By Noel T. Braymer
Could California make money running passenger trains in the near future?
The LOSSAN Joint Powers Authority recently came out with a draft for its Business Plan for Fiscal Years 2017-18 and 2018-19. In this proposed Business Plan is a lot of information about recent ridership and revenue growth for the Pacific Surfliner trains which LOSSAN oversees. Most telling is the improvement in the Farebox Cost recovery. By law the Pacific Surfliner must earn at least 55% of its costs from the farebox. For fiscal year 2012-13 the Surfliner’s farebox recovery was 61.7%, for 2013-14 67.1%, for 2014-15 70.5% and for the last fiscal year 2015-16 it was 78.8%. Now when comparing farebox recovery over the years for the Surfliners, the problem is what Amtrak charges the State has changed and increased many times since the 1970’s when California first supported rail passenger service between Los Angeles and San Diego. As pointed out in the Business Plan draft “The farebox recovery ratio was near or over 100 percent for these six consecutive years, and ridership peaked at 1.8 million in FY 1992-93.”
A major increase in costs Amtrak could charge to the State for running the Pacific Surfliners came after 2008 with the passage of the “Passenger Rail Investment and Improvement Act”. This is also from the Business Plan.”Pacific Surfliner Funding The annual operating subsidy for Pacific Surfliner service was on an upward trend in part due to the increased costs absorbed by the state under the provisions of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA) Section 209. When PRIIA Section 209 was adopted by the federal government in 2008, it eliminated Amtrak’s 30 percent financial contribution toward Pacific Surfliner operating costs and established additional capital equipment charges for the use of Amtrak-owned equipment that the state had not previously funded.”
“As a result, the state’s operating subsidy increased from $29.423 million in FY 2012-13 to $36.819 million in FY 2013-14, which was the first full year under PRIIA Section 209. In subsequent years, the state operating subsidy was budgeted at $44.287 million for FY 2014-15, and was projected to be $46.581 million for FY 2015-16.” So it is a major accomplishment on the part both of the LOSSAN JPA and local Amtrak management to see this major improvement in cost recovery. Just as important higher farebox recoveries are saving the State a lot of money. This is also from the Draft of the LOSSAN Business Plan. ” A reconciliation of FY 2014-15 shows the state subsidy being $28.583 million, while preliminary data for FY 2015-16 shows the actual state operating subsidy at $21.431 million.” So for FY 2015-16 the State paid less to subsidize the Surfliners than it did before increased charges from the PRIIA law went into effect when it paid $29.423 million in FY 2012-13.
What are the factors for this increase in passenger revenues? Well if we look at FY 2015-16 more service was added. This was done without using new equipment or major additional overhead costs. Much of this was done running trains longer in the evenings and early morning which many people assume wouldn’t get much ridership. What was done was a new evening train was run with equipment that had been recently cleaned and serviced from the yard to Los Angeles Union Station and run down to San Diego. This not only added a new southbound train from Los Angeles to San Diego, but positioned this new train for an early morning departure out of San Diego.This resulted in adding a 12th roundtrip between San Diego on the Surfliner service. This new morning train arrives earlier in the morning for people with business at the start or the business day in Los Angeles. But this train is also now part of what had been an early morning departure from Los Angeles to San Luis Obispo. This first northbound train from LAUS had struggled for years in large part because it didn’t have good connections south of Los Angeles. This change to the morning train to San Luis Obispo created a second round trip between between San Diego and San Luis Obispo. So was this schedule change a success? The fact that the cost recovery for FY 2015-2016 jumped over 8% from the fiscal year before suggest that it did.
The key to this success was that a new service attracted more riders and it was done with existing resources. The result of this in the Draft of the next LOSSAN Business Plan was the cost per passenger on the Pacific Surfliners went down. The staff of the LOSSAN JPA and Amtrak managers at Los Angeles have been working together to increase ridership and revenues while controlling cost for the Surfliners. Amtrak to their credit has been working harder to carry and attract additional riders during holiday periods such as the Thanksgiving Weekend and Christmas. There are also efforts between LOSSAN and Amtrak to gain ridership for local special events. This from the Draft of the new Business Plan “Service expansion opportunities include not only regularly scheduled trains, but also special event trains. The LOSSAN Agency and Amtrak have partnered to provide additional capacity to trains serving major events, including the Del Mar Races, Oxnard Strawberry Festival, San Diego Comic-Con, and San Diego Chargers games. The LOSSAN Agency plans to build on the success of that special event service and look for opportunities to promote the Pacific Surfliner as the travel mode of choice to major events.”
Along these same lines, LOSSAN and Amtrak are working to improve the service and food on the Cafe Cars. This has resulted in increased sales and reductions of operating costs. Improvements with Business Class has also increased revenues. These have included ” LOSSAN Agency staff worked with Amtrak in late 2016 to initiate a pilot program to expand business class capacity in direct response to passenger demand. This was achieved by utilizing the Superliner long-distance car as a second business class car for the months of November and December. Based on the success of the pilot, a modified expanded business class pilot was continued utilizing half of the Superliner car, creating increased capacity of approximately 30 seats and allowing for the full use of the Superliner for business class service when passenger demand warrants.”
Not discussed in the Draft LOSSAN Business Plan is the need for more and newer equipment. Much of the equipment is incompatible with each other. The Surfliner service uses one trainset of mixed low level Horizon and Amfleet cars. The Amfleet cars are around 40 years old now and the Horizon Fleet isn’t much newer. Mixed in with the Surfliner cars are several Superliner long distance cars since there is a shortage of Surfliner equipment. The problems with this is the Surfliner cars have train line doors which mean they are powered to open at all cars at stops. But the Superliner, Horizon and Amfleet cars doors have to be opened manually. This results in slower loading and unloading of passengers at station stops. This forces longer dwell times at stations and can lead to trains running late. There are plans to lease 2 sets of Talgo Trainsets to handle growing ridership. These trains have powered train lined doors and will likely be used to replace the aging Horizon/Amfleet equipment. But the Talgo trains are low level equipment and can’t be added to other Surfliner trains.
Leasing new and additional equipment would lower operating costs for the Surfliner. It would also allow more reliable and faster train service with fewer problems for the passengers. One problem is funding new equipment. But a bigger problem is finding a car builder that can build new passenger train equipment in this country and have them delivered on time. With more and newer equipment the Surfliners would be able to carry more passengers and more revenues. Newer equipment would be more reliable and be used on trains with shorter running times. Shaving 2 minutes at each stop with 7 stops between Los Angeles and San Diego is 14 minutes cut from the schedule. Now most Surfliners are scheduled to stop for 4 or more minutes. Faster and more reliable train service would attract more riders. More time can be cut from Surfliner trains run as express trains. To serve the stations skipped by Surfliner trains, sweep trains could be used run by Metrolink and Coaster trains. Outbound, the sweep trains would leave ahead making all stops picking up passengers for the Surfliners. At a point where the Surfliner catches up with the sweep train, passenger on the sweep train would transfer to the Surfliner train for a faster trip to their destination. With the inbound service the sweep train can standby at a transfer station. Passengers would transfer from the Surfliner to the sweep train which will follow the Surfliner while making local stops.
With improved service from more trains and faster more reliable service, ridership can be expected to grow along with revenues for the Surfliner or any passenger train. With newer equipment comes lower maintenance costs. With ridership growth and good service California should be able to expect rail passenger service which cost little to operate or even make an operating profit. Tax dollars would still be needed to pay for overhead costs such as track maintenance. But this would be a good deal for the taxpayers who are also the general public riding the trains.