6.12.11

RETHINK THE BUSINESS MODEL.

The latest Destination: Freedom meditation on Amtrak at 40 years suggests that airline envy might have made sense when the carrier began operation, but it's hampering progress today.
In 1966, the back of the Pennsylvania Railroad’s system timetable featured a drawing of a duck with an obviously fearful expression on his face. He was afraid that he would soon become dinner for a happy passenger on the railroad’s fabled Broadway Limited train. The ad praised the railroad’s dining service and said that riders could enjoy a fresh-cooked and properly-served dinner in the dining car because the Broadway Limited was not an airliner; “it’s a train.”

Today, that duck’s descendents [c.q.] need have no fear of being sacrificed to the artistry of a dining car chef. The Broadway Limited been relegated to history, at least for the foreseeable future. So have many of the traditional railroad practices, from a standard tariff of fares, to certain on-board services. In many ways, today’s Amtrak travel experience seems closer to airline travel than to traditional rail travel.

When Amtrak took over the few intercity trains that remained in operation in 1971, it began life with an airline-style orientation. Roger Lewis, Amtrak’s first president, came from the airline industry. At that time, it was at least arguable that adopting the style of the airlines would be good for Amtrak. The 1960s was the era of the “jet set” who believed that trains belonged in the past, not the present or the future. After all, trains were slow and air travel was fast and “glamorous,” to use a word of the period that now appears quaintly obsolete. The 1960s was a decade of change on many fronts, and one of the changes was that passenger trains were removed from the rails as airlines caught on with the general public. Everybody seemed to believe that “Pan Am makes the going great,” and that they somehow needed to “fly the friendly skies of United.”
Airline deregulation turned the airplanes into flying buses, and "transportation security" has destroyed the speed advantage on trips in the 200-400 mile range.  Amtrak has been too busy with institutional survival to distinguish its product.
Today, America’s [passenger] railroad serves airline food, distributes airline-style miniature pillows, uses airline terminology and adheres to airline fare practices. New stations look more like airport interiors than train stations (examples are located in Milwaukee and Trenton), but at least they are still located downtown.

Some of the airline fads of the 1970s that Amtrak incorporated are gone, while others remain. Lewis made his crews get rid of their railroad uniforms and exchange them for new ones that made them look like airline pilots or flight attendants. When the disco-era uniforms eventually looked too dated even for Amtrak’s management, traditional uniforms came back. Amtrak redecorated the interiors of most of its cars in the 1970s in paint schemes of purple, orange, magenta and other “mod” colors. Fortunately, these garish cars can only be seen in railroad museums today. Unfortunately, this was some of the best equipment Amtrak ever ran, and most of it was taken out of service in the 1990s. Amtrak’s Amfleet equipment assumed an airline look, as well. The transverse cross section of those cars is more cylindrical than that of conventional railcars, mimicking the cross-section of an airliner. These cars have less headroom, side-room and luggage rack space than the “heritage” cars offered. The same is even more true of the cars that run on the extra-fare, high-speed Acela trains in the Northeast Corridor.
Yes, those heritage cars were good-riding cars, and the airline-emulating Amfleet cars (the author forgot to mention the rifle-slit windows designed with urban rock-throwers in mind) are now approaching the age at which many of those heritage cars were taken out of service.  (Some of them were restored to a more railroadlike interior look at the time they were converted to electric heating and air-conditioning.)

A possibly apocryphal story has one of Roger Lewis's successors as Amtrak president, either Paul Reistrup or W. Graham Claytor, describing the modish look as more suitable to a New Orleans whorehouse.  Judge for yourself, from these examples in the Illinois Railway Museum collection.


Paisley upholstery, double bedroom set up for day use.


Purple trim, sleeping car interior.


Reversing some of the errors, a more earth-toned look.

The interiors are more restrained in today's sleepers.



But the airline emulation continues on Amtrak, not necessarily for the good.
Even if Amtrak looks somewhat less like an airline than it did a few years ago, it still acts like one in many ways. Amtrak uses airport codes “LAX” for Los Angeles and “PDX” for Portland, Oregon, as if they were taking their passengers to the airport. Changing the symbols to LAU and PDU would indicate that Amtrak customers were going to Union Station, instead. Before Amtrak, the railroads offered comfortable pillows to overnight passengers, even though some charged a rental fee. Today, Amtrak’s overnight passengers are issued airline-style pillows, some of which squash down to a thickness of less than one inch. Amtrak often refers to its customers as “guests” (an airline term), rather than “riders” or “passengers.” The term could apply to sleeping car passengers, since the service includes hospitality features, but coach passengers are certainly not treated like “guests” in a hotel.
Another change I'd suggest is on the Hiawatha Service: change the Fowler St. Depot to MKD and the Milwaukee Airport station, currently MKA, to MKE and code-share with the airlines. There's a lot of connectivity from the planes to the trains, particularly when Milwaukee gets diverted Chicago trains.
Airline customers often complain that the airlines do not serve food anymore. Ironically, airline food is still available, and it has moved to Amtrak. For the most part, none of the food served in Amtrak’s dining cars is prepared on board. As a concession to popular demand, chefs cook some breakfast items, as well as the steaks for dinner, on the grill. Otherwise, everything is pre-cooked, just like the airlines used to make. When Amtrak eliminated its own commissary operations, it contracted with well-known airline caterer Dobbs, which changed its name to Gate Gourmet. Prices for Amtrak food have doubled in the last six or seven years, so the change from an in-house operation to a caterer that formerly specialized in airline food has been expensive for coach passengers. Sleeping car fares include meals, but the difference between coach and sleeping car fares can often be greater than the cost of accommodations at a resort hotel, which includes freshly-prepared meals (American Plan).

Amtrak also serves this food on disposable plastic plates rather than on china, on most of its trains. Some rail advocates have argued that it would be less expensive for Amtrak to hire a second person to work in the kitchen, washing dishes and helping with food preparation, so more menu items could be prepared on board. At this time, Amtrak does not appear to be moving in that direction.
The continued degradation of food service, in part at the instigation of a Congress that wishes to provide funding only for basic transportation for transit-dependent people, is costing Amtrak a lot in goodwill.  I repeat: without the dining cars, public support for a government corporation providing intercity trains would have been nil in the late 1960s.  Load management, however, is something worth pursuing.
Amtrak has also adopted “yield management” fare practices, which also come from the airlines. Riders going from Trenton to New York on New Jersey Transit, or from New Haven to New York on Metro North, know how much they must pay to ride. While regional railroads offer commutation discounts and reduced fares for senior citizens and persons with disabilities, and some still offer reduced fares at off-peak hours, the base fares are always the same. This is not so on Amtrak. Riders going from Washington D.C. or Boston to New York can get a fare quote from Amtrak, but it may only be good for that day. Fares on Amtrak can rise at any time, without notice. This is especially true on long-distance trains since, as seats or sleeping-car rooms are sold, the price goes up for the remaining seats or rooms. Amtrak does not have “a fare” between any two points. It has a variable fare structure, and those fares can change daily, especially during the period immediately preceding the day of departure.

Unfortunately, this may be one airline practice that is appropriate for Amtrak. Airlines essentially have a fixed capacity on a route, since it is expensive and difficult to run an extra section if a flight is sold out. Amtrak has a similar problem today. Amtrak is short of equipment, so every train has a limit to its capacity. Therefore, the entire system has such a limit. Amtrak was able to add a coach to its normal consist for the Silver Meteor between New York and Miami during the busy Thanksgiving travel period (a fifth coach; the normal consist calls for four), but that is about all the flexibility Amtrak has. Fifty years ago, the Atlantic Coast Line could have added two or three sleeping cars, four coaches and an extra dining car to feed the crowd. Amtrak cannot do this today.
Yes, but those extra cars cost money, and if most of the year they were sitting idle, the cost of keeping those cars in service might have exceeded the costs of a yield-management system. (There's a little-known secret: well into the era of decay of the passenger train service, your tax dollars paid to keep heavyweight Pullmans available should another troop mobilization be required.)
It would be more convenient for the riding public if they knew in advance how much they would have to pay to get to their destination. Amtrak defends its variable fares by saying that it charges what the market will bear for the limited space available. Unfortunately, although Amtrak is ordering more equipment, it is not ordering the large number of coaches that would be needed to generate significant additional capacity on the long-distance trains, or to add trains to give riders a choice of departure times. States like California and Washington ordered specific equipment for their Amtrak-operated corridors, and Illinois is considering placing an order for new equipment for the corridors in that state. This could liberate some of the Amfleet I or Horizon equipment now running in corridor service, but growth in corridor ridership may cause that equipment to be pressed into service for the additional frequencies that such increases in ridership will eventually require. Still, this will not help increase capacity for even the few long-distance trains that are running today.
There are some new long-distance single-level cars under construction for the eastern trains, which are well-and-truly worn out, but the Superliners will have to bear up in the west. Those state corridors are equipped or to-be-equipped with trains: the disadvantages of fixed formations and of a small fleet of trains compound each other.

Being cheap, however, alienates all sorts of possible passengers.
Amtrak cannot offer the speed of the airlines point to point over a long distance, even though airline regulations and practices have lengthened downtown-to-downtown travel time by air, during the past decade. That means rail is more time-competitive with air over longer distances than it was before. If Amtrak and local authorities can establish strong corridors between many city pairs up to 600 miles apart (to use the Federal Railroad Administration’s standard to define a “corridor”), this could provide a significant new ridership base.

The situation on the long-distance trains is different. Many riders take these trains for relatively short rides, since the train is often the only non-automobile transportation available. Others ride long distance trains to a major city, and still others ride the entire route and enjoy taking their time to get to their destinations. With more people retiring, this should become an increasingly-important market segment.
Faster and more frequent corridor trains, with better connections at hubs such as Cleveland, Chicago, St. Louis, and Oakland-Emeryville, including to the long-haul trains, is a relatively cheap way to build that trade.
Vacationers want to enjoy the travel experience, however. Rail travel is not as fast as air travel over a long distance, but it is civilized and comfortable for people who have the time. In the past, the railroads offered comfortable seats, delicious food in the dining car, and a convivial atmosphere in the lounge car. Amtrak can still provide these amenities today, but this would require a change of attitude on the part of Amtrak management.

It would also require spending some money, which Amtrak does not wish to do, with some justification. However, small touches like bigger pillows, a free refill of coffee in the lounge car (each cup now costs $2.00) and fresh-cooked food in the dining car are not expensive and may actually be cost-effective. If Amtrak makes the travel experience so pleasant that most of its trains are sold out, that would bolster Amtrak’s case for funding to buy more equipment.

Despite this, Amtrak seems more interested in cutting costs than in improving the customer experience. In effect, it would rather shrink than grow.
Indeed, although to the keepers of the fisc, that is a desired outcome.

1 comment:

Matthew Shugart a.k.a @laderafrutal said...

Very interesting post. Thank you.