And the same positive externalities … or more by some people’s thinking.
Sam perhaps not false but incomplete and possibly a bit misleading, albeit probably honestly so.
When I went to Europe for a year, I expected that to be the case - flying = faster but more expensive, rail = slower but cheaper. Strangely, my general experience was often the converse - there are a number of budget airlines that can get you from city to city for much less than the comparable train ticket, but it was sometimes less time-efficient to take a flight than a train because for the flight you needed to get to the airport (often further from a city centre than the train station), arrive early, go through airport security, collect your baggage on the other side, etc. For a train, you get on one side, you get off on the other side - and with a night train there was often zero time wasted.
When it comes to comparing taking the train vs. taking a car, one factor that needs to be considered is whether you need a car at your beginning and end destinations in the first place. As Sam mentioned, if you need a car to get to the train station in the first place, and you need one to get around in the city, then people might still be inclined to continue driving. If you could just walk/take good public transit to where you need to go, it would go a long way towards people using the train/other inter-city shuttles. Unfortunately, Calgary doesn’t lend itself to well to that - there isn’t even a direct public bus or shuttle from the Calgary airport to downtown! I understand that many American cities are in a similar situation with poor public transit.
I don’t see that at all. Is Microsoft profitable? General Electric? Yes. Do they benefit from some government programs or get some subsidies? Yes. Airports are no different. Profitable airports collect revenue and pay out expenses, and turn a profit. Some operations are funded by the FAA, but then they collect special taxes to give to the FAA. They also have many regulations and mandates imposed on them.
For example, a local noise abatement lawl can cause an airport to have to rip up a runway and build a new one. New regulations for runway marking and lighting or security can cause infrastructure changes. Some of this stuff is paid for by the government, some isn’t. Aviation is a heavily regulated industry, and that imposes costs on airport and airline operations. So the government taxes air travel, then disperses the funds to pay for those costs. Within those parameters, airports operate as separate entities, and the majority of them turn a profit. And by the way, there are a lot of costs imposed on the air travel system by the government that they are not compensated for. For example, security changes cause delays all the time, which cost the air carriers money. A LOT of money.
The FAA’s budget is about 14 billion dollars. The trust fund takes in 80-90% of that. the other couple of billion dollars pays for general FAA operations, personnel, research, safety analysis, and that small direct subsidy to small airports which is the real ‘pure’ subsidy that is offered to airports, and amounts to a little over 100 million dollars.
I should point out that airports in Canada are largely profitable as well, and yet we have a privatized air traffic control system.
That other list of ‘subsidies’ brickbacon linked to is extremely tendentious and misleading. For example, it’s ridiculous to call military pilot training a ‘subsidy’ of air travel. For one thing, there’s a glut of pilots. For another, many of them don’t get military training. For yet another, there’s no evidence that military pilot training reduces cost of airline operations one bit, since the airlines aren’t the ones who pay for pilot training - the pilots pay for it. By the same logic, you could say that Microsoft is heavily subsidized, because many of its engineers graduated from state-funded universities.
Likewise, calling the development of military aircraft a subsidy of airline operations is equally ridiculous, unless you want to start claiming that every civilian technology that had some aspect built for military use is a subsidy. And of course, most civilian aircraft have no military funding component. Yes, the military buys hardware from civil aviation manufacturers. This does not amount to a subsidy any more than my computer is ‘subsidized’ by you, because you bought hardware from the same manufacturer.
It’s also ridiculous to call the Civilian Reserve Air Fleet a ‘subsidy’. It’s roughly akin to saying that insurance is subsidized by insurees who do not make a claim in a given year. Air carriers are paid to guarantee availability of their fleet to the government in times of emergency. That’s a liability for the air carrier, and there are also direct costs in modifying operations to make sure the fleet is available if necessary. For that, they are paid a retainer. The government gets good value out of this, because if the program didn’t exist the government would have to buy additional aircraft for emergency purposes, and maintain them. If the civilian fleet vanished, the cost to government would go UP. It’s crazy to call that a subsidy.
It seems to me that the same thing could be said for many train and bus stations. For example Secaucus Transfer was paid for by government money as far as I know.
I wouldn’t call this a subsidy since the military would arguably have to bear the cost of training these people regardless of whether the airlines would benefit.
I’m skeptical of this. Looking at public schools versus private schools; or government security guards versus private security guards, it seems that government employees frequently get paid more than private employees performing the same jobs.
Whether this is really a subsidy depends on how much the government is paying for this service.
I wouldn’t call this a subsidy either since the government arguably needs military aircraft regardless. In other words, one efficiency of air travel is that it can make use of research which would be done in any event.
Is that for all fares? Or some subset? In any event, I suppose you could call that (if it’s true) a subsidy. Nevertheless, there is essentially no competition with rail fares.
Apparently rail has a similar exemption.
And what about domestic rail service? There is essentially no competition at all there. If you want to take a train from New York to Washington, you pay what Amtrak is charging you.
Sam Stone, in your defense of airport profitability, I still haven’t seen you address whether that includes construction costs. Who pays for things like Denver International Airport ($4.8 billion) and the expansion of Logan Airport ($4.4 billion, including a new runway). A new taxiway has been approved for Logan; that alone will cost $43 million.
According to USAID, here are the main ways airports are funded:
You could argue that the tax-exempt bonds are a partial subsidy, but they are the standard way most facility improvement projects are financed. For example, the referendum California passed a couple of years ago to fund their 35 billion dollar HSR link was to be funded through a tax-exempt bond issue. Most airports are run by local and state governments, and they have the power to issue those bonds. Note that these are still bonds that have to be paid back through airport revenue. Their tax-exempt status for investors just makes them more desirable, which raises their price a bit. Only the interest earned on the bond is tax exempt, so we’re talking about a small difference - the tax on maybe 5% per year, or an average of perhaps .5% or 1% of the bond price.
All in all, the vast majority of the cost of airport construction and upgrading is paid for within the aviation system, and not out of general government revenue.
If you need to express nothing but personal contempt without contributing to the discussion, open your own thread in the Pit.
[ /Moderating ]
I live in Jacksonville, FL. Two days ago, I had to drive to the Miami area. It took 4 1/2 hours to get there at 85-90mph, and then 6 1/2 on the way back due to having to reroute around an accident on the interstate. If I could pay under $100 and be there in 1 1/2 hours I would be willing to make that trip daily. As it stands now I don’t even want to think about having to make that trip again…not for a few weeks, anyway.
Florida tossed this idea around at the state level in an election a few years ago…I’ve always like the idea…link Jax, Orlando, Miami, Tampa, and Tallahassee. 5 metro areas, all are 2-4 hours apart by car, and traffic is horrendous in all. I’ve spoken to 2 people since opening this thread, they both agreed with me…we’d ride this thing all over the state, all the time, as much as possible. If I could hop on a route to Indianapolis and get there in 4 hours instead of 14 I would go back home and see my family several times a year as well.
I doubt that high speed rail would average 260 miles per hour, especially when you consider that there is a trip to or from the train station on either side; waiting for the train; and stops on the way. Also, just like road travel, trains can have unexpected delays too. A serious train delay, such as a closed bridge or section of track, is often a lot worse than a serious car delay in my experience.
Thats what I’m saying. Nobody builds something with delays/accidents in mind. Flying is statistically safer than driving, no? I’m no actuary/accountant type, but how often do you hear of serious train accident? I’m not talking about the totaled cars, no harm to train, but the derailment type. I can think of a few offhand, but it doesn’t account for all of the plane crashes I’ve heard about. Even if your statistics don’t put you in Miami in an hour and a half, but maybe two and a half hours, its still more beneficial than driving.
I think railroads are neat so I would like to see it built, but I don’t think it’d be profitable.
You have to really examine WHY things don’t work well.
For instance if you look at subways, they are great, so long as you are riding point to point exactly and don’t mind putting up with other people shouting into cell phones, playing their radios, gambling openly, asking for money or other things.
The fact is a car is always better if you can afford it. For instance, where I live if I take the subway to the John Hancock, where I used to work next to, it took me one hour and ten minutes and that is IF and IF I caught the connections. Average time was 95 minutes.
A car even in bad traffic was 25 minutes, usually 15 or 20 minutes. That is a huge savings by car. So unless you’re going point to point it don’t work well, unless a car is out of your price range.
Who will use this high speed rail? If it’s business people, forget it. They would rather be there sooner. I took Amtrak to NYC and it was HORRIBLE. Bad service, bad schedule, over crowding, no seat guarantees and it took 22 hours. I can be miserable for 22 hours or fly on a plane and be miserable for about 2 hours or less.
What would you choose?
I am a fan of railroads so I hope they build it. But they should choose a corridor that is most likely to succeed, build it then sit back and see if it goes over. If so then expand it in stages.
They have, and it is.
Full story here: Acela trains may expand to meet demand.
Fair enough. I again stress that I have mostly reached the same conclusions you have, but I think you are being slightly disingenuous here. This is not some semantics argument; the basic question is how profitable are airlines/airports? Without loans, exemptions, etc., they would be losing tons of money in many cases. In fact, according to this article in 2008, Southwest was one of the few remaining profitable [URL=“http://247wallst.com/2008/04/17/is-southwest-th/”]airlines](http://www.dot.gov/bib2009/htm/FAA.html). More here:
So the real questions shouldn’t revolve so much around Amtrak not making a profit as it should the fact that most/many companies providing transportation do not make a profit, despite healthy “subsidies”. It has less to do with Amtrak, and more to do with the nature of the beast. That’s why I took isue with what you seemed to be implying. Especially since you ignored the most important part of my last post.
Any way you slice it, airports/airlines get 25 times the subsidies trains do. That doesn’t mean HSR is the way to go, but the cost argument isn’t particularly compelling when all that is being taken into account is the bottom line.
I absolutely responded to your last paragraph. I disputed your numbers, because they seem to be treating the various trust funds as a ‘subsidy’. What 13 billion in subsidies? Can you break those down into something more specific? Because I just finished posting that almost all money received by airports from the feds actuallly comes from the Aviation Trust Fund, which is funded by usage fees and excise taxes. So it’s simply not a subsidy.
And we were talking about airports, not airlines. Yes, lots of airlines have lost money. But when they do, they generally go out of business. The fact that aviation businesses fail does not make the system subsidized.
I pointed to some actual subsidies of air travel - tax-free bond issues, a couple percent of airport construction coming from state and local government, 110 million to subsidize small airports, etc. 13 billion is close to the entire budget of the FAA. So where are these subsidies coming from? The one list of ‘subsidies’ you posted was completely bogus.
Unfortunately, civilization in any form seems to be most feasible where people live closely packed together.
In some places that is feasible, but in others it won’t be. True high-speed rail runs 150 mph and up, requiring wider turns, lower grades, and dedicated lines. It’s not just a matter of laying new passenger lines alongside old ones.
Just tossing this out, don’t flame me as I am admittedly ignorant on most of the particulars, but there already exists cross-traffic-free corridors which stretch between major cities. They’re called interstates. Could they build the high-speed lines in the medians of the interstates? Yeah cost is the biggee and I won’t argue the point, but certainly one big selling point would be seeing the train blast by you while you are stuck in a traffic jam. I mention this because I read a proposal several years ago which suggested using the interstates in this manner.
That would be neat, but that depends on the speed of the train. The very high speed ones (200mph+) need quite straight lines or curves with large radii, much larger than the ones of the interstates. The same can be said about slopes.
I’m pretty sure that the California system doesn’t need any right of way acquisition, although I may be wrong. This cite is where I recall reading that from.