The North American passenger rail market

Railway Age, March, 2007 by Greg Gormick

As Victor Hugo wrote, "No army can withstand the strength of an idea whose time has come." It is becoming apparent that travel by rail is one of those ideas whose time has come. It gained increased strength in public and political minds in 2006.

Even as gas prices declined, the surge of ridership experienced throughout North America in 2005 continued. Boardings increased by nearly 3% in the first nine months of 2006, as Americans took 7.8 billion trips on public transit. Light rail had the highest percentage of growth (5.4%), followed by commuter rail (3.2%), and heavy rail (2.8%). In lockstep with their choice of travel options, voters choose rail transit when they cast their ballots in November. Big wins for rail transit were scored in California, Minnesota, Seattle, Salt Lake City, Fort Worth, and Kansas City. Where rail transit measures failed, advocates are regrouping for further attempts.

In Canada--where one-third of the population considers itself transit dependent--the preliminary figures indicate another record year, with 2006's growth equal to the entire annual ridership of Edmonton Transit. As do their American cousins, Canadians want more public transportation and they want it now. An Ipsos Reid poll conducted for the Canadian Urban Transit Association indicates more than 60% of Canadians believe government transit funding is inadequate.

Despite the perennial lack of clear political commitment, both of North America's intercity passenger systems sopped up continued traffic growth and made plans to keep it growing. Even with inadequate capital renewal, Amtrak and VIA both launched new services that attracted new riders and revenue.

The message is clear: North Americans want and have proved they will use rail options when they are available. Against this upbeat backdrop, it would be difficult to not believe that rail travel is, indeed, an idea whose time has come--again. Following is Railway Age's exclusive city-by-city, region-by-region report on this expanding North American passenger rail market.

AMTRAK

When Amtrak president David Gunn was relieved of command in late 2005 by his politically appointed masters--largely because he opposed White House efforts to balkanize and privatize the national rail passenger system--advocates expected the worst. Their anxiety increased when the would-be Washington vivisectionists ushered Alexander Kummant on to Amtrak's bridge on Aug. 29. A friend of the Bush Administration, he had moved through seven private-sector positions in eight years, although one was a short stint as an operating officer at Union Pacific. Rough sailing seemed imminent on Dec. 15, when Kummant threw several senior Amtrak executives overboard.

But then Kummant initiated a sea change by telling Congress that he believes in long-haul trains and will not lightly carve up Amtrak--the very views that got Gunn sacked. He went even further when he countered the White House's request for a miserly $800 million for Amtrak by submitting a Feb. 15 request to Congress for $1.53 billion in FY 2008, which begins Oct. 1.

Amtrak's request includes $485 million for operating subsidies and $760 million for capital programs, including $407 million for infrastructure and $87 million for stations and facilities. It also contains $100 million for a DOT-administered state corridor development pro gram, $100 million for Amtrak debt reduction, $50 million to help freight railroads address delay-causing chokepoints, and $25 million for Americans with Disabilities Act compliance.

In the letter he sent with the federal funding request, Kummant was able to point to a solid year of success. A good portion of it was based on Gunn's trademark state-of-good-repair program and the operational expertise he put in place during his tenure. Kummant told Congress, "Amtrak's recent focus on customer service, along with growing state investment in corridors, has made intercity rail an increasingly attractive option. The result was record ridership in FY 2006 of 24.3 million and record ticket revenues in FY 2006 of $1.37 billion--a jump of 11% from FY 2005. Early FY 2007 trends suggest similar strength, with ridership up 4% and ticket revenues up 10% in the first quarter over the same period last year."

Kummant also outlined a future course combining state and federal initiatives that would see ridership "double over the next 15-20 years, with the bulk of the growth in corridors across the country." Among the most notable of these state-supported short-haul services is northern California's Capitol Corridor, which celebrated 15 years of service on Dec. 12. Begun as a small operation carrying 273,000 passengers annually, it has grown into Amtrak's third largest corridor, carrying 1.3 million passengers. Service was expanded in 2006 to 16 roundtrips from 12 between Sacramento and San Jose.

On the other side of the nation, the Downeaster celebrated its fifth anniversary three days later with nearly 1.5 million passengers to its credit and ridership up 31% in 2006. Expansion beyond Portland to Brunswick is being considered and a fifth train frequency will begin with the completion of a track work program.