrak to charge a price that covers its cost and make a profit?"

Because no passenger carrying rail line does.

SNCF, Renfe, DB Bahn, Taiwan HSR, the various JRs, China Rail, and others would like to have a word with you regarding your misapprehensions.

Ok, you get what you asked for;

Googled

SNCF: From Wikipedia

SNCF (Société Nationale des Chemins de fer Français; "National society of French railways" or "French National Railway Company") is France's national state-owned railway company and manages the rail traffic in France and the Principality of Monaco. SNCF operates the country's national rail services, including the TGV, France's high-speed rail network. Its functions include operation of railway services for passengers and freight, and maintenance and signalling of rail infrastructure owned by Réseau Ferré de France (RFF).

Well it's state-owned and they operate both France's passenger and freight railroads. Freight is where the money's at. We all know that.

Renfe:

Renfe Operadora (Spanish pronunciation: [ˈrenfe opeɾaˈðoɾa]) is the state-owned company which operates freight and passenger trains on the 1668-mm "Iberian gauge", 1435-mm "European gauge" and 1000-mm "Metre Gauge" networks of the Spanish national railway infrastructure company ADIF (Administrador de Infraestructuras Ferroviarias—Railway Infrastructure Administration).

Also state-owned and operates both passenger and freight.

DB Bahn:

Deutsche Bahn AG (DB AG, DBAG or DB) is the German railway company, a private joint-stock company (AG) with the Federal Republic of Germany being its majority shareholder[2] with its headquarters in Berlin.[3] Deutsche Bahn describes itself as the second-largest transport company in the world, after the German postal and logistics company Deutsche Post / DHL, and is the largest railway operator and infrastructure owner in Europe. It carries about two billion passengers each year.

Deutsche Bahn (literally "German Railway" in German) came into existence in 1994 as the successor to the former state railways of Germany, the Deutsche Bundesbahn of West Germany and the Deutsche Reichsbahn of East Germany.[4] It also gained ownership of former railway assets in West Berlin held by the Verwaltung des ehemaligen Reichsbahnvermögens.

The majority shareholder is the Republic of Germany and again DB Bahn is not a passengers only railroad.

In December 2007, DB reorganised again, bringing all passenger services into its DB Bahn arm, logistics under DB Schenker and infrastructure and operations under DB Netze.

The DB is owned by the Federal Republic. By the Constitution, the Federal Republic is required to retain (directly or indirectly) a majority of the infrastructure (the present DB Netze) stocks.

That quote sure does sound like the German taxpayers subsidize heavily the DB.

I could go on but I discern a distinct pattern already.

De la Wiki: "In 2007, SNCF generated profits of €1.1 billion (approximately US$1.75 billion, £875 million) driven largely by higher margins on the TGV network.[5][6]"

 

[jis]

Depends on how you characterize the subsidies for the TER services provided by Ile de France and other departments.

Sent from my iPhone using Amtrak Forum

 

[Paulus]

Depends on how you characterize the subsidies for the TER services provided by Ile de France and other departments.

And given that SNCF Proximités includes a lot of international stuff plus contracted commuter service, untangling that would be a rather annoying feat.

 

[Ryan]

But I thought I could just Google it?

 

[Paulus]

But I thought I could just Google it?

And here we see you didn't even bother with that most elementary of feats! In any event, I take the view of TER subsidies and the like being payment for services rendered ("We like trains, please give us one"), just as payments for specially low priced tickets are merely compensation for a state policy rather than a subsidy per se. And it's also the case that the others are rather clearer.

 

[jis]

The only problem with that line of argument though is that you will convince no one who wants to take the position that rail does not make money absent funding of service from sources other than ticket revenue. Of course they will also ignore that no other mode of transportation meets that high bar either. I agree it can be quite frustrating. That is the reason I tried to spell out the core issue with clear examples above.

 

[Paulus]

The only problem with that line of argument though is that you will convince no one who wants to take the position that rail does not make money absent funding of service from sources other than ticket revenue. Of course they will also ignore that no other mode of transportation meets that high bar either. I agree it can be quite frustrating. That is the reason I tried to spell out the core issue with clear examples above.

There are other companies which are better broken off and with SNCF I prefer to point out SNCF Voyages which isn't the recipient of such payments to my knowledge.

 

[jis]

I completely agree that there are several rail business units that provably make money. SNCF Voyages is a good example of such.

Similarly as I mentioned, Indian Railways prestige Rajdhani and Shatabdi service does. OTOH in case of IR the whole passenger operation does not, and yet the whole of IR does sort of.

 

[Ryan]

But I thought I could just Google it?

And here we see you didn't even bother with that most elementary of feats!

Yeah, I was a little tied up with my Grandmother's funeral today. Sorry I couldn't snap to your will and google up the citation I've been repeatedly asking for from you. It's been more entertaining watching you flip flop back and forth between "It's simple, just google!" and "Yeah, this stuff is really complicated".

At the end of the day, it doesn't really matter, since you seem to be conceding subsidies of some form are necessary.

The only problem with that line of argument though is that you will convince no one who wants to take the position that rail does not make money absent funding of service from sources other than ticket revenue. Of course they will also ignore that no other mode of transportation meets that high bar either.

That's my position exactly - however, I don't ignore that no other mode of transportation meets that bar. I've said exactly that many times over.

Why people hold rail to that standard when they don't hold other modes to the same standard is the part that baffles me.

 

[VentureForth]

The only problem with that line of argument though is that you will convince no one who wants to take the position that rail does not make money absent funding of service from sources other than ticket revenue. Of course they will also ignore that no other mode of transportation meets that high bar either.

That's my position exactly - however, I don't ignore that no other mode of transportation meets that bar. I've said exactly that many times over.

Why people hold rail to that standard when they don't hold other modes to the same standard is the part that baffles me.

Don't die of a heart attack, but I agree, too. Sort of. There are train lines that make a LOT of money and can pay operations & maintenanace, service debt and build new equipment. Take the Shinkansen. Heck - maybe even the NEC!

But if these individual money making lines existed alone - with the infrastrucure feeding them removed (ie: the rest of JR and Amtrak, respectively), they would most likely falter and die. Therefore, it's in the companies best interest to subsidize lines with less performance to actually feed the huge money makers. That puts companies like Amtrak in the whole because unfortunately the losers lose more than the winners can give them. JR has taken that a step further in diversifying in multiple business units (like IR diversifying in freight) to having mega buildings at their major stations for office rental, hotels, shopping plazas, etc. They've even gone so far to create their own power and sell it back to the utilities when there is excess.