Sunday, May 31, 2015

ANS -- If Amtrak Were an Airline

Here is a fun article (referred to me by Brad Hicks) about what Amtrak would be like if it was run like the airlines.  It's short. 
Find it here:   http://www.newyorker.com/business/currency/in-defense-of-amtrak 
--Kim






MAY 18, 2015

If Amtrak Were an Airline


BY TIM WU

What would it look like if Amtrak were run by the standards of What would it look like if Amtrak were run by the standards of its competitors in the airline industry?CREDITPHOTOGRAPH BY MARIO TAMA/GETTY

This past week, ever since an Amtrak train derailed near Philadelphia, there have been numerous calls by congressmen and pundits to re-privatize rail in the United States, or at least to try to run Amtrak for profit. (Incidentally, since that crash, which killed eight people, an estimated five hundred and forty Americans have died in car accidents.) So just what would it look like if Amtrak were run by the standards of its competitors in the airline industry?

It turns out that the critics are right. By the standards of today's airline industry, Amtrak is a hot mess of excessively consumer-friendly practices, and is forgoing millions, and maybe billions, in fees and fines that the airlines collect.
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Begin with the seats. Amtrak, without charging extra, provides its customers with economy-class seats that are much wider (twenty-three inches) than those in airplanes ( between seventeen and eighteen inches), and, indeed, larger even than many business-class airline seats. The train seats are sufficiently roomy that there is little reason to pay to upgrade­a grave error by airline standards. Amtrak has also stubbornly stuck to a four-across pattern, not minding how much people will pay to escape the dreaded middle seat. A profit-maximizing, re├źngineered train could squeeze five or perhaps six seats into the same space, making basic economy miserable enough that more people might pay to escape it.

Amtrak also forgoes millions in revenue with its generous luggage practices. It allows people to simply board trains carrying about as much luggage as they'd like, and to keep that luggage in capacious storage spaces. There are no real baggage fees, though it does cost ten dollars to check in a bicycle (airlines charge up to a hundred and fifty). Amtrak doesn't seem to get fees­hell, Amtrak doesn't even charge for Wi-Fi.

By airline standards, Amtrak is also excessively lenient in its ticketing practices. Airlines made a record $6.5 billion last year by charging people to check luggage and by imposing fines on passengers who changed their travel plans (that sum, by the way, dwarfs Amtrak's federal subsidy). In contrast, Amtrak allows customers to change their tickets, whenever they'd like, for free. Similarly, Amtrak fails to impose punitive fines on last-minute travellers. You can, for example, show up at the train station in Washington or Boston ten minutes before departure, buy a normal-priced ticket, and board at your leisure. (Priority boarding is more or less meaningless on a train, forgoing even more money.) Airline logic would see the last-minute buyer as an ideal target for extracting a punishing fare increase.

In short, if Amtrak were run like an airline, we would see smaller seats, punitive booking practices, baggage schemes, and, quite possibly, higher prices. Given the dependence some people have on Amtrak to commute, the company is probably failing to extract its monopoly profits. On the other hand, not everyone would lose out. Amtrak's C.E.O., with his three-hundred-and-fifty-thousand-dollar salary, is grossly underpaid by the standards of the airline industry. Compare that to the American Airlines C.E.O., who, thanks to a successful merger, took home twenty-one million dollars in 2013.

I don't deny that are many ways Amtrak could be better: punctuality is a problem, and I'd like stronger coffee in the caf├ę car. It would be great to see an Amtrak competitor try and make a go of it. But, at bottom, there are advantages for consumers when Amtrak does not try to maximize its profits. Sometimes, the profit motive can inspire great improvements and innovations. Other times, it serves merely as an incentive to take more money from consumers for services we depend upon, acting as a kind of tax that is extracted in particularly painful ways. It is true that riding Amtrak sometimes feels like being caught in a time warp. Yet conservatives, of all people, should understand that there were a few good things about the old days, especially when it came to how people were treated. Amtrak may not be perfect, but compared with the airlines it is, at least, humane.

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Thursday, May 28, 2015

big changes

this is from my new email address. please let me know if you received this.
--Kim