Are Amtrak's super-high fares sustainable?

The other day I looked at buying a regional ticket from CT to DC. It was $183, a few days in advance.

Given that $183 is now a one-way airfare to Europe outside of summer, is it really sustainable for Amtrak to continue charging these massive fares for slow, 40-year old trains?

I guess they charge what people are willing to pay, but I wonder if something is going to pop?

Pray tell, what airline is offering a $183 fare to Europe? I will gladly take multiple long weekend trips there at that price, regardless of the month.

Congress has insisted that Amtrak act like a private business with regard to NEC fares. Thus, some years ago, Amtrak abandoned the low-priced end of the market and has concentrated on extracting maximum revenue. So far, it has kept its trains relatively full. If and when that ceases to be the case, it can cut fares to keep the passenger volume up. I personally think that government policy should be aimed more, for broader societal and environmental reasons, at maximizing ridership, while maintaining reasonable cost recovery, but that's not what our wise overlords have decreed.

In the meantime, if you don't like Amtrak's fare for your intended trip, you have bus, car and air alternatives.

I just saw a fare from New Haven to Washington two-and-a-half weeks ahead for $66. Timing is important. Price goes up as available seats go down.

Yes.

next question?

Seriously... I look at it this way. I often have to travel to Philly from Albany.
It's cheaper and faster to drive (especially if I end up with a rental car at the other end).

BUT, I can work on the train. If I can work 1 hour in each direction, I'm breaking even. If I work more than that and get a nap in, I come out ahead.

If I want absolute cheapest, I'll get a Bolt Bus.

What the prior three gentlemen said. Unfortunately, the low end of the market is in the hands of bus operators, which use their greater flexibility and lower overhead to snag budget travelers. Amtrak doesn't have the same flexibility, so it has to count on its increased comfort and fixed station amenities.

As for Europe travel, I'd love one of those $200 fares too! Lowest I've ever seen in recent memory was about $500 RT on absolute bargain sale.

mtuandrew wrote: As for Europe travel, I'd love one of those $200 fares too! Lowest I've ever seen in recent memory was about $500 RT on absolute bargain sale.

$414 is todays price for the fall, rt from major US cities to major European cities

WOW is offering $299 from LAX to Iceland rt

Wow, the title of this thread sure is a loaded question. Apparently, the fares are sustainable, as the NEC turns an operating profit, defrays capital costs, and people are obviously willing to pay it in a very congested corridor.

Since our parent company is in Norway, and we usually have strategy meetings in October, I just went to check the veracity of this statement.

Houston - Oslo, Round Trip, for $890 (if you don't mind going via Istanbul, with a 14 1/2 hour layover). Over $1k otherwise. Flying Wednesday to Wednesday, with a Saturday stay, and off-peak prices.

I'm afraid the "Shenanigans" flag is being thrown.

For folks like myself who will only take Amtrak within the Northeast whatever the cost (pardon the pun) we can handle the fares. They're worth it since you get to fly past all that traffic on 95

Congress has insisted that Amtrak act like a private business with regard to NEC fares. Thus, some years ago, Amtrak abandoned the low-priced end of the market and has concentrated on extracting maximum revenue. So far, it has kept its trains relatively full. If and when that ceases to be the case, it can cut fares to keep the passenger volume up. I personally think that government policy should be aimed more, for broader societal and environmental reasons, at maximizing ridership, while maintaining reasonable cost recovery, but that's not what our wise overlords have decreed.

Yeah, this is true. But the problem is that Amtrak is leaving money on the table, because even when I do buckle down and pay $183 for a trip on half of the NE Corridor on the Regional, the train is never entirely full.

Amtrak may think it's maximizing revenue, but they actually aren't, because seats are being left empty. By definition, if Amtrak was doing the best it could to maximize revenue, its trains would be full.

Regarding cheap flights to Europe, I was speaking from the Northeast United States: on Norwegian, you can often find fares to Europe from NY and BOS for under $200. Same with Wow Air from BWI and BOS to Europe. Even on legacy carriers, I'm seeing lots of RT deals to Europe for less than $500 this fall. Follow "The Flight Deal" or "Secret Flying" on Facebook.

Anyway, my point is that Amtrak's pricing is not dynamic enough.

Strangely, a full train means they're likely leaving money on the table.

Think about it this way. If they sold every seat for $10/each, they could probably fill every train. At say 400 passengers, that's $4,000 a train.

Now let's assume they sell the seats at $100/each but only sell 300 of them. They're now earning $30,000/train.

Can they sell those remaining seats? "Maybe".
If they sell them for $10/seat at the last minute, they can earn an extra $1,000.

Unless everyone catches on and decides to wait until the last minute, and everyone tries to buy the $10 tickets. Either they end up buying them all at $10, or you only allow 100 to be sold, but now that everyone has waited until the last minute, they decide if they can't get it at $10/seat, they're not buying it at any price. So now you're only earning $1,000/train.

This is obviously an overly-simplified example, but that's part of what is going on.

On the other hand, Congress has also said that Amtrak can't discount too deeply no matter what.

And keep i mind too, it's more complex than simply loading a plane that has 2-3 stops. Here they may have to deal with passengers from Back Bay to Providence, and then the seat is empty until New Haven where someone gets on and rides to Newark, and then empty until BWI.

Each leg they might be able to charge $60/each. Or Boston-WAS for $150. Which is better?

Meanwhile a passenger from Providence to New Haven sees an empty seat and wonders why.

Thanks for that explanation -- yeah, it does make sense.

And I'm sympathetic to your comment about scheduling passengers, but German/Italian/French/Spanish trains seem to be able to accomplish this with ease -- there's a little digital sign over each seat indicating on which portion(s) of the journey the seat is occupied.

Amtrak may be able to do a better job of mixing access to rail service with generating profits by charging for a ticket, and then like the Germans, charging a little bit extra (less than $5) if you want a guaranteed seat.

This is why "demand pricing" fares maximizes revenues.
Basically, the fuller the train, the higher the fares are for the remaining seats.
If the train is 10% full, the remaining seats fares remain low to sell more; if the train is 90% full, the remaining seats fares rise to increase revenues. Amtrak's super high fares are seen on full trains, expect to see lower fares on empty trains.

Airlines really play the demand pricing game very well, if a flight has too many empty seats, that flight gets cancelled. With fewer flights that day, displaced passengers from the cancelled flights fill up the remaining flights, where fares can climb higher. I don't believe Amtrak hasn't taken that path yet.

Greg Moore wrote:... And keep in mind, it's more complex than simply loading a plane that has 2-3 stops. Here Amtrak may have to deal with passengers from Back Bay to Providence, and then the seat is empty until New Haven where someone gets on and rides to Newark, and then empty until BWI.

Each leg they might be able to charge $60/each. Or [end to end] Boston-WAS for $150. Which is better?

Meanwhile a passenger from Providence to New Haven sees an empty seat and wonders why [Amtrak can't fill the trains].

The airlines only count the in-plane portion of the passengers' trips, and don't count the time or the seats while the empty planes are on the ground being refueled and serviced at their hubs. So the airlines can report satisfyingly high occupancy rates, a model of efficiency shown by private enterprise.

Amtrak counts all the seats on its trains from end to end, including the seats open until the passenger gets on at the next stop or the next. In effect, with Amtrak, the trains carry along the uncounted empty seats that the airlines keep beside the gates inside the terminals for the passengers changing planes. As a result, Amtrak comes out with occupancy rates well below the airlines', making its trains seem inefficient, an example of "Soviet style" government incompetence.

No, Amtrak "occupancy rates" and airlines' "occupancy rates" are completely different methods of measuring.

Just another chapter in how to lie with statistics.

Amtrak also doesn't report occupancy for seats when trains are idle so the stats are very much Comparable in that sense. It's not lying, the modes are different. If amtrak ran point to point express trains it would be more comparable. That said, time spent out of service may not show up in occupancy rates but it does show up in the bottom line and return on capital. You can boost load factors by reducing your available seat miles (taking cars kff) and amtrak has done this to keep their overpriced trains relatively full. The problem is equipment costs almost as much sitting in the yard as it does in service so it's cheaper to lower fares than sit equipment. Amtrak does not report on its assets so if it is making inefficient use of its assets then it remains obscured. It's easy to see the difference between the way amtrak sits it's trains in the yard and airlines turn their planes quickly.
Anyways to the original point the fares are sustainable because amtrak is content with being a bit player. Ridership is far lower than it would otherwise be. The buses are up to almost ten percent of the market but the real competition are all the people who are still driving.