The Sunset Limited: Extend or Cancel?

The Antiplanner recently had the privilege of meeting Amtrak’s new president, Wick Moorman. He is a charming guy who has impressive managerial skills that allowed him to rise to be CEO of Norfolk Southern, one of America’s largest railroads. Those are probably the talents that Amtrak needs right now.

Since we both love trains, we have a lot in common so we agreed to simply ignore our disagreements on the future of passenger trains. I did tell him that, if he were an efficient manager, he would kill Amtrak’s worst-performing train, the Los Angeles-New Orleans Sunset Limited, but I knew he couldn’t do it for political reasons. So I was chagrinned to read that, not only is he not proposing to cut it, he wants to extend it to Orlando, Florida.

The Sunset Limited was originally a Southern Pacific train and starting in 1894 it went all the way from San Francisco to New Orleans. Passengers could take a steamship from New Orleans to New York and arrive just about as quickly as taking a train. In 1930 the train was cut to Los Angeles-New Orleans, and San Francisco passengers would have to change trains in L.A., which probably wasn’t a huge inconvenience.

When Amtrak took over in 1971, it kept running the train, and in 1993 it extended it from New Orleans to Miami. That proved to be a little bit of a stretch as there wasn’t time to service the train in Miami so it was changed to be a Los Angeles-Orlando train, which from a Disney viewpoint was probably poetic.

Hurricane Katrina damaged the tracks the train used in 2005, so it “temporarily” returned to a Los Angeles-New Orleans train. The work needed to restore service is still incomplete, so all Moorman was doing was reaffirming Amtrak’s intention to run the train when and if that work is done.

My first thought was that this would be a big loser, so I looked at the data in Amtrak’s 2004 and 2006 performance reports–in other words, the last full year before and first full year after Katrina. (The monthly reports for September provide the year-end results for Amtrak’s fiscal year.)

In 2004, when the train went all the way to Orlando, it carried 96,426 passengers, earned $12.0 million in revenues, and cost $39.1 million for a net loss of $27.2 million. That’s pretty horrendous. But in 2006, when the train only went as far as New Orleans, it carried just 51,660 passengers, earned $6.5 million, and cost $33.7 million for a net loss of $27.2 million–exactly the same as before. This suggests that the New Orleans-Orlando portion of the trip earned enough revenues to cover its costs. (These costs don’t include depreciation, but that would be small since the only assets used are rail cars and locomotives that would just sit around if they weren’t being used.)

There are several reasons why these numbers may be flawed. For one thing, Amtrak changed its method of reporting losses between 2004 and 2006, and it’s hard to tell if this represents an actual change in how the numbers are calculated or if it is just cosmetic. More important, in 2006 New Orleans was still putting itself back together after the hurricane, so tourism was down. By 2011, ridership had exceeded the 2004 level even though the train still only went as far as New Orleans. Despite the additional ridership, the train’s losses had grown to $31.4 million, but it might have grown even more if the Orlando extension was still operating.

The Sunset Limited today has the lowest ridership of any long-distance train: about 100,000 riders a year, while most of Amtrak’s long-distance trains carry more than 300,000 riders and a few carry more than 400,000. In 2011, the Seattle-Chicago Empire Builder carried more than 550,000. The Sunset‘s low ridership is responsible for its heavy losses: where most long-distance trains require a subsidy of $100 to $150 per rider, the Sunset Limited‘s 2016 subsidy was nearly $350 per rider (even more after including depreciation).

Low ridership is partly due to the fact that this train is one of just two Amtrak trains that operates only three times a week. Increasing to seven days a week would at least double ridership, and since some of the costs are fixed, those costs would be less per rider. Amtrak would probably like to go daily, but lacks the necessary passenger cars to do so.

Most people think that Amtrak’s Northeast Corridor makes money while the rest of its trains are subsidized. There’s a persistent myth in the railfan community, however, that the long-distance trains really make money but Amtrak shifts some of the Northeast Corridor costs to them to make the corridor appear profitable. The reality is that they all lose money. However, it is remotely possible that Amtrak could actually reduce the Sunset Limited‘s losses, or at least not significantly increase them, by extending it to Orlando, and certainly Amtrak could do worse than make this extension.

On the other hand, one of the reasons why ridership on the Empire Builder, California Zephyr, and Coast Starlight is so much higher than the Sunset is that the former trains pass through beautiful scenery, while the views from the Sunset are pretty bleak. Perhaps what Moorman should do is simply run a daily train from New Orleans to Orlando and cancel the Los Angeles-New Orleans portion of the train.

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6 thoughts on “The Sunset Limited: Extend or Cancel?

  1. Jardinero1

    I rode this from Houston to El Paso in 2004 with my then three year old daughter and six year old son. They had a great trip and still have great memories of their train ride. We had a first class sleeper both ways and it was cheaper than flying. Everybody was like, “oh, you are such a cool dad to take your kids on a trip like that. I was miserable. The 780 mile trip to El Paso took 30 hours. The return journey was 20 hours. I suffered horrible nausea from the endless rocking of the carriage. The cabin fever became most intense when the train had to pull to the siding to allow freight trains to pass. I nearly went postal, when we pulled to the siding for 45 minutes, in El Paso itself, just three miles from the station whilst a freight train passed.

    The Sunset Limited it a boondoggle. It has zero utility as transportation. It has only marginal touristic value. There are better routes to subsidize, if one must subsidize. Kill it.

  2. prk166

    It’s pathetic that we continue to subsidize these trains. Our SNAP low balls per meal costs. For the average family of four getting SNAP benefits, it leaves a $400+ gap every month. Think of that, cutting the Sunset Limited would mean that we could properly fund SNAP and ensure that 25,000 months worth for families to have complete meals.

  3. C. P. Zilliacus

    The Antiplanner wrote:

    Most people think that Amtrak’s Northeast Corridor makes money while the rest of its trains are subsidized. There’s a persistent myth in the railfan community, however, that the long-distance trains really make money but Amtrak shifts some of the Northeast Corridor costs to them to make the corridor appear profitable.

    I defer to you on the subject of Amtrak accounting generally and the Northeast Corridor (NEC) in particular.

    A few thoughts:

    (1) Does anyone know how Amtrak accounts for the revenue that it collects from NS and CSX for running freight trains on the NEC? I know that CSX must run on the NEC to reach the Pope’s Creek Subdivision to deliver coal to two coal-fired electric generating stations. In order to reach its terminal in Baltimore, NS freight trains must use the NEC either from Washington, D.C. or from Perryville, Maryland (most freight trains must use the NEC only between 12 Midnight and 6 AM). NS also runs some local freight trains to serve smaller customers located along the NEC.

    (2) What about commuter trains (sometimes called “regional rail”) run by the likes of N.J. Transit, SEPTA, Maryland DOT and others? I presume that Amtrak charges transit operators the fully-allocated costs of having these trains on the NEC.

    (3) There are a considerable number of trains that run on the NEC as far south as Union Station Washington, D.C., then continue to points as far south as New Orleans and Miami (the electrified territory ends at Union Station, so there is always a change from electric locomotives southbound to Diesel-electric and vice versa northbound).

  4. Frank

    “SNAP low balls per meal costs. For the average family of four getting SNAP benefits, it leaves a $400+ gap every month. …we could properly fund SNAP and ensure that 25,000 months worth for families to have complete meals”

    It is quite possible to buy and eat healthy raw vegetables, rice, beans, and chicken for $25 a week per person.

    If you want to buy soda, chips, cereal,ice cream, and pre-processed crap like frozen and boxed dinners, there might be a gap.

    SNAP should be completely defunded and food charity should be left to private institutions as the food lobby will never allow for reform of SNAP, which increases obesity and is easily abused.

  5. The Antiplanner Post author

    CP Zilliacus,

    Amtrak says it collected $62.9 million in “freight access fees” in 2016. It collected $120.8 million in “commuter revenue,” though I’m not sure how much of that was from NJTransit and MARC running trains on the NEC and how much was from Amtrak running commuter trains for other transit agencies.

    The cost of running trains on the NEC that then continue beyond the NEC is charged to those trains, even though many riders get on and off within the NEC. This is where some rail advocates claim that Amtrak is shifting NEC costs to other trains.

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