lenaitch
Senior Member
Depending how "short flight" is defined, it's difficult to cut them without a reasonable alternative in place (not planned, proposed, suggested,thought-of); otherwise you drive people back to personal vehicles.
|
|
|
VIA Rail
- Thread starter ehlow
- Start date
micheal_can
Senior Member
Outside the corridor, there is no rail service that would be able to do this.
... now, if they only had a way to do it...
Urban Sky
Senior Member
I assume “micheal_can” has blocked me here just like he has on Skyscraper Page (where he is known as “swimmer_spe”), but the following has already been discussed here (and even more so on SSP) ad nausea to an extent that I strongly suggest to anyone tempted to reply to this comment to first browse through the last 20 or 30 pages in the discussion of the ”VIA Rail” thread on Skyscraper Page and to see how these discussions with him keep monopolizing the discussions in that thread, while frustrating posters wishing to discuss other topics:
I’m not arguing that these discussions shouldn’t be allowed here, but with the experience of more than 1,400 posts in only 6 months of existence of that thread on SSP (approximately one-quarter of them written by himself), I would strongly recommend to outsource this topic (“Can we restore daily intercity passenger rail service outside the Corridor?”) into a separate thread, so that we preserve the breathing space required to discuss other topics.
Thank you and have a great evening!
I’m not arguing that these discussions shouldn’t be allowed here, but with the experience of more than 1,400 posts in only 6 months of existence of that thread on SSP (approximately one-quarter of them written by himself), I would strongly recommend to outsource this topic (“Can we restore daily intercity passenger rail service outside the Corridor?”) into a separate thread, so that we preserve the breathing space required to discuss other topics.
Thank you and have a great evening!
Last edited:
p_xavier
Active Member
@Urban Sky Any news on the Mount Royal tunnel sharing between HFR and the REM? News I hear from my part, it's not even being considered into engineering plans.
kEiThZ
Superstar
Difficult to do this in Canada. But....post-HFR I can see public servants in Ottawa required to use rail for some trips to Ottawa, Montreal or Quebec City. The booking tool already shows carbon footprint. At some point this will become accounting....
kEiThZ
Superstar
I am most curious to know how pricing would work. I am hoping for fares competitive enough to kill Greyhound and Megabus.
Also, hoping VIA can pull off air-rail integration at Dorval post-HFR and REM extension to Dorval. It's kinda crazy that Air France-KLM had three buses per day departing from Ottawa's VIA station for PET Airport. Those seem like easy low hanging fruit for VIA. Along with all the other carriers at Dorval that don't have connections with Air Canada to fly passengers to Ottawa and Quebec City.
Also, hoping VIA can pull off air-rail integration at Dorval post-HFR and REM extension to Dorval. It's kinda crazy that Air France-KLM had three buses per day departing from Ottawa's VIA station for PET Airport. Those seem like easy low hanging fruit for VIA. Along with all the other carriers at Dorval that don't have connections with Air Canada to fly passengers to Ottawa and Quebec City.
littlewill1166
Active Member
Given that VIA sometimes gouges students with $120 economy class tickets from London to Toronto, while Greyhound charges less than half of that during the Holidays, I'm not very comfortable with VIA having a monopoly.
kEiThZ
Superstar
If they overprice, the monopoly won't last long. Not hard for a bus operator to launch new service.
Also, I asked if they could compete at those levels. It's good for every traveler if they can.
crs1026
Superstar
^VIA will likely apply the same demand pricing that they practice today. It would be foolish not to. It’s a standard good business practice. Advance booking and off peak travel - big savings. Peak travel, enhanced business level service.... yeah, the price will be higher.
What may be different will be seat availability. Imagine if VIA were serving London every hour at Christmas instead of 5 or 6 times a day. It might take a different pricing to fill those extra seats.
I don’t believe that VIA will be allowed to price in a way that is predatory to bus service, even if they can do so at a profit. Politics will still have its role. Hopefully the result is competitive in the best way.
- Paul
What may be different will be seat availability. Imagine if VIA were serving London every hour at Christmas instead of 5 or 6 times a day. It might take a different pricing to fill those extra seats.
I don’t believe that VIA will be allowed to price in a way that is predatory to bus service, even if they can do so at a profit. Politics will still have its role. Hopefully the result is competitive in the best way.
- Paul
Last edited:
littlewill1166
Active Member
While I agree with your idea about what things should look like. It seems like VIA is going in a different direction and targeting high-yield business travellers over leisure travellers. According to the proposed trainset layouts here (slide 10), the base trainset capacity is 87 business/194 economy seats or around a 1:2 ratio. In comparison, Air Canada has around a 1:8 ratio here. There are also issues with the fact that the total capacity of the new fleet being less than that of the current fleet mentioned in a post a while back. I also don't see how VIA is able to compete with the bus companies on price while being profitable given that their current per passenger subsidy is equivalent to the starting fares on the busses here (page 11). Ultimately, I see VIA going after expense accounts with good service being the driver of its future ridership. Meanwhile, those on a budget will be relegated to grabbing a ride with friends or the dreaded bus.
Edit: In some ways, VIA's new model (with its new fleet), somewhat reminds me of what Singapore Airlines is doing with its Newark-Singapore non-stop flights. A Business/Premium Economy only service. Of note, this pivot towards higher yields isn't new. Commuters were hit all the way back in 2012 here.
Last edited:
crs1026
Superstar
^VIA's fare policy is just good business - with the fleet constrained by government, one can set prices high. VIA has no obligation to set prices at a level that some demographic might prefer. It's supply and demand pricing, Selling 300 seats at $20 or selling 200 seats at $30 delivers the same revenue, and the 200 seat train is probably cheaper to operate.
The fleet replacement reflects a status quo for fleet size, but VIA has options to enlarge the fleet if they raise the capital for HFR. That could lead to more equipment and more seats. It would depend on the business case - if VIA adds a train, can it sell those additional seats and at what cost? Does it make sense to procure one more trainset? If the breakeven point on the 200 seat train is $15 per seat, then $20 might fill the train where $30 might not.
- Paul
The fleet replacement reflects a status quo for fleet size, but VIA has options to enlarge the fleet if they raise the capital for HFR. That could lead to more equipment and more seats. It would depend on the business case - if VIA adds a train, can it sell those additional seats and at what cost? Does it make sense to procure one more trainset? If the breakeven point on the 200 seat train is $15 per seat, then $20 might fill the train where $30 might not.
- Paul
micheal_can
Senior Member
Would the new equipment work on other routes?
kEiThZ
Superstar
It's not an apple-to-apples comparison. The cost to offer a business class seat on an airplane is substantial. The fare pricing is also substantially higher than Economy which limits the customer base.
This is VIA anticipating a growth in business traffic. And that is both a good thing and understandable if you understand corporate travel policies. There's a lot of corporate travel policies (including the government's own policies for public servants) which will allow business class on a train in lieu of economy airfare. This is what will allow VIA to grow its business travelers. And that is not coming at the expense of economy travelers, but in addition to them.
Desjardins-Siciliano specifically stated that this effort was aimed at growing marketshare against driving. I don't get how that can be accomplished by making fares so high that people bus instead. If VIA can't compete against buses, they most certainly can't compete against cars. I'm taking him at his word and trying to understand how this can be done.
kEiThZ
Superstar
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: