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| After just a 20 minute turn from #335, Hiawatha #338 heads back to Chicago with a heavy load of passengers. Photo by David Johnson and NARP |
After losing money for the better part of the decade — even with generous government subsidies and protection — airlines returned to profitability over the last couple of years, but they are now facing difficult times once more.
As oil hovers between $80 and $100 a barrel, showing no signs of reversing course, the airlines are facing the double whammy of an economic downturn and the need to cut costs or service as fuel prices hamstring their ability to remain profitable.
Check the Google news headlines for “airline fuel costs” and see the plethora of stories come back painting a bleak picture of the future for airlines:
“Airlines cut costs to offset fuel prices” & “Fuel costs force Southwest to curb expansion“:
Executives of the big carriers warned that their comeback is threatened by high fuel costs and uncertainty over the economy.
“We are concerned about growing evidence of slowing economic growth that would inevitably affect passenger demand, coupled with a surge in energy prices,” said Southwest Airlines Co. Chief Executive Gary C. Kelly.
Thanksgiving holiday travelers can probably attest to the congestion in the system as they tried to get in and out of packed airports where delays were the the norm and prices were high. Roads weren’t much better, as travelers on the Interstate 95 corridor up the East Coast were stuck in standstill traffic trying to make it home on the Sunday after Thanksgiving.
Meanwhile, while having to lease traffic space from freight companies and without much capital to improve capacity, Amtrak has seen their passenger counts continue to rise, reaching 25.8 million passengers in the last fiscal year alone. Rail travel — especially in regional and intercity corridors — is more energy efficient, results in less emissions, and is often quicker. Routes in the Northeast Corridor are routinely filled to capacity, with the Acela providing service comparable with the speed and convenience of airlines.
Columnist Neal Peirce wonders in his latest column, “Could it be that Amtrak’s time has come?”
America’s train advocates are mildly optimistic. And for some good reasons. Amtrak is reporting impressive ridership gains. Oil is pushing $100 a barrel, throwing a long shadow over affordability of travel on already congested highways. Airport delays hit an all-time high last summer. Global climate concerns are mounting.
Even though Americans are riding in record numbers, the future of Amtrak’s success could be in jeopardy:
…Amtrak expansion could get derailed. Why? If demand keeps rising as seems likely, Amtrak estimates it will lack sufficient cars and backup equipment by the 2010-2012 time frame. Given the multiyear lead times for equipment design and manufacture, this means the procurement process needs to begin right away. Congress can help significantly if it moves swiftly on current bills — the major boost being a $1.9-billion-a-year subsidy recently voted by the Senate, and a separate Senate Finance Committee proposal for $900 million a year to let states issue tax-free bonds to finance new intercity passenger rail infrastructure.
There was also this story in Popular Mechanics about maglev technology, and how some states and corridors are exploring high-speed trains as a better alternative to short flights — as they have proven to be in France, Switzerland, Japan, and others. However, their “potential to resurrect the age of American railroads,” as the story says, will be limited by the political will of our leaders, and whether or not they continue sinking the bulk of our transportation money into the status quo — especially in light of the facts about energy needs and climate change.
Rail can’t and won’t compete with airlines in time or cost for long routes — like flying from New York to Los Angeles. But intercity and regional travel is where rail can really shine — provided we begin updating and investing in the system now.
As always, the National Association of Railroad Passengers is a deep well of research on the benefits of investments in rail travel. And they now have a blog as well. If you think the airline industry isn’t the benefactor of massive subsidies and market protection, check the facts.