kEiThZ
Superstar
Yes. The only limitation is the lack of sleepers for long haul.
|
|
|
VIA Rail
- Thread starter ehlow
- Start date
Yes. The only limitation is the lack of sleepers for long haul.
littlewill1166
Active Member
If you take the average implied cost per passenger and multiply it by the load factor from my analysis below, the breakeven is $68.60 per passenger on the Montreal to Quebec City route assuming a 100% load factor (which is not feasible on a train). Given that there is almost no route to profitability for VIA as shown in my analysis below, the only justifications for funding VIA are political and social. For this, I ask you to refer to the bottom half of my analysis below.
If you do the math, the revenue generated by VIA from business class in the Montreal to Quebec City corridor is roughly equivalent to economy class once you account for the differences in seat density and differences in service. Yet the decreased seat density in business inhibits the ability for VIA to maximize the total passenger capacity of its corridor fleet. I'll edit this post once I have time to clean up my charts.
^This is a chart of revenue and passenger numbers in the Montreal-Quebec City Corridor that I got from an ATI Request. For reference, the load factor on this route was relatively consistent at 70%. The current ratio of Business to Economy (J/Y) passengers is 1:3. The adjusted fare accounting for seat density is around $15 higher. However, the incremental revenue generated from business passengers can be offset by incremental expenses attributable to the additional services these passengers receive (meals, snacks, lounge access, etc.) If VIA decides to reduce its J/Y ratio to 1:2 as proposed in the NGEC presentation. Ceteris paribus, supply/demand dictates that adjusted per seat gross revenue from business class fares will fall below that of economy class.
As seen in the chart VIA's unadjusted average business fare barely covers the blended implied cost per passenger, with economy fares falling far below it. On Tripadvisor and other traveller forums, there are comments saying that VIA's business class isn't necessarily worth it given its higher cost and low added value. In fact, the only real difference I've noticed between the two classes is the food, drinks, and slightly wider seat. These reviews could suggest that VIA is already maximizing their Business class revenues (at least with cash passengers). Furthermore, if VIA decides to increase Business Class fares, it could jeopardize its status on corporate travel policies. As a result, I can't see how VIA will be able to run trains profitably without radical changes to its operations.
From the 2014 APM Q&A "Viewed strictly as a science, the ultimate goal of traditional Revenue Management is to maximize total revenues through proper segmentation of demand. As a Crown corporation, however, VIA Rail has an additional mandate, which is to maximize the utilization of our fleet so that we continually carry more Canadians across greater distances. The challenge of VIA Rail’s Revenue Management team is thus to maximize both revenues and ridership while maintaining a reasonable average fare that reflects the true value of our products and services. "
I can't see how the configuration of the base train set in the new fleet achieves this under a status quo fleet replacement only scenario (remember HFR hasn't been approved yet, and may not happen unless shovels are in the ground). From a political perspective, the optics today of middle/upper-class people riding "fancy" trains with a per passenger subsidy that is roughly equivalent to a lower-class person's Greyhound/Megabus fare doesn't look good. I'm concerned that an exacerbation of this through a focus on business travellers could be one day politically wielded to disband VIA's corridor services given that busses are a vastly more cost-effective method of public transportation. I hope I'm wrong, but the numbers I see don't add up.
Last edited:
Allandale25
Senior Member
This may have already been posted.
ideas.lego.com
Via Rail Canada - The Canadian
Getting 10,000 supporters can make this project a real LEGO set. You can help by voting for my project! Simply click ‘Support’ at the top right of ...
ideas.lego.com
micheal_can
Senior Member
Can they easily be coupled to sleepers?
I am thinking of the challenges with the Ocean and how this might be a stopgap solution.
kEiThZ
Superstar
You are making some big assumptions. Namely that economy class ridership can go substantially at a reasonable rate of recovery. And a corollary assumption that business and economy seats are traded in a zero-sum trade.
Your first assumption ignores the fact that there is a profit maximization point. Adding seats beyond this point would see fares fall and profits fall faster. As a subsidized service it certainly is very relevant to them that profit is maximized. This won't change unless their owner (the federal government) is willing to extend further subsidies.
Your second assumption is based on a point of view taken from commercial aviation. Guessing you're an avgeek? On a plane there's finite space. And so you think that every business class seat comes at the expense of an economy seat. In reality, the limit of trains is the number of cars that can be pulled, which results in discrete combinations of layouts. Several of which, VIA posted in that slide deck and we'll probably see on different segments and time slots. And since these trains can pull more coaches, what's driving their nominal setup of two business coaches? The market for business class seats, which is actually independent of the market for Economy seats.
At this point, you probably think I'm full of it, right? But again I refer back to those corporate travel policies. The alternative to Via 1 in many corporate travel policies isn't VIA economy. It's Economy airfare.
VIA understands this. And I'd bet money they have data that they have undersupplied business seats all these years. If HFR happens, I wouldn't be surprised to see business making up half the cars on any HFR train.
kEiThZ
Superstar
Not sure if they can be coupled with existing sleepers. But these are the same passenger cars that OBB has ordered for their Nightjet service. And their interior was superbly designed by Priestmangoode. I wish VIA could afford to get a custom interior from Priestmangoode.
That looks much nicer than when I used to take the overnight sleeper train from Northern Ontario
crs1026
Superstar
I'm sure they have the data. Business Class is something that VIA excells at.
Actually, I'm always surprised at who else travels Business Class on VIA. Business travellers, certainly, but a huge number of others as well. Recreational young folks for example.... there is a darn good volume of people who enjoy weekends away in the T-O-M-Q travel area. Business Class is not just a Monday to Friday proposition. It's not that much more expensive to be out of sight for liesure travellers, and many people - including myself - enjoy the better amenities.
- Paul
crs1026
Superstar
Doing the added engineering to create a sleeping car equivalent for the Siemens product would be a chunk of change. I'm not saying it can't be done, but it is more complicated than say reconfiguring a B-777 interior from three-class to freight and back to super economy.
Window spacings may not be compatible, HVAC and electricals have to be considered, plumbing is a big challenge. And, there is a whole lot of accessibility, safety, fire, and crash survivability stuff to noodle on.
Both single and double deck Amtrak sleepers are modular, and were designed to be stripped out quickly and reconfigured. So it certainly can be done. But it would be huge new money that isn't justified in the course of reequipping the Corridor fleet. When the time comes to reequip the long distance fleet, a different product might be preferable. Personally I would be happy to see VIA keep its eye on the ball with the HFR project and not try to do both things simultaneously.
- Paul
micheal_can
Senior Member
Well, that would be a good thing. That means we can start having newer fleet rolling throughout Canada.
kEiThZ
Superstar
I'm a huge fan of Priestmangoode. I have not seen a designer that does better aircraft or train interiors. I suspect there's not much budget for VIA to get that kind of service though....
People think Economy is expensive... VIA 1 is way too expensive. And usually reasonably full. Stands to tell me they can add seats and cut the fares a bit. Hopefully steal a tad more from airlines.
I've always wondered if they could just flat out buy the design from Priestmangoode and OBB. It's not like trains designed to run in the Austrian Alps would have challenges in our climate.
smallspy
Senior Member
kEiThZ
Superstar
We ordered the exact same coaches. Are there rules that would make the LOPA that different? Or is there some other issue that concerns you with regulation?
crs1026
Superstar
One would have to take the VIA spec and see if the OBB spec is close enough, or if there are showstoppers. Just spitballing, but issues might be distance related (capacity of holding tanks, for instance) and another might be interior amenities or space parameters. Air brakes? HEP? Entertainment systems?
The moment a change is made, there's reengineering to do.
It's a lot closer to warship and fighter plane procurement than it may seem, or ought to be. "Off the shelf" does not exist, any more than an Australian F-18 is a carbon copy of a CF-18. And somebody is always tempted to "improve" something, or rewrite the mission.
I have no doubt that the OBB procurement was diligent and bought a quality vehicle. I would not have any fear of riding on their trains. But if they were designed using different engineering codes etc, then the design would have to be validated against Canadian codes and Transport Canada regulations. That could, in the extreme, be a complete redo of the engineering calculations. Transport Canada will insist on it.
- Paul
Last edited:
Bureaucromancer
Active Member
This is very true. With advance booking I've seen the business/economy price difference be small enough that it saves me money to travel business and count on the meal.
As far as sleeper service goes, its amusing to dream about and MIGHT have a market, but what really bothers me is that no railway seems to be intent on implementing airline level lie flat, possibly even pod like, seating. Trains are perfect for this sort of arrangement, and it seems like the ideal niche for enabling overnight service that people would actually use for business travel while not requiring the level of expense associated with full sleeper service.
With regard to true long-haul equipement, it seems to me like SuperLiner style cars would be much more of a drop-in Budd replacement than adopting something European. On paper Amtrak is looking for a Superliner replacement in the second half of this decade and it seems to me like VIA would have a lot to gain by signing on to that program for western services and relegating the Budds to the Maritimes.
Last edited: