False Hope and Real Prospects for Passenger Rail
Amtrak’s annual report on the ridership of its intercity passenger rail services that was ballyhooed on the front page of USA Today revealed more than maybe the paper realized. On November 29th USA Today reported, “Tighter airport security and higher gas prices appear to be boosting Amtrak ridership in the Northeast, the South, and the Midwest.”
The article notes, “The greatest growth rates occurred among the 23 short-distance routes where states contribute money to Amtrak and dictate routes.” It might also have indicated that where the states have money invested, they do their best to make sure the service is worthwhile, which the ridership increases demonstrate. In unconscious illustration of that theme, the story cites the percentage increases in ridership on eleven specific Amtrak train services, all but two of which are state-supported routes. In contrast to the significant percentage ridership increases cited for specific trains or services, the story’s mention of Amtrak’s overall ridership increase of only 1.1 percent seemed weak at best. This hardly justifies the “Amtrak ridership up in USA” headline for the story.
USA Today also notes the 1.3 percent drop in ridership on long-distance routes, which Amtrak attributes mostly to “less than acceptable on-time performance.” That is a decline of about 50,000 riders, to 3,731,256 for the year, all attributable to two long-distance trains.
The story mentions only one actual ridership number, the total of 2,668,174 riders carried by Amtrak’s Northeast Corridor Acela/Metroliner service between Washington, D.C. and Boston, MA. That number masks the fact that, overall, Northeast Corridor ridership fell by 1.6 percent in 2006. The additional 215,272 Acela/Metroliner riders were more than offset by the decline of 360,613 in Amtrak’s ridership on its “Regional” Northeast Corridor services (and a ridership decline of 9,500 “special train” passengers). The net ridership loss for the NEC in 2006 was 154,901 riders in what is acknowledged to be Amtrak’s premium market.
The story cites an airline analyst, who explains why this happened. One Robert Mann says airlines drove passengers from air to rail in short-haul markets “by reducing the number of seats available for shorter trips and raising the ‘walk-up price’ of tickets on their shuttles.” Translation: NEC air shuttle fares were much higher than Acela/Metroliner fares.
This drove air passengers to Amtrak’s premium services, accounting for the 8.8 percent increase in Acela/Metroliner passengers, and permitting fare increases that bore a whopping 18.8 percent revenue increase for the year. Even more interestingly, Amtrak succeeded in boosting NEC revenues for Regional Services by 7.5 percent, despite the 5 percent decline in Regional Service riders. The article missed all of this.
By the way, NEC Regional Service, even with its 2006 decline, still carries more than two and a half times the number of annual riders that Acela/Metroliner service carries. Altogether, Amtrak lost 155,000 NEC riders in 2006, but raised its NEC revenues by more than $80 million. This is a hopeful sign that Amtrak is beginning to understand that it is indeed a commercial business.
In all of these instances, however, the article completely fails to provide any sense of perspective on the role that Amtrak, or its various regional and national services, play in the transportation system, or how many passengers they carry, or how much they lose or make. A review of Amtrak’s press release on 2006 ridership and its 2007 legislative request (PDF) will provide a wealth of insight.
A look at the airlines also lends perspective to Amtrak’s performance. In 2005, the most recent year for which the Department of Transportation has complete figures, the airlines carried 745.7 million passengers, 33.1 million, or 4.6 percent, more than they did in 2004. Note that the 2005 increase in airline traffic was about one-third larger than Amtrak’s entire 2006 patronage.
In this context, and over the long term, Amtrak’s series of annual ridership “improvements” amount to a lump of coal in an old-fashioned boiler. Amtrak’s fewer than 25 million passengers in 2006 are only a handful more than the 21 million it carried in 1979. In the meantime, the airlines have grown from about 170 million riders in 1979 to more than 745 million in 2005. U.S. population has increased during that period by the better part of a 100 million people, or 50 percent.
These results support the February 2003 recommendations of the Amtrak Reform Council, a bipartisan independent federal commission. ARC recommended that states be required to fund the operating losses of the Northeast Corridor and other short-distance corridor trains in exchange for a federal-state funding program for capital investments in track and equipment. For the long-distance trains, the federal government would continue to cover the operating losses, but would apply economic criteria to allocate funds to the trains with the best performance. With long-distance trains accounting for 15 percent of Amtrak’s total ridership, 27 percent of the revenues from train operations, and 43 percent of the train operating costs, it is clear that finding sound economic investments among the long-distance trains is a task that grows more difficult.
Tom Till is a Senior Fellow with Discovery Institute's Cascadia Center for Regional Development.
