Amtrak—-A National Hazard At Any Speed

David Stockman reports:

The average airline fare in the US is about 15 cents per passenger mile and the average bus fare is about 11 cents per mile. Now how in the world does it make sense to operate a lumbering passenger rail system in which the true economic cost of its capital assets alone is 65% to 130% higher than the profitable fares charged by the perfectly adequate and available alternative modes of transportation?

Stated differently, you are deep in the hole before you start even one Acela train on its route between Washington and Boston or one long distance train, for example, on its 1,750 mile route between Chicago and Los Angeles. But in the operations department it goes without saying that Amtrak —– burdened as it is with its endless array of Congressional mandates and directives —– is not exactly a model of efficiency or financial discipline.

Thus, Amtrak’s fully loaded wage and benefits tab is about $2 billion per year and is spread over 20,000 employees. Needless to say, at $100,000 per employee Amtrak’s costs are not even in the same zip code as its far more efficient for-profit competitors in the airline and bus transit industries.

On top of its massively bloated and featherbedded payroll, Amtrak also generates another $1.3 billion of expense for fuel, power, utilities, supplies, repair parts and operational and management overheads. Accordingly, its total operating budget at $3.3 billion amounts to about 40 cents of expense per passenger mile. That is, its operating costs are 3-4X the ticket price of its air and bus competitors!

Rent-seeking gone wild.