Is Low-Cost Intercity Rail Possible?

Update: see corrected Shinkansen staffing numbers below

The last few decades have seen the growth of airlines and bus operators that reduce operating costs using a variety of lean-production ideas, chiefly using the equipment for more hours per day to earn more revenue with the same fixed costs. This hasn’t generally happened for rail, even in the presence of competition between operators. There is one low-cost option, on the TGV network, which like Ryanair and easyJey cuts costs not only by leaner production but also by reducing passenger comfort and convenience. I contend that an intermediate solution should be investigated: lean like Southwest and JetBlue, but without the extra fees, which are lower on those two airlines than on legacy US airlines.

First, the preexisting fares. In Japan, JR Central charges an average of $0.228 per passenger-km on the Shinkansen, JR East charges $0.245, JR West charges $0.208. In Japan nearly all intercity service is Shinkansen; averaging all JR East rail other than Tokyo-area commuter rail, even commuter rail around Sendai and Niigata, drops the average marginally, to $0.217. European intercity rail fares per passenger-km are lower: €0.104 on RENFE (PDF-p. 27), €0.108 on DB, and €0.112 on SNCF. All of those companies are profitable and do not receive subsidies for intercity rail, with the exception of RENFE, which loses small amounts of money (-0.8% profit margin). This is far lower than Northeast Corridor fare, which, as of the most recent monthly report, averages $0.534 per passenger-km on the Acela and $0.292 on the Regional.

Now, we can try penciling what operating costs should be. The most marginal costs, which grow linearly with the addition of new service, look a lot like those of low-cost private bus operators: crew, cleaners, energy, rolling stock acquisition, rolling stock maintenance. I am specifically handwaving the peak factor – frequency is assumed to be constant, to establish the operating cost of the base rather than that of the peak. I am going to assume 1,120 seats per train, all coach, about the same as a 16-car Shinkansen with 2+2 standard-class seating, or 70 per car. First class should be thought of as an equivalent of buying extra seats – fares should scale with the amount of space per passenger, and at any rate most cars are coach. Occupancy rate will be taken to be 57%, for a round 40 passengers per car; this is well within the range of HSR occupancy.

The cost turns out to be quite low – this is similar to the analysis in Reason & Rail from 2 years ago, except for now I’m leaving out infrastructure costs, which in that analysis are the dominant term, and so excluding them leads to very low costs. It is about three cents per passenger-km in operating and maintenance costs. This is of course not what HSR currently costs, but should be thought of as a lower limit or as the marginal cost of increasing base service.

A crew on a high-speed train is a train driver and a conductor. A 16-car Shinkansen train appears to have one conductor judging by the single conductor’s compartment has three conductors (see Andrew in Ezo’s comment below); the TGV has much more staffing, with the low-cost TGV having four. US salaries are high because the railroads have good unions: according to the Manhattan Institute’s applet for public employees’ salaries, on the LIRR, the average train driver makes $103,000 a year (search for “engineer”) and on Metro-North $115,000 (search for “locomotive engineer”). This is higher than on the Shinkansen. A conductor makes $98,000 on the LIRR and $105,000 on Metro-North. Figure $240,000 per year for a two-person crew $440,000 per year for a four-person crew.

We need to convert this to operating hours. On the LIRR and Metro-North, there are about 4,500 revenue car-hours per driver-year, which translates to about 600 revenue train-hours. At an average speed of 200 km/h, HSR would cost $2 $3.67 per train-km, or $0.003125 $0.0057 per passenger-km. But Metro-North and the LIRR are inefficient due to a prominent peak making smooth scheduling difficult; HSR can schedule a simple shift with a roundtrip of about 6-7 hours plus rest time, and if each employee does this 5 days a week minus holidays this is 1,200 revenue hours. This halves the cost. Conversely, going to 4 conductors, with a five-person crew paid a total of $540,000 per year, raises the cost to $0.007 per passenger-km, still low.

Electricity consumption can be calculated from first principles based on acceleration characteristics, or based on real-life HSR consumption levels. For the latter, a UIC paper claims 73 Wh/passenger-km on PDF-p. 17; this appears to be based on an assumption (see PDF-p. 33) of 70% occupancy but a train that is smaller (397 seats for 8 cars) and heavier (425 t vs. 365 t for an 8-car Shinkansen). Correcting for these gives 54 Wh/p-km. When I try to derive this from first principles assuming Northeast Corridor characteristics but with substantial segments upgraded to 360 km/h, I get about 50 Wh/p-km; this doesn’t include losses between catenary and wheel or regenerative braking, which mostly cancel each other out with losses being a little bigger. Rounding up to 56 Wh/p-km and using a transportation-sector electricity cost of $0.125 per kWh, we get $0.007 in electricity cost per passenger-km.

Cleaning should be done as fast as possible, with large crews working to turn trains around in the minimum amount of time based on safety margins and schedule recovery. JR East cleans Shinkansen trains in 12 minutes of Tokyo turnaround time minus 5 minutes for letting passengers disembark; the team size is 1 cleaner per standard-class car and 2-3 per green car, for a total of 22. This does not mean we can pencil in just 7 minutes of cleaning, since this doesn’t take into account the cleaning crew’s time waiting for a train to arrive, or downtime in case trains don’t arrive exactly one turnaround time apart. For a 4 tph operation, 15 minutes are fine, but for a 6 tph one, 10 may not be enough, requiring going up to 20. This is once per train run, so once per 720 km. With a team size of 24, that’s 24 person-hours per 720 train-km, or 32 in the 6 tph version.

Again using Manhattan Institute data, cleaners make $50,000 a year; it’s possible wages will have to go up to attract people who can consistently clean a car on the tight schedules posited, but there’s no base of comparison of companies having both Japanese standards for scheduling and American union scales. Say $30 per hour on the job (including downtime and waiting for a train, but not scheduled breaks). In the 6 tph version, this costs $0.002 per passenger-km.

RENFE’s above-linked executive summary includes a breakdown of employees by category (regular, support, and managerial) and gender on PDF-p. 46, whence we can obtain that for each operations employee there are 0.2 managers and 0.07 support employees. For capital projects, the California HSR estimates add 20% for overhead, management, and design, not including contingency, and the Penn Design estimate adds 18% (PDF-p. 247). This should be taken as the marginal cost of extra managers to oversee extra employees hired to provide additional service. In total, this is roughly $0.019 per passenger-km assuming higher crew staffing, and $0.013 $0.0175 assuming lower staffing.

Rolling stock is more expensive, and should spend as much time earning revenue as feasible based on established maintenance protocols. A large share of the operating costs of high-speed rail comes from the rolling stock: 20% on Madrid-Barcelona according to a RENFE presentation to California HSR whose official source is now a dead link, and, from eyeballing, perhaps 25% according to PDF-p. 8 of a UIC presentation about track access charges. The low-cost TGV doubles train utilization to about a million kilometers a year. This should be routine on Northeast Corridor operations: two round-trips per train, about 14-15 hours per day including turnaround time, 1 million train-km a year. Procurement of new N700s costs about $3 million per car, and Japanese depreciation schedules are over 20 years. Other trains capable of more than 250 km/h cost $4 million per car in China; with mid-life refurbishment of non-trivial cost, they can last up to 40. With 4% interest cost, depreciation and interest are about $280,000 per car-year either way, and if a car travels a million km with 40 people on average, that’s another $0.007 per passenger-km, a substantial sum so far.

Rolling stock maintenance is also relatively expensive. California HSR’s 2012 business plan has a list of costs around the world on PDF-p. 136. JR Central’s rolling stock maintenance is $7.20 per trainset-mile, which with our assumptions translates to $0.007 per passenger-km. European rolling stock maintenance costs are $4.16 per trainset-mile, which appears to be for an 8-car train, so scaling up by a factor of two gives $0.008 per passenger-km. Note that the maintenance of the rolling stock costs as much as the depreciation and interest on its acquisition.

In reality, maintenance depends on both time and distance, so increasing rolling stock utilization leads to lower costs per train-km. Since with those assumptions, the rolling stock costs about as much as the actual operations, this is a major cost cutter, though not a game changer given other costs. Note that the RENFE presentation slide also includes a large array of fixed costs and infrastructure (maintenance, which is very cheap at about $100,000 per route-km per year, and depreciation and interest on construction, which aren’t so cheap) as well as managerial overheads, hence the 20%; the UIC presentation includes some overheads as well. However, those fixed costs are more affordable if they’re spread across more service. A line built to have a 6 tph capacity has the same infrastructure cost at any frequency up to 6 tph.

So far, adding up all the operating and rolling stock costs totals to about $0.03 $0.033 per passenger-km. This means $11 $12 direct operating costs between New York and Washington or New York and Boston. It’s also a quarter what the Europeans charge for HSR tickets, and an eighth of what the Japanese charge. Despite this, the California HSR numbers are similar, so this analysis passes a sanity check. Again referring to the business plan’s PDF-p. 136, the table claims operating costs per trainset-mile that, after scaling from 8- to 16-car trains, are $0.04 per passenger-km. They exclude rolling stock acquisition, but include maintenance; but the assumptions in the Operations and Maintenance Peer Review are worse than in this post, with worse train utilization (turnaround times are assumed to be 40 minutes on PDF-p. 21) and more staff on board each train (an engineer, a conductor, an assistant conductor, a ticket collector, and a special services employee per 8-car unit, for a total of ten employees for 16 cars).

Still, I have no expectation that anyone can charge $11 $12 profitably for HSR service between New York and Washington. However, I strongly believe costs could be brought substantially below current rates. I believe the reason SNCF has only begun to do that and other operators not at all comes from two places.

First, infrastructure charges, a third of the cost of both the TGV and the Madrid-Barcelona AVE, are not just about paying off infrastructure costs (both Spain and France are low-construction cost countries for HSR). They transfer profits from the HSR operator to the monopoly infrastructure owner: track access charges were specifically increased in France ahead of the opening of the European rail market to competition, ensuring HSR surplus would go to state-owned infrastructure owner RFF rather than to foreign companies or the customers.

And second, unlike in the US, in Europe low-cost airlines are associated with terrible service: low seat pitch, hidden fees, rigid policies toward carry-on baggage, rigid policies toward missed flights, worse customer satisfaction, secondary airports located far from the cities they purportedly serve. The US has some of this in Spirit Airlines and Allegiant Airways, but it also has Southwest, JetBlue, and Virgin Atlantic, which have high customer satisfaction, flexible tickets, secondary airports located close to city centers (such as Dallas Love Field), and seat pitch equal to or better than that of the legacy airlines, which have degraded service. Europeans hate low-cost flying; Americans hate flying. The result is that Ryanair tars any attempt to lower costs in Europe by associating lean production and high equipment utilization with no-frills third-class service. This might make managers more wary of adopting some of the more positive aspects of low-cost carriers. Japan has no major low-cost carriers, so although it does not have the stigma, it doesn’t have the domestic experience, either.

I do not believe it’s possible for a train to charge $11 $12 one-way between New York and Washington and stay in business. There needs to be some profit margin, plus paying back infrastructure construction costs. However, I do believe it’s possible to charge closer to that than to present European HSR fares for the same distance (about $45), let alone present Amtrak fares. California HSR is actually pointing the way, but has such high construction costs that paying off even part of construction represents a major rise in ticket fares. The Northeast can and should do better.


  1. Alon Levy

    Two notes to alert readers:

    1. Yes, there are peak factors, which complicate rolling stock utilization calculations. It’s fine – people should talk more openly about how much more expensive the peak is than the base. That said, the NEC specifically benefits from the potential for a low peak factor, since it has a broad range of possible trips served at high average speed, including long-distance commutes, personal day trips, business trips, and longer vacation trips, all of which peak at different times.

    2. More broadly, I’m doing something specific in this post that I talked about in the previous post, that I’m fully self-aware about. So when I’m anchoring people’s fare expectations with talk of $11 fares, or when I’m explaining away the reasons for very high infrastructure charges in Europe and the persistence of 500,000 km a year service lives, I’m subverting what Elon Musk does. Or more precisely I note that the must-reinvent trap is there before stepping on it.

    So yes, ways to reduce fares should be researched and negotiated with unions, and the US is better-placed to do that than Europe, first because its experience of low-cost travel isn’t as horrible, and second because it has such a potential for growth in service that it could drastically cut staffing levels per unit of service provided and expand service to compensate, without laying anyone off or cutting anyone’s wage. This is of course also true of construction costs. But if your reading of this post is that any proposal involving fares too much higher than $11 should be rejected, the way Musk trashes California HSR, you’re misunderstanding what I’m getting at.

  2. Gauephat

    I’m very interested in the OuiGo experiment as a cash-strapped person living in France, and I’m hoping it spreads to service other regions. iDTGV services between Paris-Lyon and Paris-Strasbourg were stopped last September, apparently because of low demand, which isn’t exactly a good signal. I think SNCF wanted to focus on 3+ hour travel times (at least according to this article): is it possible that cheap fares become more profitable on longer trips? It would also certainly lessen the time penalty required for checking in ahead of time with OuiGo.

  3. Tom West

    I was always under the impression Amtrak is capacity-constrained on Acela services, so charges as high as it can while still filling seats. If it wasn’t capacity-constrained (and was therefore maximising profit by playing off price/demand and costs/service levels), then prices would be lower and demand and service levels would be higher.

    • Alon Levy

      Yes, but:

      1. The Regional isn’t so capacity-constrained – current seat occupancy is about 50%.

      2. The Acela is capacity-constrained because the train is only 8 cars long and has only 304 seats. The stations the Acela calls at with the exception of New London all have 12-car platforms or could be easily lengthened to accommodate 12-car or even 16-car trains. The power cars take a quarter of the train’s length, thanks to FRA regulations forbidding passenger occupancy in the lead car at high speed. The cafe takes a sixth of the remaining space.

        • Adirondacker12800

          They can’t make the Regional cheaper without making Acela cheaper. There’s a formula, mandated by Congress, about the fares. I don’t know what it is but it seems to roughly be the top Acela fare can’t be more than 4 times the lowest Regional fare.

          • Alon Levy

            I thought the formula was only within each train class – i.e. the highest Acela business class fare can’t be more than twice (or so) the cheapest Acela business class fare, etc.

          • Adirondacker12800

            The fares are tied to one another or they’d be selling off seats on the low passenger volume trains for less and doing things like having half price sales. The foamers used to day it was 4X but it appears to be a bit more complex than that. There’s a Congressional mandate for lowest fare and highest fare of some sort.

      • Nathanael

        “1. The Regional isn’t so capacity-constrained – current seat occupancy is about 50%.”

        Peaking issues. Check the occupancy from Philadelphia to NY.

        • Adirondacker12800

          You mean the people who want to leave in the late afternoon aren’t going to hang around until midnight to get on a train?

          • Adirondacker12800

            Spend a week or two trying to book the 5 PM Acela at 3:45. They get on the 5:05 Regional, when that isn’t sold out. Or wait for the 6 or the 6:05. To have the train in Penn Station at 4:59 it has to come from somewhere. Which implies it eventually gets somewhere and has to come back. Might as well have paying passengers on it when it does that.

      • Christopher Parker

        Seat occupancy is meaningless.

        If an 8 car train leaves Washington DC 25% and adds more passengers at each stop until it’s full at Philadelphia until New York it will be sold out and also have a 50% seat occupancy.

        However it does suggest that perhaps there is another way to do things. More service, Philadelphia – New York and shorter trains to DC, for example. Or more aggressive yield management pricing (if congress will let them).

        But if it takes an 8 car train to satisfy the peak, it makes sense to keep those cars running for the rest of the day or the rest of the route rather than paying to have them sit idle.

  4. Heinz Roggenkemper

    Not that this is a major point of the article, but what do you base the statement ‘Europeans hate low-cost flying’ on? As far as I know, Ryanair has shown passenger growth of about 15% per year over the last 10 years, and now is one of Europe’s biggest carriers.
    Personally speaking, I appreciate an airline that takes my family of 5 from Karlsruhe-Baden to Malaga and back for 300 Euro (that should be about 4.8 cent/passenger mile).

    • Alon Levy

      Ryanair is the sort of airline that people ride without liking it, and abandon once there are better alternatives like the TGV at the Paris-Marseille range.

      • Rational Plan

        Yes, but the Ryanair model does offer really low fairs compared to other so called low cost airlines. Such a model is no good for hubbing and they do say interconnecting is done at your own risk. But you run the same risk on super discounted rail fares that are only for a particular train.

        HSR will only connect major cities, and is only useful within a certain distance., Super discount airlines have little to worry about..Rynair may run from obscure small airports, but that means it’s planes have punctuality in the 90% range..

        Anyway it does not take away from the fact that US passenger railways seems to be dominated by slow heavy trains, with crewing and customer service practices from the 1960’s. Until there is a serious effort to actually run their services as a business that gets some of it revenue from the state, rather beholden to the desire of politicians and unions, rather than what generates the best return.

  5. Clem

    I think capital overheads and operating overheads are like apples and oranges. While I don’t have specific figures, I can easily imagine 100% overhead burden on operating employee salaries, covering the generous benefits these jobs typically feature as well as management and non-crew operations staff.

    • Alon Levy

      The pay figures from the Manhattan Institute include benefits, I believe. That’s how the average compensation is higher than the hourly average pay.

      The CAHSR Business Plan has 10% overheads and 10% contingency. I’m ignoring station costs since the business plan assumes full access control and other cost raisers.

      That said: yes, $11 for a 360 km trip is way too low. There’s a reason why when I wrote the sanity check post for NEC ridership I did not say “Fares can be much lower than HSR fares” – it’s not that I hadn’t done this calculation by then, it’s that I don’t actually know with any degree of certainty that anyone can average less than $0.10 per km and make a profit. Though, at least as per the business plan’s numbers, the big issue is paying off capital construction, and there, high traffic density could help defray costs as much as anything.

      • Nathanael

        Amtrak has a great deal of overhead and capital costs which are largely the fault of Congress. Apparently, due to a formula designed in the 1970s, Amtrak pays the majority of Railroad Retirement contributions, which are mostly going out to people retired from the predecessors of BNSF, UP, CN, etc. This is a large subsidy from Amtrak to the Class Is. There’s other stuff like that out there.

        Then there’s the fact that Amtrak seems to be given infrastructure just after it’s gotten completely worn out, starting with the original rolling stock, continuing with the Northeast Corridor, and continuing right up to today with the Michigan and Empire line transfers. Because it always gets infrastructure which is on its last legs, Amtrak is effectively paying full capital cost which a startup would pay to build new infrastructure, but is *also* paying elevated maintenance costs on the old junk…

        Anyway. Operating in a capital-starved environment leads to different behaviors from operating in an environment where capital is available. The importance of internally-generated capital becomes very high, so it makes sense to raise prices rather than having cheaper prices. The high prices are primarily an artifact of the capital-starved environment Amtrak has been in.

  6. Charles Smith

    Alon: I agree with the thrust of your article completely, some observations that might strengthen your argument. First, working with the DB and SNCF numbers, you seem to have assumed 1:1 Euro:Dollar equivalency. In the reported time period, the ratio was pretty close to 1 Euro equaling $1.33 or more. Second, the largest effect of unionization on costs is NOT a wage effect, it’s a work rules effect. The Amtrak cost disaster under the Bush Administration was a total cave on work rules. If one were able to negotiate with a full employment promise, one could dramatically reduce costs through changes in work rules, and redesign the underlying system to be even more efficient. Third, at the heart of the high cost of railway labor, is the fact that it is a non-fungible commodity. Instead of operating a closed, modern system with well documented, highly consistent, procedures, and with TRAINING of employees, the American railroads operate a system so laden with exceptions, that some Amtrak employees have to carry more than forty pounds of reference material with them every day just to do their jobs. And, the railroads do not provide training, so either the employee brings the skills and knowledge with him OR learns it on the job. (A training structure similar to the Navy’s would dramatically improve costs, operating performance, and safety.) Fourth, a principal source of the operational inadequacy and high cost of Amtrak is that it suffers from a management that tends to avoid getting on the road and seeing what’s really going on, and often doesn’t know what it should be seeing when it does go out into the real world. If KCS management had spent as little time in the field as Amtrak management does, KCS would have gone belly up, instead of becoming immensely profitable this last decade. Note the history of Hunter Harrison at CN in this regard.

    • Alon Levy

      Just to clarify, I’m not assuming a 1:1 exchange rate. I just didn’t convert the Euro figures into dollars. All the other European figures given are from places that already did the conversion – the Chinese costs (of mostly European trains) are quoted in yuan and I converted them to dollars from there, and the track and equipment maintenance costs are from the CAHSR Business Plan, which quotes dollar costs. My construction costs posts assume €1 = $1.25 for purchasing power parity purposes.

      And I completely agree re work rules. I’ll look at the Hunter Harrison history when I get the chance. My sense of US passenger rail work rules is that they’re not modernized, and that the railroad workers are afraid of changes to the point of striking over them; David Gunn claims the SEPTA strike was about the attempt to integrate the management structure of regional rail into that of urban transit, rather than about wages. The Bush administration didn’t care enough to change it, since it thought it was going to just privatize anyway.

      • Nathanael

        US passenger rail work rules are largely not modernized, but it varies from railroad to railroad.

        LIRR, by all accounts, has the most archaic work rules out there, having only recently eliminated the “fireman”.

        Metro-North and SEPTA’s work rules are pretty old too, being carryovers from Conrail, but are not as archaic as the LIRR.

        New-start commuter rail operations run by new-start contractors (Keolis etc.) have the most modern work rules.

        Amtrak is somewhere in between. It has managed to make minor inroads into work rules.

        One of the biggest problems is union fragmentation. While the TWU can be a pain, at least it’s an *industrial* union, organized along “shop” lines. The railroad unions are largely organized along “craft” lines, meaning that there are a minimum of four unions per train, and they fiercely guard their “craft” categories, creating all manner of trouble.

        • Evans

          How about work rule for Caltrain crew? Is there any work rule which prevent efficient operation like short trun around time and single conductor?

    • Nathanael

      “And, the railroads do not provide training,”
      Amtrak actually does provide training, and to some extent so do all the US railroads.

      “The Amtrak cost disaster under the Bush Administration was a total cave on work rules.”
      What can you do with a Presidential Emergency Board which was instructed by the President to sabotage Amtrak? That’s the result you get. 😛

      • Adirondacker12800

        they run around telling everyone that gubbimint is evil and incompetent, why is it surprising, when they are governing, that they aim for incompetent? Not half bad at evil either.

        • Falstaff

          “they run around telling everyone that gubbimint is evil and incompetent …”

          I think ‘They’ would include the likes of George Washington:
          “Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.”

          • Adirondacker12800

            He didn’t say it was evil. He didn’t say it was incompetent. Both imply some reasoning. Something he said it wasn’t.

          • Falstaff

            The implication from Washington (and Madison) is that government is both necessary *and* dangerous because, like people, government is sometimes evil, is sometimes (often I think) incompetent. Like fire, without careful, strictly limited use it quickly grows out of control, serving itself.

            Unfortunately the current trend is, where ever government (fire) is found, to act not with caution but instead to call always for more, quickly (throw gasoline on it, yee-haw), and mock any who might caution the house will burn.

          • Adirondacker12800

            Republicans saying government is evil and incompetent is just projection.

          • Falstaff

            The idea that only “Republicans” say government can be evil and incompetent is willful ignorance, over written with some kind of intractable dogma, given the counter examples available from not just Washington but through out the writings of the Founders.

          • Adirondacker12800

            The Founding Fathers aren’t saying much of anything nowadays since most of them have been dead for two centuries. Republicans on the other hand spend much of their time hollering about how evil and incompetent gosh darnged gubbermint is and when they are in power do their best to assure that it lives up to their expectations.

          • Falstaff

            Right, ignore the dead guys and what they wrote if it conflicts in any way with a deranged obsession.

            Yep, dem ‘Publicans will get ya. U betta git fo one gits u.

  7. Charles Smith

    Harrison literally forced high-level and mid-level management to go out on the road and learn what was going on. One can argue with other aspects of his program, but that one is still paying off.

  8. Andrew in Ezo

    Alon, good post. Some clarifications re. shinkansen crewing: All Nozomi and Hikari services have three conductors- a chief conductor and two sub-conductors. All-stops Kodama services have three conductors between Tokyo-Nagoya and two conductors between Nagoya-Osaka (where passenger numbers are lower). There are also 2 first-class pursers on Nozomi services, whose duties overlap somewhat with the conductors (likely the customer service aspects, i.e. non-train operation duties). In addition there are 2 food service attendants per train, but these are contract employees.
    As a side note, there are three low-cost carriers operating in Japan- Peach, Jet Star Japan, and Air Asia Japan, though they are relatively new so perhaps applying the label “major” would be premature.

  9. Zmapper

    One more advantage rail has over air travel – standees allow the capacity numbers to be inflated somewhat. Aircraft require everyone to be seated during the relatively abrupt takeoff and landing phases of flight, while rail don’t have a comparable moment. While Southwest, JetBlue or Spirit have to use pricing to direct customers away from the afternoon flights and towards the morning and evening flights, with the end result that every flight is “full”, rail operations can run the afternoon trips at “over-full” and the morning and evening trips at “empty”, and still bring in the same amount of fare revenue. (Full, over-full, and empty are relative terms in this context, thus the scare quotes)

    • Charles Smith

      There are some issues in the assumptions underlying Zmapper’s proposal to plan to operate passenger service “over full.”

      1. Planning any system, one eventually reaches a situation where one is beyond the planned performance envelope. There is a tendency in planning rail systems to plan for the median or 1 standard deviation and not to plan far out on the tail say 5 standard deviations. Events far out on the tail are not always that far out; Once in a hundred year storms and flooding seem to occur every 5 – 10 years, and once in a thousand year events seem to be taking place every 20-30 years, so planning far out on the tail is not as conservative as it seems. Because rail systems are closed and relatively inflexible, one should if at all possible plan for GROWTH and something like 5 or 7 sigma. If one believed the model and planned for the 7 sigma hour, that would mean that once in a hundred years you’d have absorbed all capacity – an appropriate model for the fixed plant which has a truly hard upper bound; one probably would want to size the rolling stock with less allowance for extremes, because it is not impossible to buy or borrow more rolling stock.

      2. Zmapper’s proposal implicitly assumes that carriage is in itself satisfying to the customer and that the condition in which the passenger is carried doesn’t matter. This argument is also made quite explicitly by Siemens which proudly announces that Velaro and its other rolling stock designs have greater peak capacity because they can carry more standing customers than their competitors

      a. Under extreme conditions, we agree.

      i. Given no alternative, it is better to see that every potential passenger be carried than not; this was the policy of the Pennsy in WW2 and significantly benefited customer satisfaction and the war effort; The New York Central’s policy was if we can’t seat you in splendor, we won’t seat you at all. As a result, the NYC developed a reputation for comfort and style that attracted customers after the war while the Pennsy’s reputation was less attractive. (Potential passengers knew the Pennsy would carry them, but given a choice, they preferred to take the Central.)

      ii. The Pullman Company in WW2 was faced with Gen’l George Marshall’s edict that soldiers traveling overnight should be in a berth if at all possible. To provide berths for troop service, box cars were refitted with stoves and berths and toilet facilities. Pullman provided sleeper service on troop trains in these cars, BUT MAINTAINED operation to Pullman standards within the physical limits of the cars. As a result, Pullman emerged from the war with a better reputation than before.

      b. Passengers, particularly inter-city rail passengers don’t want to stand in the aisle for hours. Three specific observations appear to provide a basis for induction here.

      i. The guarantee of a seat when the customer thought it was needed, (even if on an L-749 Super Connie rather than the B-727 you’d expected), made the Eastern Shuttle an immediate and continuing success premium fare service in the NEC markets. (The convenience and assurance of at least minimal comfort were so attractive to potential customers that it even overwhelmed safety concerns. When Eastern flew a Connie into a hillside in Brewster, it didn’t even dent sales the following day.)

      ii. Metra is finding that, for its Chicago regional rail customers, assurance of a seat matters enough to make the agency invest in a dramatic program to offer a seat at least 99% of the time in peak hour.

      iii. The SNCF has found that demand management by varying fares is far preferable to parking TGV customers in the aisles; as a result they are aggressive demand managers. They also significantly increase available seats during peak demand hours where possible, doubling and sometimes quadrupling capacity even on “clockface-scheduled” routes.

      • Alon Levy

        I don’t know how people plan for capacity, but for safety, they really do look at extreme events. The ETCS braking curve is based on a one-in-a-billion standard relative to wet track.

        Re passenger preference for getting a seat, what the Shinkansen and ICE do is sell a mixture of reserved and non-reserved tickets. A reserved ticket guarantees you a seat. A non-reserved ticket does not, and by buying one you take the risk of not having a seat. The problem is that sometimes the train is top heavy with all the extra passengers and their luggage. The Shinkansen doesn’t care – the trains are so light that extra passengers don’t matter too much. The ICE does, and the ICE-T trains have continuous weight checks to make sure that the train isn’t too heavy, and if it is, it stops tilting. On the Shinkansen and ICE predictable fares are more important than on the TGV.

        • Max Wyss

          I am a little bit out of touch, but for ICE, it used to be that the ticket and the reservation were actually two items. In fact, it was/is possible to buy the regular ticket, and get a reservation separately (there is also the case of rail passes, where only the reservation is needed). The advantage of the non-reservation seats is that you will be more flexible; this can be a great advantage if you are on business, and don’t know when you will be finished at the destination; with non-reserved systems, you just take the next available train, with the reservation (and even worse, with the lump-sum fares), you are screwed, and it depends on the terms and condition whether you will get home or not (yes, that’s exagerrated).

          • Andre Lot

            You can still do that with most ICE trips. However, the price difference of buying advanced (even if by just 4-5 days) is large. By large I mean around 30% less if you buy in advance.

    • Andre Lot

      Many high-speed train operators do not allow standees. Examples in Europe: RENFE, SNCF, Trenitalia, ItaloTreno, Thalys. Eurostar. Actually, among the major operators, only DB allows standees on its ICE services.

      • Richard Mlynarik

        The question is whether intercity rail (including sub-sections of which are “high speed”) is a regarded as a Flight Level Zero Airline surrogate — with some and increasingly all all the ticketing, reservation, inflexibility, terminal waiting delays, mode segregation, “security”, etc, of that model — or whether it is regarded as a portion of a more integrated rail and non-rail transportation network.

        Personally I’m always happier to arrive an hour or a day sooner after a bit of standing than to reticket (at extra, and increasingly extortionate cost) and/or wait. But that’s a customer perspective: airline-wannabe rail operators (and recall that Germany briefly and disastrously flirted with that model some years ago) have a different perspective on yield management, ticket validity, reticketing, seat occupancy, revenue per seat (whether they seat be filled or empty), service integration, etc.

        • Andre Lot

          Among those companies I mentioned, only Eurostar have advanced arrival rules (Renfe has security screening, but it is just an x-ray of whole packages).

          Standing passengers are problematic on trains that, like the ETR500, the AGV or else, have narrow corridors without vestibules. It only takes a handful of person standing in a corridor to make travel uncomfortable for both seats and standing passengers.

          As for the whole yield management debate, it is a matter of increasing revenue while not making your ridership lower than it needs to be, exploring different price elasticity of different travelers’ groups. For instance, DB couldn’t possible sustain its ICE network offering travel-for-€39-anywhere tickets all the time for all travelers (39 Euro for trips like Manheim-Berlin or Hamburg-München are pretty good deals). These tickets are good value for groups like budget tourists, college students travelling to/from schools, people who travel for someone’s house (parents/partner) at weekends etc., who otherwise would not travel as much on ICEs. Of course, it also charges as much as 4 times for last-minute walk-in travel, which is the domain of people who must travel then (there will always be the red herring of the poor-student-with-family-emergency-who-needs-to-spend-her-weekly-grant-to-travel).

          I have some quite large experience on high-speed trail travelling in Europe. I don’t like the idea of allowing standing passengers on high-speed trains. It is harder to move your luggage on corridors on a train with people on corridors, there are heightened concerns for luggage theft, you need to stand up much earlier from your seat if you are alighting at some station that is not the end-point.

          As for commuter trains (properly set up and configured as such) riding high-speed tracks, there is no reason for them to be treated differently, except in some cases where tunnel safety demands certain limitation on maximum number of people on a train.

    • Alon Levy

      I don’t think I know enough about the Brazilian situation to comment. It seems that they’re trying to have someone else pay to build it but so far can’t find investors.

      • Joao T. Costa

        Thanks. I only raised the issue because in a previous posting you discussed Siemens’ business practices in the Brazilian context. It is very difficult to find any unbiased analysis on the figures used by the govt to affirm that the project is viable.

        • Andrew in Ezo

          It seems every time the deadline arrives for bids, the Brazilian government extends it. Hasn’t this occurred at least twice? Not very confidence-inspiring.

          • Joao T. Costa

            Yes, the deadlines have been extended many times already. As to the Siemens reference, my apologies to Alon, that was from another blog.

  10. Max Wyss

    One reason why the staffing in the TGV is rather high is because they may operate in a pair. If I remember correctly, there are 2 conductors and one person staffing the bar per unit, plus the driver. So, it’s 4 for a single unit train, and 7 for a double unit.

    Concerning the number of conductors needed, I believe to remember that the SBB used to assign a conductor/trainman per 4 cars for express trains (but that was at the era with extensive ticket checking).

    • Joey

      Wasn’t there a plan to replace the two center power units with powered passenger cars on some of the double length trains? Would allowing passage between the two halves change the staffing situation at all?

      • Max Wyss

        I have not read/heard about such a project, but that does not mean anything… Although it could increase the number of available seats, it might be rather unpractical, because the maintenance facilities and workshops are (if I remember correctly) set up for the 200 m length of a single unit. There are also operational advantages of two units; splitting and joining is very easy and can be done in regular operation.

        • Joey

          The project is called “TGV Duplex à grande capacité.” I have admittedly been able to find few concrete references to it (though not reading French doesn’t help), and I don’t think it ever got beyond the planning stage. I don’t know how the question of trainset maintenance was proposed to be dealt with.

          • Alon Levy

            The capacity increases in OuiGo come from having no first class and no cafe. The capacity figures per second-class car pencil out correctly to the number of seats advertised for the service. If I’m not mistaken, Alstom has a project for standard-bogie EMUs that would have 1,200 seats in single-deck configuration, but that’s very different from removing two power cars and replacing them with seats, and presumably finding a way to double the power of the remaining power cars.

          • Joey

            They would have added four powered bogies – two at the ends of the passenger cars and two in the middle where the power cars used to be. Though I suppose you’re still limited by the throughput of the transformers etc

          • Max Wyss

            Thanks, Joey, for the keywords. I actually did find some references, and in this document there is at the very end a section about the TGV Duplex à grande capacité. A graphic shows what is intended. Essentially, they would remove the two “middle” power cars, instead add one additional carbody per half-train, and replace all the non-shared bogies with motorized ones. This would keep the number of motorized bogies unchanged. This would increase the passenger capacity by about 10%, keeping the train length the same.

            The concept of powered bogies under the “end” cars is not new, as the first generation TGVs had this configuration, and since then, there was considerable progress; they essentially could use the AGV bogie. For the traction equipment, there should be enough space to distribute it in the two former end cars in the middle, and the alimentation is no problem, as the high-voltage line feeding “the other ” power car is already in place.

            The project must have been up about 10 years ago, as there was a mention that these units would become operational some time in 2005/2006.

            About the maintenance issue, I was wrong; the maintenance sites are set to handle 400 m long trains, as well as the platforms (another idea to increase capacity was to add one car per train, but that would have led to lengthening platforms at the stations, lengthening sidings, and expanding the maintenance site). For the workshops, the train still could be separated in the middle.

            So, it would have been feasible, but it has never been implemented. Instead they chose to upgrade the signalling system to increase the line capacity (from 15 to 18 trains per hour and direction).

  11. Falstaff

    “All of those companies are profitable and do not receive subsidies for intercity rail, ”

    How does one go about verifying that none of those companies receive government support for intercity rail? Certainly Japan has had a prominent history of government support for industry, aka gyōsei shidō, aka Japan, Inc. Profitability on the balance sheet is relatively easy to check, but subsidies can be granted in any number of hard to see methods: regulations on competition (e.g. restrictions on airlines), support for right of way, loan guarantees if not loans, tax relief

  12. johndmuller

    I’d like to think about this from a somewhat different point of view. That is, what approach is suitable for encouraging the restoration of “decent” levels of service and “reasonable” fares in some of the once well-traveled rail corridors. The NEC is becomming quite well developed, but take, for example, the routes from Boston/New York and Philly/DC through central NY and PA into the midwest and on out to Chicago and St. Louis. There is plenty of residual infrastructure and at least some level of passenger service all along these routes, but there is generally insufficient frequency and variety of destinations and the fares are not very compelling.

    While there is fairly frequent service between NYC and Albany and between Philly and Harrisburg, there is hardly anything happening west of Harrisburg and there are only 2 Empire service trips west of Albany per day (plus two through trains).

    I live in the lower Hudson valley, just a bit north of NYC, in Metro North territory. There are occasions where I would consider taking the train to other parts of the state, namely Syracuse, Rochester and Jamestown. Jamestown is currently not really an option, as there is no passenger service that I know of, although there are several rail lines, so it could happen. To Syracuse, the Amtrak fares from Yonkers (nearest Amtrak Sta.) could be $61, $82 or $98; to Rochester the fare could be $62, $87 or $104. (The fare structure is pretty wierd, as Buffalo starts at $62 also.) The low figures – presumably what you could get given enough lead time – of about $125 for a round trip, is a bit less than the lowest airfare I saw in a quick look on the internet ($153 RT from JFK). Driving would also cost about the same, the $125 would leave $95 for gas after tolls, which should be plenty for the Syracuse trip; Rochester would be tighter on the gas and the tolls would also be more. Of course, this leaves out wear and tear on the vehicle.

    The plane is a non-starter for me, despite being the quickest, as it would require going to JFK for the cheapest or else Newark or Laguardia for the others, each of which is a PIA (seemingly no flights beteen Westchester and Syracuse), and there is security to deal with at the airport and parking, limo or imposition cost to get there. The costs of driving and taking Amtrak are roughly the same. There are a couple of issues – for the train, the need to get to and from the train stations (Syracuse station is not convenient to much) and not having a car at the other end – and for the car, dealing with the driving and especially in the cold half of the year, the propensity for (serious) snow in those destinations.

    The real kicker, and the main reason for this comment, is that I would probably not be taking this trip alone. The economics change completely with 2 or more people. Those are the numbers that the train should try to compete with.

    Wheras the current economic choices would allow a person travelling alone to choose the train if they were already so inclined, your post holds out hope that the point of indifference could be moved so far as to include the two person trip or even further. The question is how to do it in this current environment.

    Amtrak might be able to cut fares to this level, if ridership were to spike dramatically, but it seems unlikely. Perhaps it could go halfway,. with a smaller general fare cut, coupled with special discounts for parties of 2 or more. Airlines have used promotions along these lines to woo business travellers and their spouses.

    One could imagine a new railroad company, call it say, the Mohawk and Hudson (MoHud), free of debt, legacy pension issues and archaic work rules, able to offer those kind of fares, if your post’s analysis is on track, but how do you set that up? CSX, Amtrak and Metro North would all perceive something to lose; their unions would likely all be less than happy. Would it NYS funded, a third railroad under the MTA; could it be privately funded, totally non-governmental; could it be a subsidiary of the GOP?

    Perhaps the state could contract with Amtrak or Metro North to operate a low-frills local service along the entire Empire Corridor. Towns with the desire and the wherewithall to provide a servicable station (perhaps on a parallel siding so as to clear the main track and provide overtake points) could get service. While the Empire service tries to go high speed, the Empire Lite provides connections to all the small towns and fills in some schedule gaps. It would also add political support as it would no longer be perceived as only a toy for Wall St. and Albany bigwigs, but also of some to the average village upstate. The more communities connected, the more support and also the more riders.

  13. marees

    I have an alternate use-case in mind for high-speed rail…

    How about using High-speed rail acting as a feeder service for airports. Building a new airport or upgrading a small airport is costly business and High speed shuttle trains can be used to connect smaller cities to major airports in nearby cities or connect city centre to greenfield airports outside cities (Kuala Lumpur) or connect two airports in the same city. Basically a high-speed airport shuttle/mono-rail.

    That is what I am suggesting is that instead of going for volume, go for price of captive customers, that is air passengers who are anyways paying high amount for flights and wouldn’t mind paying extra for shuttle which would anyways work cheaper than taking a cab. Does it make sense? Is it viable?

    • Alon Levy

      Short answer: no.

      Medium-length answer: express airport links don’t do well. There aren’t enough business travelers who’re willing to pay premium for them, especially when they go to anywhere except the CBD. This forces intercity rail to go for volume and not for premium fares, and everything else follows.

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  15. Herbert

    So could a privately financed railway on the Bogota-Medellin corridor where in 2018 almost four million people flew stay financially afloat given all this? The cheapest flights (without hand or checked luggage) cost roughly 50 000 Colombian pesos (13€)

    • Alon Levy

      I don’t know. Rail has a problem in that construction costs do not depend on local incomes but people’s ability to afford fares does, which is why as I understand it most of CRH loses money while first-world HSR is profitable everywhere.

      I’m also worried about the tunneling costs across all these mountains…

      • Herbert

        Well the LCC fare gives an indication on the absolute minimum one could charge. At that price it wouldn’t be profitable but it would capture the entire travel market… The trick is finding out how high the real world price can get… One thing that’d be nice to know are the real world costs of the airlines…

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