Tuesday, December 29, 2009

Faster trains top Amtrak's list of needs

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Amtrak has been working hard to lure more business travelers to its trains, with advertisements highlighting its advantages over air travel - roomier seats, power outlets on its Acela trains and fewer annoyances, the New York Times reports. And its efforts have borne some fruit: the number of riders on its Northeast corridor trains has been rising.

But faster trains are critical to its future. So while Amtrak got some desperately needed financing from the federal government this year, its forecasts suggest that speedier rail travel in the United States remains a daunting challenge. For the Northeast corridor alone, Amtrak estimates that it will need almost $700 million annually for the next 15 years to maintain the system and to tackle a backlog of maintenance projects and upgrades. Reducing travel times between New York and Washington to two-and-a-half hours and times between New York and Boston to three hours - goals that were established in the 1970s - will require straighter track, improvements to bridges and tunnels, increased capacity through Manhattan and newer trains, among other investments.

Almost all of Amtrak's lines fail to make money, with a total loss of $1.1 billion in 2008. Even technology enhancements seem to move at a slow pace: developing a new electronic reservation system is expected to take until 2015. Still, Amtrak officials are more optimistic now than they have been in a long time. "We're probably in the best position to move forward to get the things done we want to get done and that the government wants us to get done," said David Lim, Amtrak's chief marketing officer. "We have an administration that is supportive of rail."

One of the biggest changes for Amtrak is that after years of bare-bones annual financing that limited the railroad's ability to make significant upgrades, Congress approved a five-year authorization in 2008 that allocates the system nearly $2 billion a year. Although the money still needs to be appropriated every year, Lim said, "the fact that there's a five-year plan makes a tremendous difference. Asking the government for your annual subsidy obviously makes it difficult to plan and execute capital projects."

In addition, the economic stimulus package approved by Congress early this year provided $1.3 billion to supplement Amtrak's capital budget and $8 billion in grants for intercity service and high-speed passenger rail. While those amounts will not go far in developing the bullet trains that operate in Europe and Asia and will probably be distributed among projects throughout the country, Amtrak officials say they view the investment as an important policy shift.

There are also signs that passengers are increasingly embracing trains. The number of Amtrak riders has increased steadily since 2001, surpassing 28 million in 2008, though a dip is expected this year because of the recession. Amtrak estimates it carried 63 percent of travelers flying or taking the train between New York and Washington in 2008 - an increase from 37 percent before the Acela service began in 2000. Amtrak's market share between New York and Boston was 49 percent last year, compared with 20 percent before Acela.

Amtrak hopes to push those numbers even higher, Lim said. The railroad plans to introduce free Wi-Fi service on all Acela trains in the second quarter of 2010, then add Northeast regional trains later in the year.

The ability to work on the train is one of the reasons Brian Silengo says he rides Amtrak for his weekly trips to New York from Washington. He uses a cellular wireless card to get Internet access, but as a sales executive for an interactive marketing agency, he mostly values the Acela trains' reliability.

"They're very good at getting you where you need to be on time," he said.

Although he said he would like to see the trains travel at faster speeds, a more important item on his Amtrak wish list is making the process for ticket changes and refunds easier. With future improvements to the reservation system, Amtrak plans to allow customers to make ticket changes online, and possibly allow passengers to print boarding passes at home. Lim said the latter option is more challenging because conductors would have to carry ticket scanners.

Another challenge for Amtrak is to price its fares competitively, yet find a way to improve its financial performance. An analysis by the Pew Charitable Trusts' project Subsidyscope calculated that 41 of Amtrak's 44 routes lost money last year. The average loss was $32 a passenger, though the Acela Express line earned $41 a passenger, suggesting that faster trains are crucial to profitability, according to the data.

"The Acela, of course, is the moneymaker," said Marcus Peacock, project director for Subsidyscope. "And that's the closest thing we have to high-speed rail right now."

Amtrak's Acela fares between New York and Washington range from $133 to $221 one-way, compared with $49 to $139 for the slower Northeast regional train. Advance-purchase airfares for the same route can be $150 roundtrip, an important consideration for travelers.

"Our clients look at the price," said Dave Kilduff, senior director of ground transportation for Carlson Wagonlit Travel, a travel management company, though he added that service and travel time are important, too, and that many travelers are surprised by their experience with the train.

"Once they try it, they see it's much more pleasant than they expected," he said. "The faster they go, the more people will get on them."

But to achieve those speeds, and turn Amtrak's blueprints into reality, some industry experts say what is needed is a broader transportation strategy rather than separate approaches to air, highway and rail travel.

"The United States doesn't really have an integrated transportation plan," said Robert L. Crandall, the former chairman of the AMR Corporation, the parent of American Airlines. He recently participated in a Transportation Department forum on the aviation industry.

"What is needed is some kind of overall plan, and it has to be done by the government," he said.

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