http://news.yahoo.com/news?tmpl=story&u=/nm/20050202/us_nm/bush_amtrak_dc

Bush Budget to Scrap Subsidy for Amtrak-Sources

WASHINGTON (Reuters) - The Bush administration will for the first time propose eliminating operating subsidies for passenger train operator Amtrak as part of a push to cut budget deficits, people close to the budget process said on Tuesday.

President Bush's fiscal 2006 budget, which he will send to Congress on Monday, will allocate no subsidy for Amtrak to run its trains. But it will offer $360 million for maintenance on the flagship Northeast Corridor between Washington and Boston -- which Amtrak owns -- and for commuter services....

Other crucial tidbits of information from the article:

Amtrak has never made money in its 34-year history....

Sen. Patty Murray (news, bio, voting record) of Washington, the ranking Democrat on the appropriations subcommittee on transportation and a strong Amtrak supporter, said she was deeply concerned about the budget move.

"For four years they have played budget games and fought congressional efforts to keep Amtrak afloat," Murray said.

"Now, despite the fact that Amtrak has gone to great lengths to get their costs under control and run more efficiently, the president is again offering a budget that sets the rail service on a course to bankruptcy," she added.

Good, I hope Amtrak does go under (and you can spare me the sob stories about people losing their job). Amtrak is one of the biggest wastes of taxpayer dollars and the fact that they have never even turned a profit in thirty four years of operation is absolutely deplorable. If airlines are not recieving subsidies every year, neither should our antiquated train system. Realistically, there are only a couple of Amtrak routes that should be able to turn profits, most importantly the Boston-Washington route. Who would've thought that the honorable Patty Murray (S-Washington) would support a blackhole like this?

Well, I'm a fan of rail travel now, and I'm glad I got the chance to ride Amtrak last week.....but I read that the Crescent loses around $987 per passenger round trip.

If people want it they need to be willing to pay for it, if not then it should go by the wayside. Busses will pick up the slack. I would like to see a job retraining program for the employees of Amtrak, but they need to have a plan as you cannot lose money forever on a non-essential service.

Excellent news. Cutting government welfare programs is good thing. If only Bush would do more of it! Or any of it, for that matter. This'll probably be the first subsidy cut of his tenure, period.

Well... the US never had the infastructure, geography, or demand for passenger rail after the advent of passenger air-travel and interstate highway. Not suprising really... some corridors could support European/Asian-like high-speed rail, but I'd consider those the exception, not the norm...

I suppose this means a major reduction in Amtrack service?

The END of Amtrak I reckon. Most of their abandoned lines will now be used exclusively for cargo.

Not too much of a surprise. With their exorbitant prices ($150) on the Pacific Surfliner from LA to SD, no wonder air travel is the better alternative.

ThanK God! Hopefully this will be the first of many more subsidy cuts.

Sorry to see the trains going . . . . it is a unique way to travel.

I don't think Congress will let this happen . . . not a total elimination of the subsidy anyway.

Should make for interesting reading in my next issue of "Trains".

I'm looking at the brand new control tower being built here at PHX right now. What airline is paying for that ??? American airlines are the most subsidies things in America. Runways, terminals, ATC, security, Trains would solve a lot of problems but nobody wants to lobby for them. Black holes ??? Usair, United, those are some black holes too.

I'm looking at the brand new control tower being built here at PHX right now. What airline is paying for that ???

First... landing fees, terminal rent, passenger taxes, ect, pay for those improvements. Have you been in a barn?? All those extra fees on tickets post 9/11... they go to security improvements and infastructure enhancement

Second... most airports are owned my municipalities, not the U.S. government

Third... the Federal Aviation Administration is a royal joke and cannot make infastructure improvement if our lives (literally) depended on it. Take a look at the massive failuers in next-generation weather, navigation systems, ect. The government's inability to modernize equippment is the outrage...

[Edited 2005-02-02 04:52:00]

Dc10guy has a point though... why is it OK for the government to pay to build highways, but not OK for them to pay for or subsidize mass transit?

If this goes through, the (little) respect for Bush I have had will go wayside. You cannot tell me that the UNITED STATES OF AMERICA cannot have a successful intercity rail system. Amtrak was used by 25.1 million people last year. No rail system can be successful without government subsidy. If this goes through, something like 35 states will lose all rail service.

I realize Amtrak may seem inefficient and wasteful to some, but to others such as myself, it's a very enjoyable way to travel, and I would gladly pay more in taxes to see it thrive and prosper. But maybe that's just me. Amtrak has not been funded properly from the get-go. It has hundreds of cars out of service that it does not have the $$$ to fix...track work needs to be done....stations need overhauls....the list goes on and on. Amtrak just gets enough money each year to "hang on" and provide basic service. And people complain about how old the train cars are, etc. Those are very shortsighted people obviously who know little about Amtrak and where it stands.

But, as David Gunn has said, if Amtrak is forced to cut the long-haul routes, he will cut the whole system...Northeast Corridor included. And that would be the right thing to do in my opinion. It's all or nothing Bush. I hope you'll enjoy being responsible for leaving thousands of commuters in the Northeast being forced to drive or to fly to get to work. I'll just sit back and laugh probably.

In all honesty, it won't come down to that, Amtrak has just as many supporters out there as it does opponents.

Amtrak was FORMED by the government back in 1971 because the freight railroads wanted to get out of the passenger rail business. The government never really had a good plan for it from the beginning. Instead of really investing in it so that the railroad could thrive, they just kept it in a constant state of stagnation. Nothing much ever changes at Amtrak. There is no money to add any new routes. No money to add any more frequencies on existing routes. Not enough passenger cars to add new routes even if they did have money. You get the idea.

I do not believe it is right for Bush to kill off Amtrak as it was never really given all the tools it needed to be successful from the get go. Hell for the first ten years of its existence it was still using rail cars from the 40's and 50's! Not until the mid/late 70's did the railroad get new equipment. And now those cars from the 70's (which still form the backbone of today's fleet) are getting close to retirement or at least massive overhauls. But, once again, no money to do this.

Amtrak was never MEANT to compete with the airlines on long-distance routes. It is simply an alternative. And it provides a vital lifeline for hundreds of small communities across this nation. People use the long haul routes for vacation, for business, and for intercity transportation.

Support Amtrak.

I don't lik government subsidies either, but rail travel is so much more environmentally friendly than auto travel... And although the infrastructure needs improvement, many rail lines run through such beautiful and interesting areas. I'll be really sad if this means the end of Amtrak.

http://www.narprail.org

I find it amazing that anyone would think that airports are paid for with ticket taxes. The ATC system alone costs at least 10 times what any ticket tax brings in. In Indianapolis the state government is paying for moving interstate I-70 and another new runway just for Fedex. Airlines are subsided. Passenger rail is need, nobody is lobbying congress for it. That's why its dying. I'll bet we could have a great rail system with the money we've pissed away in Iraq.

Hmmm... here's an idea:

- Why not have the Federal government conduct an auction to award, say, a fifty-year concession to provide passenger rail service to a private firm?

- All bidders must meet requirements to ensure levels of service and capital investments.

- The process would be open to all interested parties, including foreign operators, to maximize the value of the asset.

- All bidders are evaluated on a simple criteria to keep the process as transparent as possible. For example the bidder providing the highest annual 'royalty' to the government and/or commiting the most to capital investment wins the auction.

- Indeed, the government could even award different concessions to separate geographic regions.

- Fares could be set by the concession operators and would be set by the market.

Why doesnt the government stop subsidising air travel?

We, the taxpayers subsidise air travel through our local governments by paying for the construction and maintenance of our airports. Dont give me this crap that well fees pay for the airports, which is not true. Tell that to the Miami Dade and Broward County tax payers.

When airlines build their own airports then I will not support subsidies to Amtrak.

I haven't ever been on Amtrak. I'll have to take a train ride once before their subsidy gets cut.

TW

9-11 showed us that we shouldn't put all are eggs in the airplane basket. Passenger rail is needed. Maybe Amtrak isn't the answer but the government shouldn't give it up.

Amtrak is wonderful. It could use a little fine touching up here and there but that is because the government has always treated it like a bastard child. It is a shame. It is a great way of traveling and it's..unique...look at Europe and Japan, etc. and how wonderful their rail service is over there. It's "the thing to do". Some cities are limited on public transportation and that is a shame, particularly from the airports. Something should be done about that and I think rail needs more focus...and a system needs to be developed for high speed rail to be put into place.

Bush is just going about this to find ways to pay for his ever precious war and to make his miserable failure look less of a miserable failure in any way possible.

Keep Amtrak.

What airline is paying for that ??? American airlines are the most subsidies things in America. Runways, terminals, ATC, security. Dont give me this crap that well fees pay for the airports, which is not true.

Tower: Airline Ticket Tax (FAA)
Terminals: Airlines Rents and Charges and Consessions. Improvements about 5-10% PFC's
Runways: Airline landing fees, Parking fees, Rents and Charges, paid by the airlines.
Security: TSA functions Ticket Tax/Security Systems PFCs and Airline Rents.

Get your facts straight. For improvements, airports issue bonds, bonds are paid back using Airlines rents, landing fees and consession revenue. Some items which are government mandated are paid for with PFC's (I.E. Security equipment upgrades post 9/11). Federal Government items are covered in the airline ticket tax such as ATC, Landing systems and approach lights.

Tell that to the Miami Dade and Broward County tax payers.

Somehow I doubt that.

Boeing 7e7, How many Bonds are Usair & United paying back right now ??? What about ATA's Brand new terminal at MDW. Do you think ATA paid anything for that ??? And all the homes that are bought and torn down because they are in the "noise foot print" of an airport, Are the airlines paying for that ? Here's some help .... The answer is NO. The tax payers are footing the bill ... Which isn't a bad thing I think Amtrak needs help too.

How many Bonds are Usair & United paying back right now ???

This is an incredibly rare exception.

What about ATA's Brand new terminal at MDW.

The airport paid for it. Gate space operates on a shared expense system where all of the rent is divided across the airlines which operate at the facility. Think of it as an apartment complex, only with gates for aircraft.

http://www.flychicago.com/doa/avi_news/doa_avi_news_pr_54.shtm

http://www.flychicago.com/doa/avi_news/doa_avi_news_pr_40.shtm



And all the homes that are bought and torn down because they are in the "noise foot print" of an airport, Are the airlines paying for that ?

Once again, as the leaseholder, the airport does.

Here's some help .... The answer is NO. The tax payers are footing the bill ...

Ummm... No. Do some reading on airport finance.


[Edited 2005-02-02 07:39:30]

Amtrak needs a lot of help (which it should have been getting all along) but it will not get anything from this incompetant administration. The government would rather see a major airline that is losing over $200 million per quarter survive than the only passenger rail system in the U.S. Something is wrong here. The government needs to understand that there is a market for both air AND rail travel in this country, both short and long haul. It amuses me that some people cannot grasp that concept.

Well thanks for clearing things up Boeing 7E7, All this time I was thinking that the government ran the Airports & the ATC system. Funny thing I never see any Americawest people working on the ILS here at PHX ??? And the people in the control tower, are they Southwest employees ??? Usair & United being in bankruptcy isn't rare. Remember Eastern, Panam, Braniff, Frontier, How many "bonds" did they leave for the tax payers ??? Wake up dude.

I already explained to you who pays for what. Try educating yourself.

The government loan program to US and UA are rare as a direct result of 9/11. Are you on Mars?

The FAA operates towers, maintains approach lights, landing systems and the national airspace system.

Airports are special districts charged with managing the airport, the airfield lighting, the terminals and on and on and on.

Passengers pay a ticket tax, which goes to the Fed for the FAA and TSA.

PFC's are paid to help suppliment capital improvement which is otherwise paid for by other sources of airport revenue SUCH AS AIRLINE RENTS, LANDING and PARKING FEES.

None of it is local taxes. If you don't fly, you don't pay for it. It's a user based highly regulated environment and if you F-up, you lose your bond rating and your ability to make further improvements.

You're wrong on this issue. GET OVER IT!

Here's a nice little annual report for you to read:

http://www.lawa.org/docs/MDA_LAWARpt_011404.pdf

[Edited 2005-02-02 08:28:28]

[Edited 2005-02-02 08:43:20]

The reason that the freight railroads handed their passenger trains to Amtrak was that it got them out of their obligations to maintain that money losing service. The reality is that David Gunn's threats are music to the ears of railroads like UP, BNSF, CSXT and NS. They could make a lot more money by filling the slots that Amtrak uses with intermodal or unit trains. Amtrak is in fact succeeding in its real mission, to kill off the intercity passenger train.

DC10 gyuy,

you got it right.

It happens that - I explain for the blinds - Bush is making all he can for 4 years now to make oil companies earn more money. Don't you really see it people ?

It's no problem for him to subsidies Airlines or defense companies, but giving money to upgrade the train system in the US or the efficiency of powerplants is not possible. We better dig for oil in Alaska and promote travel by cars. A small war in the middle east can also help, especially if his friends at Halliburton can sell gas to the military at the price they want.

Excellent news. Cutting government welfare programs is good thing. If only Bush would do more of it! Or any of it, for that matter. This'll probably be the first subsidy cut of his tenure, period.

This coming from the genius who didn't vote because it 'legitimised government'.

"I explain for the blinds - Bush is making all he can for 4 years now to make oil companies earn more money. Don't you really see it people ?"

Bush wants to put the final nail in the coffin of a rail service nobody uses. How is that making more money for oil companies? If nobody is riding Amtrak I doubt their closure will push that many more customers towards airlines.

"but giving money to upgrade the train system in the US or the efficiency of powerplants is not possible"

Someone is clueless. There are tons of subsidies out there to make power plants cleaner and more efficient. Taking advantage of those subsidies still requires some investment from the power companies (often 10s of millions of dollars), many of which are publicly traded companies, meaning they have shareholders to please instead of just tree-huggers. Doing a major renovation on a multi-billion dollar power plant isn't something most companies take lightly either.

Amtrak's biggest problem is not being profit motivated. As long as they got their subsidy and as long as they were being run by politicians they were sure to fail, just like every city bus system in the country. If they were privitized maybe they would start to care. I just don't see how anyone could justify to their employer or to themselves taking 3 days to get from Chicago to DC when an airline could do it for them in 3 hours. I know if I only get 2 weeks of vacation a year I am not about to burn almost half of it sitting on a train. The reason passenger rail died in this country was air travel and interstate highways made other modes of transportation more logical. It doesn't help that Amtrak doesn't really go anywhere. If you want to send freight a long distance rail is the way. If you want to send a person a long distance put them on an airplane, it is faster and many times costs about the same.

"I explain for the blinds - Bush is making all he can for 4 years now to make oil companies earn more money. Don't you really see it people ?"


So why did his administration just cut rail service to all the Red States? California, Illinois and the Northeast will all still have rail service provided by regional carriers like Metra, and Amtrack will continue in the Northeast. So I don't think this has anything to do at all with Bush or the Republicans more to do with a $60 billion deficit. By the way the Amtrack cut back with still leave us with $59.3 billion of needed gov't reductions to balance the budget....

I would suggest liquidating US Airways and United next and having them pay back money they still owe the US gov't from bankruptcy protection. That would take another $2 billion off.

Or you could save us from any cutbacks and go after all the US companies now residing in tax havens in The Caymans and Bahamas.

Forgot to add link...

http://www.taxfoundation.org/sr126.pdf

This shows the decline of corporate share of tax reciepts from 1970-2003

In 2000 Corporations paid $207 billion

In 2003 despite record profits for the DJ500 Corporations paid just $143 billion

That looks like $64 billion to me....

Hmm could that be part of the reason for our $60 billion deficit?

I would suggest liquidating US Airways and United next and having them pay back money they still owe the US gov't from bankruptcy protection. That would take another $2 billion off.

Ever hear the phrase "you can't get blood from a stone"

Just because US and UA have billions in assets on the books doesn't mean those assets actually have a fair market value in the billions.

To get money for a 10 year old 747 that still has a book value of a few million dollars you must first find a buyer. That buyer knows you NEED to sell that thing, so they are going to offer next to nothing for it. You end up taking a several million dollar loss. This is one of the perils of accounting, big items are recorded at historical cost, which often has nothing to do with market value.

Except for the Northeast Corrordor, some trains in the Chicago region and West coast, trains are rarely used for long distance travel in the USA. If one has to go from NYC to Phildelphia, then unless using a car or bus, the train is the best way, especially if going downtown to downtown. For far too many years politicans along the long distance routes forced Amtrak to keep them running despite huge losses. The operations of Amtrak passanger services has priority over freight runs where they use freight tracks and often delays freight trains, at great cost to the railroads. In the Northeast corrorder, they have exclusive passanger train tracks for them and for use by regional passanger train services. With very few employees and places served in an economic way, subject to outmoded work rules, Amtrak needs to be ditched and replaced only where absolutly needed by a contracted private corporation.

CaptOveur,

I know this belongs in the aviation forum but how much do you think the market value of all of US and UA's assets are worth? I have no idea but would it would be interesting to know. Of course my remark above was sarcastic and as a DC resident I would never want to shoot myself in the foot by closing down both of our primary airlines.

But I would think that the market value of UA's Denver and O'Hare terminals and slots alone would be close to $500 million. But your right and I see your point that the market value for the ac and the rest probably wouldn't amount to much.

The idea that this is an issue about oil is kind of a reach. This is an issue of need versus cost.

The people who are pulling for Amtrak have my sympathy, but not my support. The reason the railroad companies had to give up their passenger lines is the same one that forced steamship lines out of passenger hauling. No one wanted to pay what it cost to ride.

The problems of the airlines now, legacy lines that is, are primarily related to their age and the liabilities built up with pensions, bloated payrolls (compared to the much younger LLC's) and route structures that include money losers originally required by the government so more people have access to travel.

Rail travel, while fun, is extremely slow for long distances and not suitable to the requirements of most people. I believe also that the people running the rail systems have not properly executed an effective marketing campaign to illustrate the leisure travel draw for trains.

I think that if you compared the recent emergency subsidies for the airlines against the last thirty plus years of government operating subsidies for Amtrak you will find that the ratio of money spent to number of system users and employees make it more logical to help the airlines during a crisis than it does to prop up a rail system that no private company wants.

I read earlier that we should bid it out to private companies. Well the problem there is you will find it difficult to get someone to bid on long distance passenger train service, as no one can figure out how to make it turn a profit.

Even with the low fares that do not pay the freight, the trains are not running full, and the economics of using the trackage, which belongs to the major rail companies (BNSF, UP, NS, CSX) make it much less efficient than it could be, and there is little that can be done about this, as the cost of purchasing land and constructing tracks would be incredible.

Even in Europe the passenger railroads are heavily subsidized and would not make it without support. If anyone wants long distance rail travel to remain a reality they are going to have to illustrate a definite need, not want, to pay for it out of our taxes to the general population who are the ones who can influence congress.

Anyone have any points that logically show a need for this service?

Even in Europe the passenger railroads are heavily subsidized and would not make it without support

True, but look at it this way: If governments don't invest in railroads, they'll have to invest far more in roads and highways (for the shorter hops) and airports (for longer routes). And that does not exactly come cheap either... Rail travel has two main advantages over road traffic:
1) It pollutes far less (Don't remember the exact numbers, but I believe we're talking something of half the energy per trip per passenger compared to road traffic);
2) The infrastructure takes up far less space (a two track high speed rail line has a similar capacity as a highway with three lanes in each direction)

In Europe, governments have decided that these advantages weigh up against the high cost of construction and the subsidies (don't forget highways need government money as well). It is regretful to see that in the US the government has neglected Amtrak for decades. You can't expect a company to flourish when it doesn't invest.

Dc10guy has a point though... why is it OK for the government to pay to build highways, but not OK for them to pay for or subsidize mass transit?

This caught my attention and I will comment on it. Pardon me if this has already been addressed. In aviation, the government, (or municipalities or whatever) manages the airports. The airlines are privately run (minus the recent gov. loans post 9-11).

The crucial difference in railroads is that the above is completely reversed. The rail lines are owned for the most part by freight train operators. The government runs Amtrak. As a result, the government must pay the private operators for use of their lines.

Dc10guy missed this little tidbit. If the government took over the rail infrastructure and gave the operators free breathing room, Amtrak could survive. But with the current state of the infrastructure (in terms of supporting a more capable highspeed service which I feel should be made cross country) I doubt that Amtrak would serve nationwide anyway.

Sad to see it go. Amtrak is more worth the money than the many thousands of bullshit pork-barrel projects we see politicians blowing money on.

Here's my idea for a subsidy cut...cut the salaries of politicians and lawmakers. They aren't worth the stuff that comes out of my asshole when I'm on the crapper anyway...

B4e-Forever New Frontiers

Amtrak is one of the biggest wastes of taxpayer dollars

Can you explain that one to me? That’s just your pure political animus right? Never mind the facts. The GAO recently published a study of the 25 programs most susceptible to waste, fraud and abuse, the FAA was on the list, but Amtrak was no where near it. (1), (2) Indeed, Amtrak is improving greatly in its efforts to reform itself and make itself more transparent to outside scrutiny, a fact acknowledge by one on Amtrak’s most persistent critics, Sen. John McCain. (3), (4)

So please let me know how Amtrak is one of the biggest wastes of taxpayer dollars?

and the fact that they have never even turned a profit in thirty four years of operation is absolutely deplorable.

No, not deplorable. On a “fare box” accounting measure, passenger rail has never been profitable. It is not profitable in Europe nor Asia. It was not profitable for the Pennsylvania Railroad as well as all of the rest of the great railroad companies, which used its passenger service primarily as a way of advertising its rail network and freight services.

When you consider all the costs that are actually incurred by other modes of transportation, than rail travel is indeed an extremely cost effective transportation mode.

If airlines are not receiving subsidies every year, neither should our antiquated train system.

I don’t know how you could write something so ridiculous, that even you must know is wrong? Annually, the government spends more money supporting the FAA from the general fund (i.e., money not raised from airport user fees) than it spends on Amtrak—US$ 3.2 billion. (5) Almost half of the FAAs budget is not funded by user fees. It is a similar story for highway and road construction.

And, of course, all of this is on top of the enormous bailout the airlines received in 2004-- US$5 billion in cash and US$10 billion in loan guarantees. (6)


Realistically, there are only a couple of Amtrak routes that should be able to turn profits, most importantly the Boston-Washington route.

No, not really. The Northeast Corridor line makes a slight profit “above the rail”, but cannot cover its capital expenses nor the cost of updating its infrastructure. No private rail company would want it. (7)

Excellent news. Cutting government welfare programs is good thing. If only Bush would do more of it! Or any of it, for that matter. This'll probably be the first subsidy cut of his tenure, period.

Bush not only didn’t cut subsidies during his first 4 years, he greatly added to them. Bush has no interest in cutting the federal deficit. If he did he would have proposed cuts in major spending programs, not minor ones like Amtrak. One doesn’t cut a $500 billion dollar deficit by attacking programs that spends less than US$ 1 billion annually. Bush is just like Reagan, a big government, borrow and spend Republican.

Bush wants to put the final nail in the coffin of a rail service nobody uses.

No one uses?     You just have no idea what you are talking about, do you? There were 22 million journeys on Amtrak last year, about half of which were on the Northeast Corridor. But Amtrak ridership is dwarfed by the number of passengers on commuter railroads serving the urban areas of the Northeast, and which rely on Amtrak’s tracks, dispatchers, maintenance workers to function. For example consider just NJ Transit alone, about 200,000 people use NJ Transit trains on a typical weekday, and made a total of almost 60 million rail trips last year on NJ Transit. (8) Not to mention the numerous commuter passenger railroads along the Northeast Corridor.

But Bush should be careful. While he would no doubt like to stick it to the Northeasterners who voted heavily against and are the most consistent users of passenger rail, he also depends heavily on the Northeast to pay the bills for the social welfare programs that his loyal supporters in the South and West are so dependent on.

(1) http://www.washingtonpost.com/wp-dyn/articles/A36544-2005Jan25.html, read the report for yourself here: (2) http://www.gao.gov/new.items/d05207.pdf

(3) http://mccain.senate.gov/index.cfm?fuseaction=Newscenter.ViewPressRelease&Content_id=584
(4) http://www.bizjournals.com/boston/stories/2003/04/28/daily26.html
(5) http://www.faa.gov/aba/html_budget/files_pdf/2003bib-2a.pdf

(6) http://query.nytimes.com/gst/abstract.html?res=F60C12F83A5C0C708EDDA80894DD404482&incamp=archive:search

(7) http://www.calrailnews.com/0703/0703_p7.pdf

(8) http://www.njtransit.com/pdf/an_factsataGlance_FY03.pdf

"I know this belongs in the aviation forum but how much do you think the market value of all of US and UA's assets are worth? I have no idea but would it would be interesting to know. Of course my remark above was sarcastic and as a DC resident I would never want to shoot myself in the foot by closing down both of our primary airlines."

A whole lot less than they are valued for on the books, it is really difficult to say. Gates and slots are one of those things that are only worth a penny if someone wants them (DFW can't give gates away right now). American may suck up the gates and slots at ORD. Maybe Frontier will buy up some of the DEN gates and maybe the SFO gates will have some value to someone but for the most part look for the gates to sit empty for years if those airlines go bust. It kind of matters if the gates are leased or if they are owned. If they are leased they aren't an asset, they are a liability so the book value is not an issue with respect to the airline's value. The shut down costs of exiting the leases early may be the reason some cities still have service from these airlines. However, if the gates/slots are owned then they are on the books at the price the airline paid for them originally, which may make it appear US and UA have more asset value than they really do. That is the double edged sword of generally accepted accounting practices for you.

Also, the used airplane market right now is almost non-existent People aren't exactly tripping over themselves to buy 20 year old 767-200s or 15 year old 737s, both of which probably still have some value on the books of UA. These are some of the reasons the creditors want to keep those airlines operating, the liquidation sale will come nowhere near paying off the airline's debts.

Look for the same thing to happen with Amtrak. I am sure they have debts but they really don't have anything that anyone would want. What market is there for passenger rail cars? Nobody wants Genesis locomotives because they have no power. The only rail property they really own is the Northeast Corridor. What resale value does a passenger rail station really have?

Spinzels

Excelent reply! Just one question.

You say -


"But Bush should be careful. While he would no doubt like to stick it to the Northeasterners who voted heavily against and are the most consistent users of passenger rail, he also depends heavily on the Northeast to pay the bills for the social welfare programs that his loyal supporters in the South and West are so dependent on."

They are keeping Amtrack funding in the Northeast ($360 million) and cutting it in the rest of the country (mostly red states) so how is this "sticking it to the Northeasterners"... ?

This is a horrible thing for every resident of New York, Philadelphia, Washington, and Boston, and many points between.

There are a lot of people that depend on this service to commute, or to do business. The Shuttles are no longer a viable daily alternative that can replace capacity for every single person that takes the train.

In other countries, trains are frequently part of the government themselves.

N

Rail travel, while fun, is extremely slow for long distances and not suitable to the requirements of most people. I believe also that the people running the rail systems have not properly executed an effective marketing campaign to illustrate the leisure travel draw for trains.

This statement stands out among the rest. I think it speaks at Dubya's level. Let's remember exactly when and why the fall of the train started.

Train transportation didn't just fall out of favour because of new technology. It was a due to a successful scheme from big business, namely the oil companies, who bought up the rail service just to tear it down and make the US more reliant on more gas guzzling modes of transportation. They didn't succeed totally because the law finally caught up with them.

Now fast forward to 2005. The US has never made a serious effort to re-enstate or upgrade the rail system. So now a great deal of freight is delivered by MUCH less efficient means such as air or truck.

I just drove a stretch of highway between Detroit and Chicago. It is completely cluttered with huge trucks transporting goods. Goods that could be transported much more efficiently by rail. The wear and tear on the highways alone could pay to maintain a rail line. But why aren't these goods on a train? Because people like Bush, and the person who wrote the statement above are under the old spell of Standard Oil. They see train travel outdated. Unglamorous even.

So Dubya....thanks for finishing what big oil started years ago but couldn't legally achieve. The further dismantling of the rail system.

Maybe someday the US will step into the 21 century and elect a progressive president....

So Dubya....thanks for finishing what big oil started years ago but couldn't legally achieve. The further dismantling of the rail system.

Actually, aviation killed it. It just took longer than killing off the steamships did.

"just drove a stretch of highway between Detroit and Chicago. It is completely cluttered with huge trucks transporting goods. Goods that could be transported much more efficiently by rail."

The distance is too short. The generally accepted rule for sending something by rail is it must be going over 500mi, otherwise it can be sent faster and cheaper by truck. According to PC Miler Chicago is 277mi from Detroit. Not too many businesses have rail access to their door either, so you would probably have to send whatever by container on the train then have it switched to a truck anyway for the final delivery. Plenty of freight still goes by train in this country, look for those multi-colored boxes of various sizes next time a train goes by, chances are you will see some.

There is even an off chance some of that freight you saw heading from Chicago to Detroit came off a train in Chicago after coming from any place on the globe.

Because people like Bush, and the person who wrote the statement above are under the old spell of Standard Oil.

What is with lefty looseys and their fixation of oil? I'm just not getting it. Just like tv killed radio, internet killed newspapers, aviation is killing trains. People fly, rather than take trains because it's faster than other modes of transportation. I myself have never taken Amtrak and have no plans to do so in the foreseeable future. Unless the train can get me from seattle to chicago within 5 hours, rather than 5 days.

As usual, Airplay is out in left field. It's all Bush's fault that Amtrak is failing.   Oh, and the oil company's fault as well . . . .

Train Travel started spiraling downward in the late 50s/early 60s when airlines started non-stop coast to coast jet travel and one could find a plane ticket from point A to point B just about anywhere.

The railroads never made money on passenger service. Amtrak has never made any money, regardless of who sat in the Whitehouse. Amtrak was designed to fail from the start unless was subsidized. It has never been adequately subsidized, and always mis-managed.

Long distance train travel is a great way to go, if you have the time. In the Northeast Corridor of the US, it's the only way to go - avoiding airlines altogether.



[Edited 2005-02-02 18:20:08]

Do what?!!?

Airplay....how do you take a fact about rail travel and turn it into an insult directed politically.

Railroad travel over long distance takes too long for most business travel. You cannot get to LA from CHicago on a train in less than 24 hours. If you leave at 0600 you can be at a meeting downtown LA by 10am local time. No competition there.

Leisure travel is a more likely avenue for rail travel, but it is at best a seasonal deal with perhaps a charter angle lurking. As stated earlier by a poster many people do not wish to sacrifice two or three days of their vacation on the journey.

So if you say that repeating these facts speaks at President Bush's level, then you are indicating he is a realist...not sure that is what you meant to do.

Many here seem to forget that one of the reasons rail travel in Europe has lasted as long as it has is that the economics were and are different. Distances are significantly shorter than what we consider long distance here in the states. Also the development of domestic passenger air travel as a common and affordable method of transportation here in the states occurred earlier than in Europe, making train travel less desirable here.

Those of you that see this as a conspiracy from the oil companies are spinning this. Passenger rail would have died a natural death here in the states in the 70's, as it was it nearly destroyed several of the major rail systems and definitely took a large part in the consolidation of the 70's and 80's.

Spinzels - welcome to my respected users list.


What is with lefty looseys and their fixation of oil?

What is it with these 'conservative' wackos that want to ruin this country for the benefit of the rich and powerful?

I live in Tallahassee and Amtrak is always late not because their train doesnt runs slow or whatever reason but because they get put into a siding for hours at a time because operators dont let them through.

I am tired of giving corporations gifts and priviledges. If I where congress I would force these operators to HAVE to let Amtrak through. It isnt Amtrak's fault they are behind on schedule and an 'express' frieght needs to get through quickly.

I wish northern states would invoke the 'states rights' proviso conservatives love to use down here in order to stop paying for our shit; or I should say stop letting Florida republicans waste their tax money subsidising companies. Everything nowadays is a gift to this company or to that. I believe in personal freedom, the freedom of a person to do as he wishes but not of a corporation to not pay its share for the government that keeps its business safe.

[Edited 2005-02-02 18:32:50]

Some people just do not understand that Amtrak was formed to be a NATIONAL rail network. It was not formed to be a "Northeast-only ' operation, nor will it ever be. Rail travel has not made a profit in America probably forever. The only reason why train travel is successful in Europe is due to government subsidy.

Once again, the problem is not ridership. Some of yall are saying that "nobody uses the long distance trains". For those of you that have said that, all I ask is this: Have you ever been on one? Maybe, maybe not. Amtrak long haul routes are just another travel option for people. And people take advantage of it, whether you choose to believe it or not.

Amtrak is already cutting the Three Rivers route in March. I'm sure some other route adjustments will take place over the short term, but let David Gunn make those decisions, not some president who has no interest in even trying to fund the lines.

Yet again, if Amtrak was never formed to be successful from day one, why just kill it off now? We won't have high-speed rail corridors outside the Northeast in this country for some time (if ever). We should give Amtrak the funding to get the railroad back to a state of good repair, which it has basically NEVER been in. The government shouldn't turn its back on Amtrak now. The railroad has made a lot of improvements over the past few years. But it's a continually uphill climb for Amtrak, and under a Republican administration (remember Amtrak almost went under under Reagan were it not for the leadership of the Amtrak president Graham Claytor, Jr.), Amtrak seems doomed to a lfe of mediocre funding and, sadly, indifference.

In any case, I still say the Bush plan to kill the railroad will not pass Congress. What Bush needed to do was to create an "Amtralk restructuring plan", not eliminate funding for the long haul routes altogether, which still are an important asset to hundreds of communities over the country which do not have rail (and in many cases bus) service.

It's insulting to me that billions of dollars can be spent on a winless war (because we all know the fighting will never end over there) the world and we can't even support Amtrak properly. Unreal if you ask me.