The plan outlined in Amtrak 90 is designed to meet two major goals: to show that the Amtrak system can become economically profitable and that it can become a passenger rail system that is national in deed as well as in name. The following sections discuss the strategy and tactics for realizing the plan and provide financial projections.
The basic thrust to the strategy in Amtrak 90 is to increase revenues at a faster rate than expenses. This can be done by increasing carrying capacity and controlling the fixed costs, thereby maximizing existing investment in physical plant. The existing Amtrak network is in place and has a physical plant that is in generally good condition. Because of investments by Amtrak, the states, and the private railroads, the track used by Amtrak's trains is in better shape than a decade ago. Some expansion of stations and maintenance facilities will be required, and the quality of many stations needs improvement for purposes of customer attraction, but the basics are there. Additional investment for further upgrading of the physical plant is supplementary rather than basic. What is not there is an adequate number of cars and locomotives to provide the capacity to generate the revenues needed to attain profitability. Investment in rolling stock and locomotives is the main ingredient in the new strategy. The new equipment must then be used in a logical manner. Three steps are followed in the strategy of increasing revenues: (1) strengthen the capacity of existing trains by adding more cars, (2) place additional trains in service on the present network, and (3) expand the network by adding links between existing terminals that are not now connected.
The most economical way of increasing revenues is by adding cars to existing trains. No additional fixed plant capacity is needed and the cost of operating more cars per train is minimal. By Amtrak's own unofficial estimates, more than 1 1/2 million riders were turned away in the summer of 1980 because of unavailable space.
Though Amtrak has invested some $2 billion in equipment and to upgrade the physical plant, the money for equipment has gone for replacing old rolling stock with the new Amfleet, Superliner, or Turboliner equipment or with extensively refurbished conventional cars now dubbed Heritage Fleet, and placing new locomotives in service. While this was necessary, it was replacement, not additional equipment.
Adding a single Superliner coach and two Superliner sleeping cars to each of Amtrak's western long-distance trains would increase their capacity by about 45 percent. As expected, revenues would increase by a similar amount, yet the operating cost would increase only about 18 percent, for a significant increase in "profit" available to offset indirect costs. The same basic train crew is needed to operate a 6-car train carrying 300 people as to operate a 10-car train carrying 500.
As an operating comparison, Amtrak trains have an average capacity of around 325 passengers. Most European trains in main-line intercity service offer seating for between 500 and 600 passengers. The two newest trains in European intercity service, the British HST and the French TGV, have capacities of 419 and 386 respectively. However, in operation the TGV trains are usually made up of two sets with a total capacity of 772. American railroads have realized economies of longer freight train operations for years. The same principle needs to be applied to passenger trains.
There are limits as to the length, and hence capacity, of passenger trains. The need to minimize walking distance for passengers at stations has generally limited platform length to about 18 car lengths, or some 1,600 feet. Other limitations on train length include the capacity of locomotives to supply electricity for heating, lighting, and air conditioning. Nevertheless, within the generally accepted limits of 18 cars, passenger-carrying capacity can vary from 300 in a low-level, all sleeping car train to more than 1,100 in a train composed of bi-level chair cars.
Theoretically, the greatest potential for revenue enhancement by adding cars is on long-distance trains. Unfortunately the problem with strengthening long-distance trains in the short term is that most of these trains that serve routes west of Chicago are operated with bi-level Superliner cars. Amtrak received 284 bi-level Superliner cars between 1979 and 1981 and all are allocated. No additional Superliner cars have been ordered and older, out-of-service low-level cars that could be converted quickly to head-end power and refurbished are not really compatible with Superliner equipment.
Therefore, the greatest short-term opportunity for train strengthening lies in low-level corridor trains, and on the long-distance trains operating out of New York to Montreal, Toronto, Chicago, Florida, and New Orleans. On the shorter runs, particularly in corridors with multiple frequencies, the need for longer trains is greatest in peak hours and on certain peak days--particularly weekends and holidays.
Examination of travel patterns by all modes (rail, bus, air, automobile) on the routes served by Amtrak and testing of travel potential by the use of gravity models indicate that numerous segments of the Amtrak network show great opportunity for large-scale ridership increases if trains can effectively tap these travel markets. To do so, it is absolutely essential to offer a greater range of travel opportunities than present train service provides. Most intercity travel takes place between urban centers and is greatest between cities of large size that are closely spaced--a situation that exists along a number of Amtrak routes--e.g., New York-Cleveland-Chicago; New York-Pittsburgh-Chicago; Chicago-Detroit; Chicago-St. Louis; Boston-New York-Washington. On the first two routes Amtrak operates low levels of service, usually one train per day over the whole route. Only between Boston and Washington in the Northeast Corridor where frequent train service exists does Amtrak have a large share of the intercity travel market. However, the size and spacing of cities indicates great market potential on these other routes.
Here most of the intercity travel is short distance, less than 250 miles, and is very sensitive to travel time and to scheduling. The short-distance traveler wants to be able to go at a given time and often to return in the same day. Waiting to travel at only one specific hour is not satisfactory. European railroads recognize the sensitivity of short-distance travel to frequent scheduling; intercity trains operate at intervals as close as half-hourly in some countries. In West Germany major trunk lines have hourly service that interconnects conveniently at transfer points from one route to another, enabling the rail traveler to complete his journey quickly and to go whenever he wants.
Development of those segments of the Amtrak network where great potential exists for tapping into these kinds of markets is essential. Adding trains on these routes is the only way the market can be tapped. It is an economically efficient use of the rail system--stations and other infrastructure are already in place. One train a day performs rather poorly because few people are willing to adjust travel plans to fit the schedule. Rather, the schedules must be developed to fit the traveler's desire. A case in point is where Amtrak and the state of California collaborated to increase the frequency of service between Los Angeles and San Diego from three trains a day to six a day (a seventh frequency was added in 1981). In 1976 the three daily trains carried 463,821 passengers. By 1979 when the number of trains had doubled to six daily, ridership soared to 1,176,557, an increase of 156 percent. Over the same time period, the revenue/cost ratio increased from 29 percent to 82 percent, reflecting greatly improved economies of operation.
Incorporated into this plan is the development of those segments of the network where market penetration is maximized through the introduction of additional trains. Because of the severe shortage of locomotives and rolling stock and the time needed for new car orders to be filled, the introduction of these services can only proceed at a slow pace during the first two years of the implementation period. A few new trains can be introduced by using upgraded conventional rolling stock currently in storage and by reallocating equipment for more efficient use through shortened turnaround times, more efficient maintenance, etc. Large-scale addition of new trains and resultant economies can only take place beginning in FY 1985 when new cars become available in quantity under the Amtrak 90 plan. By FY 1986 these additions will result in a subsidy decrease of more than $150 million.
The placing of additional trains on a given route will also increase ridership on the existing train or trains, because as frequencies increase and the traveler is faced with choices that fit his plans better, rail becomes a more attractive option. The train then fits into a greater number of desired trip opportunities for potential travelers and is able to increase its market share.
Additional financial potential exists in expanding the Amtrak network. Expansion opens up new markets and provides access to points not now served by passenger trains, or allows more direct travel between places that are only connected by circuitous routings. New routes provide increased connectivity to the network and strengthen the existing portions of the system where they connect to trains already operating.
By increasing the network coverage, a truly national system is developed. Amtrak 90 details expansion from the present 24,000-mile system to some 39,000 miles (Figures 4 and 5) in eight years. An additional 35 million citizens would be offered the opportunity for rail travel and service would be extended to some 60 urban areas with a total metropolitan population of 19 million.
| Fiscal Year | Route Miles | Percent Annual Growth | Growth as Percent of 1982 Network |
| 1982 | 23,589 | - | 100.0 |
| 1983 | 23,663 | .3 | 100.3 |
| 1984 | 24,224 | 2.3 | 102.7 |
| 1985 | 26,289 | 8.5 | 111.4 |
| 1986 | 28,236 | 7.4 | 119.7 |
| 1987 | 29,889 | 5.8 | 126.7 |
| 1988 | 32,190 | 7.6 | 136.5 |
| 1989 | 34,993 | 8.7 | 148.3 |
| 1990 | 38,976 | 10.1 | 165.2 |
Network expansion would proceed slowly and would maximize the use of existing terminals and servicing facilities; most of the new routes would connect major metropolitan areas where rail passenger service is already established. It will be possible to develop some of these new routes without opening any new station facilities. For example, St. Louis-New Orleans service could be instituted by running a connecting train to Carbondale, Illinois, where a station already exists on the Chicago-New Orleans route.
The expansion will add more than 15,000 route miles to the system and train service will be brought to 271 additional communities. Only 111 of the new stations will be manned. Routes served by one or two trains daily in each direction will see unmanned stations at most communities of less than 15,000 population.
