Operating Performance Q4 2021 including Avoidable Expenses

For those who want some interesting data on "avoidable expenses." Also shows true revenue for state corridors without state payments. A look under the hood that you generally don't see too much.

https://railroads.dot.gov/elibrary/fy21 ... al-metrics

prokowave wrote: ↑Wed Feb 16, 2022 11:35 am This is fascinating. Although I did have to take some accounting classes, my understanding may be a bit fuzzy, so someone may want to correct me.

It would seem to me that:

• With many state corridors' revenue exceeding expenses, one could argue that Amtrak is overcharging many states. I.e. allocating an unfair share of costs to increase state payments.

• With the system-wide avoidable operating revenue only covering .53 of avoidable expenses, it makes one wonder what the unavoidable expenses are and why are they such a high proportion.

• The Coast Starlight's avoidable revenue/expense ratio of 14 dwarfs any other route. I wonder if they are shifting an unfair portion of the expense to the corridors that overlap portions of the route.

• Why are certain long distance routes' avoidable expenses so much lower than the fully allocated expenses? (E.g. Texas Eagle and Sunset Limited) If the ratio of 8+ is to be believed, it stands to reason that adding daily service would be highly profitable on that route.

The Coast Starlight understandably has fairly low avoidable expenses given a very large amount of shared expenses between it and state corridors. I don't think that means they are necessarily saddling the states with more costs than they should - it just means that the vast majority of the fully allocated expenses assigned to the Coast Starlight are shared expenses which makes sense given how many stations it has in common with the Cascades, Surfliners, and Capitol Corridor. If you look at the Surfliners for instance - there is also a gap between avoidable and fully allocated expenses on that as well. As the Surfliner's avoidable expenses wouldn't include any costs that are shared with the Starlight. It's also interesting to see what the true farebox recovery is on some of the state supported routes as that information isn't available on Amtrak's official documents (less than 50% on the Surfliners.) What some of this data does indicate though is that CUTTING the Coast Starlight could actually increase overall operating losses and state subsidies as it would place the full burden of the shared facilities on to the state partners. This is not to imply that LD trains are profitable - they most certainly are not - but what it does indicate is that NONE of this thing is profitable and the accounting is done to shift what shared costs they can away from state partners and on to their own funding. Mr. Gardner has in the past expressed an interest in actually DECREASING the 750 mile rule. This would allow Amtrak to shift long haul day running routes like the Carolinian to the long distance side - which would also allow them to start up similar services on their own without states - and allow the state supported business line to focus exclusively on short distance multi frequency service in dense areas.

This would allow them to startup some new day running once daily routes in places they want to expand like the South where states may be skeptical at throwing up funding. A successful train could then convince states to get onboard for a denser corridor - say around Atlanta.

That's of course assuming that sleeping cars are a money pit and that they are revenue negative, that the coaches on LD trains are better performing revenue wise, and that the trains would be better off revenue wise being all coach. I would state that at best that is unclear from any of this data. There simply isn't enough information here to make that conclusion one way or the other - one would need more information about what the actual avoidable and fully allocated costs are. What is the proportion of those fully allocated costs that is related to offering sleeping car and F&B service and other things unique to long distance service that are not avoidable costs to the Coast Starlight because they are common facilities shared with other LD trains and how much of these are fixed expenses related to host railroad access charges, T&E shared with corridors, maintenance shared with corridors, stations, yards, and other facilities that are shared with the corridors that operate along this route that would remain with daytime only service. Only with more visibility could one say for sure.

Given the distance this train runs between Seattle and Emeryville I'm not sure you could avoid overnight segments. The southern segment basically is a day running train already. There is nothing in law requiring Amtrak to operate sleeping cars - yet they continue to do so.