Wednesday, July 31, 2002

You might have been wondering, during the debate over government subsidies to Amtrak, how the money might otherwise have been spent. Well, here are some relevant figures: Amtrak was granted a $520 million capital subsidy in 2001, plus another $105 in "safety and operations" funding (another $130 million-odd was spent on sundry other passenger rail projects, including "research and development"). The previous year, Amtrak supplied about 5.5 billion passenger miles of rail transportation; total passenger rail subsidies thus amounted to about 13.5 cents per passenger mile.

In 2000 (the most recent year for which figures appear to be available), Greyhound bus lines took in a total of about $1 billion in revenue, while providing nearly 8 billion passenger miles of bus transportation, for a total of about 13 cents per passenger mile (and that's assuming zero profit and zero revenue from non-passenger sources such as its package-shipping service). Meanwhile, Continental Airlines brought in 13.44 cents of revenue per passenger mile; United's figure was 13.25 cents, and American's was 14.05 cents. (Since 2000, airlines' revenues per passenger mile have declined, while Amtrak's subsidy per passenger mile has increased. Greyhound's parent company, Laidlaw, has been granted bankruptcy protection, so Greyhound's recent revenue figures are hard to come by.)

Remember, these are revenue figures--the amount these companies charged for the transportation they provided. (And all were profitable during the year in question.) In other words, the government's 2001 subsidy of passenger rail would have been approximately sufficient to pay for all of Amtrak's passengers the previous year to take a bus or plane instead--absolutely free.

On the other hand, it's not entirely certain that Amtrak's passengers would have taken this deal, even if they could somehow have been identified and offered the switch. After all, Amtrak is hardly the price-sensitive traveler's first choice; its fares on the most popular routes are typically slightly above the best available airfare (as a bit of experimentation with Amtrak's and Expedia's Websites will show), let alone the cost of a bus ticket. More likely, rail passengers are opting for comfort and convenience--particularly compared to Greyhound, whose highly, uh, "price-conscious" clientele may be exactly what Amtrak's passengers are looking to avoid. Viewed in this light, the massive federal subsidy provided to Amtrak's affluent, luxury-seeking customers is, pace the "egalitarian" mass transit ideologues, an appalling example of expensive, wasteful government favoritism towards the well-to-do.

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