VIA Rail

[crs1026]

VIA must clearly have a yield model that shows 2 business carriages on a 5-carriage train provides the best yield. Which is why they ordered what they did. If you want to argue that their business class seating is over-provisioned, I'll wait for you to put up your yield model to back up that assertion.

Even without data, I don’t recall a time when anyone observed that VIA’s Business Class cars were consistently running empty, on any route or train. I suspect that VIA has quietly managed how many cars it has configured for Business, and which trains have them, in a very businesslike way.

I can easily imagine say the 16:00 train out of Toronto having two business class cars... with a demand pricing model that shifts the economy passengers towards an earlier or later train that has more coach seats. That’s one selling point of the high-frequency model, some travellers have precise expectations but others will adjust to when seats are available.

The fly in the ointment is only being able to adjust supply with the adjustment unit being an entire coach. Airlines have a lot more flexibility eg to change how many rows of premium legroom economy class they offer within the same airplane.

To grow the Business business, VIA first has to fill every seat in that first coach (they are probably well on their way) and then add a full second car. That second car will start at 10% full, and grow over time. Utilization as a statistic will fall - and may never recover on a single route or train. 60 of 60 seats sold today vs 100 of 120 seats in five years. There is a cost and a risk to that almost-empty second car. VIa will have to manage the threshold carefully... too conservative, they will turn away business, too aggressive, they will haul too many empty seats.

- Paul

 

[kEiThZ]

Even without data, I don’t recall a time when anyone observed that VIA’s Business Class cars were consistently running empty, on any route or train. I suspect that VIA has quietly managed how many cars it has configured for Business, and which trains have them, in a very businesslike way.

Somebody gets it!

The fact that pre-Covid, there were regularly days and specific departures when VIA One fares were higher than airfare means VIA has room to capture marketshare. They should be able to price a bit more aggressively against the airlines with two business carriages (though the absolute numbers of business seats isn't going up that substantially).

I can easily imagine say the 16:00 train out of Toronto having two business class cars...

Heck, this is why I say that I could imagine a subfleet of say 3-4 all business class trains (with 3-4 business carriages each) operating express from Ottawa and Montreal to Toronto. Leave at morning peak, return run after lunch, and then back out at evening peak. But this would admittedly be quite the risky and bold undertaking for VIA.

The fly in the ointment is only being able to adjust supply with the adjustment unit being an entire coach. Airlines have a lot more flexibility eg to change how many rows of premium legroom economy class they offer within the same airplane.

To grow the Business business, VIA first has to fill every seat in that first coach (they are probably well on their way) and then add a full second car. That second car will start at 10% full, and grow over time. Utilization as a statistic will fall - and may never recover on a single route or train. 60 of 60 seats sold today vs 100 of 120 seats in five years. There is a cost and a risk to that almost-empty second car. VIa will have to manage the threshold carefully... too conservative, they will turn away business, too aggressive, they will haul too many empty seats.

Yep. When their unit size is ~40 seats, fine tuning that demand management gets clumsy, I'm sure.

 

[roger1818]

You are assuming that I have something against economy class. I don't. Travel in it most of the time.

What I want is for VIA to succeed. And capturing a good part of the business travel market is something I think is necessary for that. The fact that business class fares are sometimes higher than airfare is what tells me they don't have enough business class seats. Either that or their yield management model is broken.

You see this as a zero sum game. Ie That a carriage can either be Economy or Business class. But that's not how any transportation business is actually run. It's run based on yield. Return for asset. If yield is too low, there's another option: not buy the coach/aircraft/etc. You seem to assume that VIA would increase Economy class seating if they reduce the number of business coaches. It's far more likely they would have ordered less business coaches to begin with.

VIA must clearly have a yield model that shows 2 business carriages on a 5-carriage train provides the best yield. Which is why they ordered what they did. If you want to argue that their business class seating is over-provisioned, I'll wait for you to put up your yield model to back up that assertion.

And you are assuming that I have issues with there being 2 business coaches on a 5-coach train. I don't! Having 2 business coaches on a 5 coach train makes total sense to me. As do most of the other configurations. If anything, I don't think the 7 coach train has enough business coaches, but that is either a mistake or VIA knows something we don't.

This isn't about demand management. My concern is with fleet management. In case you don't know the difference:

• Demand Management is making sure the trains have enough of the right type of coaches to meet the demand.
• Fleet Management is making sure the fleet has enough of the right type of coaches to build the trains you need.

If VIA only buys standard 5 coach trains and uses them to build all the the lengths trains they say they want, they won't have enough coaches of certain types and too many of others to build all the trains they say they need to build.

 

[roger1818]

This is flawed analysis based around the fixation that the percentage of business class seating must be constant.

Like I said earlier, the markets are somewhat independent. On a given route/segment, they will have demand of xx business pax and yy economy passengers. They can (and will) have demand for different classes scale differently on different routes. But since coaches are a discrete value, that imposes the constraint that the minimum number of business coaches is 1. And they will add a second business coach at a certain demand and yield point. This is what leads them to have only one business coach on all the short configs. It's a minimum offering. And two on all the long configurations. It helps to conceptualize it as VIA having a baseline demand of 1 business carriage on all routes and a second business carriage on some routes.

I think of the configs more like this:

Extra short: minimum viable configuration for any service. Sub-3 hr routes.

Short: Regular economy demand. Low business class demand. Most likely on routes under 3 hrs (Ottawa-Montreal or Montreal-Quebec or all routes originating in Kingston).

Long: Regular economy demand. High business class demand. Most likely on highly frequent and higher premium routes (read TOM routes).

Extra Long: High economy demand. High business class demand. Same as TOM routes.

Absent HFR, I expect Corridor West will be all Short/Extra Short and Corridor East will be all Long/Extra Long. The only exception being services from Ottawa and Quebec City to Montreal which might be Short/Extra Short.

Post-HFR, I expect all Kingston hub and Montreal-Quebec trains to be Extra Short, all Corridor West trains to be Short. And all HFR trains to be Long/Extra Long.

As I said, I have no issues with the proposed trainset layouts. In general they makes sense.

I do question why the Extra Long (7 coach) layout doesn't have 3 business and 4 coach instead of 2 business and 5 coach, but maybe that is because of seasonal demand. I expect business class ridership is relatively consistent all year long, where as economy ridership is likely seasonal. As a result, some trains will seasonally transition from extra short to short and others will transition from long to extra long is likely a seasonal change. Almost never would a train transition from short to long.

 

[crs1026]

If VIA only buys standard 5 coach trains and uses them to build all the the lengths trains they say they want, they won't have enough coaches of certain types and too many of others to build all the trains they say they need to build.

I’m sure there was lengthy analysis and number crunching before the final decision of a mixture of x 3-car, y 5-car, etc was arrived at.

The decision being a government one, there was a challenge process where somebody (from Treasury Board and/or the Transport Ministry, not VIA) laid out arguments about how x seats in the current fleet could be replaced by x-y00 seats in the new fleet because better utilization, standard fleet, more reliability, not all current seats sell anyways etc. I expect it was a lively challenge with lots of back and forth explanation, exchange of data, reworking of assumptions, etc.

What we will never know is a) what VIA’s original ask might have been, and b) whether VIA agreed with (or managed to argue to a liveable compromise on) those assumptions, versus had a less favourable outcome forced upon them and c) whether the end result had a growth provision, and if so how much ?

That challenge process is standard diligence, every capital proposal runs a gauntlet from beancounters and controllers ....and I know I continually harp on “Ottawa“ as VIA’s least helpful friend. Grain of salt, is all I’m saying. VIA will do its best with what it was given.

- Paul

 

[kEiThZ]

If VIA only buys standard 5 coach trains

Who says VIA is doing this?

I do question why the Extra Long (7 coach) layout doesn't have 3 business and 4 coach

Because economy demand scales faster than business class demand.

As a result, some trains will seasonally transition from extra short to short and others will transition from long to extra long is likely a seasonal change.

Or they can just resort to different schedules in different seasons. And run more trains in the summer. Breaking trains and rearranging them only makes sense if demand shifts regionally by season. That's not very likely in the Corridor.

 

[roger1818]

I can easily imagine say the 16:00 train out of Toronto having two business class cars... with a demand pricing model that shifts the economy passengers towards an earlier or later train that has more coach seats. That’s one selling point of the high-frequency model, some travellers have precise expectations but others will adjust to when seats are available.

What do you mean by "the 16:00 train out of Toronto?" Looking at the pre-COVID schedule, I don't see any trains out of Toronto at 16:00 (I also looked at their current COVID schedule just in case). The closest I see were trains 46 and 646 to Ottawa at at 15:40 and 16:35 respectively. AFIK, both of those trains already have 2 business coaches. I guess there is also train 83 to London at 16:35 Is that the train you are taking about?

Or do you mean a new departure? If so, what train would you cut to make room for this new one?

Also, by "2 business cars," do you mean adding a second business car or do you mean a train with only 2 business cars and no economy cars?

 

[roger1818]

Who says VIA is doing this?

Nothing official but I was once privately told that 32 x 285 = 9,120.

Because economy demand scales faster than business class demand.

That makes sense.

Or they can just resort to different schedules in different seasons. And run more trains in the summer.

Sure, they could do that, but seasonally cutting service is counter productive when you are trying to grow ridership.

Breaking trains and rearranging them only makes sense if demand shifts regionally by season. That's not very likely in the Corridor.

I tend to disagree. Ridership does tend to peak around long weekends and holidays. Bad winter weather can also cause a spike in ridership, but that is harder to plan for. I suspect the summer months also has higher demand from tourists. I would be curious what @Urban Sky has to say about this though and if it would be worth seasonally shortening and lengthening the corridor trains.

 

[kEiThZ]

Nothing official but I was once privately told that 32 x 285 = 9,120.

Right. But what they buy nominally, especially announced in some presser, doesn't always line up with final delivery configurations or even how service is configured.

Sure, they could do that, but seasonally cutting service is counter productive when you are trying to grow ridership.

Which is why I said seasonal adjustment is not very likely.

I tend to disagree. Ridership does tend to peak around long weekends and holidays. Bad winter weather can also cause a spike in ridership, but that is harder to plan for. I suspect the summer months also has higher demand from tourists.

Don't need to break trains or reconfigure for this. Just use pricing. The only time reconfig is needed is when they want to physically reallocate capacity from one part of the corridor to the other.

If all that happens is demand grows broadly in the summer or on weekends, they aren't going to be reconfiguring weekly. That can just be yield managed.

 

[crs1026]

What do you mean by "the 16:00 train out of Toronto?" Looking at the pre-COVID schedule, I don't see any trains out of Toronto at 16:00 (I also looked at their current COVID schedule just in case). The closest I see were trains 46 and 646 to Ottawa at at 15:40 and 16:35 respectively. AFIK, both of those trains already have 2 business coaches. I guess there is also train 83 to London at 16:35 Is that the train you are taking about?

Or do you mean a new departure? If so, what train would you cut to make room for this new one?

Also, by "2 business cars," do you mean adding a second business car or do you mean a train with only 2 business cars and no economy cars?

I was speaking generically - the point being any end-of-business-day timed train is likely to have a very high demand for business class. And if today is 2 business cars, then my comments related to adding a third.

Converting economy cars to business cars is probably revenue-enhancing, but I agree that shouldn’t lead to turning away coach customers. One would hope that if business grows, a followup order for more coaches to lengthen the initial trainsets would have a good business case. So long as the fleet starts out with some room for growth, justifying that add-on order because the fleet is full would be a nice problem to have.

- Apul

 

[roger1818]

Right. But what they buy nominally, especially announced in some presser, doesn't always line up with final delivery configurations or even how service is configured.

Lets hope.

Don't need to break trains or reconfigure for this. Just use pricing. The only time reconfig is needed is when they want to physically reallocate capacity from one part of the corridor to the other.

If all that happens is demand grows broadly in the summer or on weekends, they aren't going to be reconfiguring weekly. That can just be yield managed.

I agree they won't break or grow trains frequently, but if there are several quiet months where one or two cars will always be empty, there is no point having an extra coach rolling around. Not only does it waste fuel/energy, but maintenance cost of the coach is distance based. The other benefit is they can do some rotating maintenance during off peak seasons to get things ready for peak seasons.

As for pricing, that can only go so far. It can help encourage people to travel at a different time of day or even a different day of the week, but cheap trains in November won't get you home for Thanksgiving (unless you are American ).

 

[roger1818]

I was speaking generically - the point being any end-of-business-day timed train is likely to have a very high demand for business class.

Ahh. That makes sense.

And if today is 2 business cars, then my comments related to adding a third.

Hence my suggestion that Extra Long trains have a third business coach, if demand warrants it.

Converting economy cars to business cars is probably revenue-enhancing, but I agree that shouldn’t lead to turning away coach customers. One would hope that if business grows, a followup order for more coaches to lengthen the initial trainsets would have a good business case. So long as the fleet starts out with some room for growth, justifying that add-on order because the fleet is full would be a nice problem to have.

Agreed. We need to provide enough supply throughout the day/week to meet the demand in both classes. Having said that, running longer trains than needed throughout the day because one departure can use the extra capacity is poor management. Use pricing to encourage people to use the less popular times and have people who really need to travel during the peak time pay a premium. This applies to both business and economy classes.

 

[kEiThZ]

The way I see it, the only place they probably need two business coaches per train is Toronto-Ottawa and Toronto-Montreal. Everything else is probably just fine with one business coach. The math only get complicated with thru service in Toronto or Montreal.

In any event, I think VIA has bought enough capacity and adding more trains or possibly even longer trains is just going to be problematic when dealing with the railways. HFR is sorely needed. And if it doesn't happen, they will have to tailor their options exercise to mostly lengthening the trains they will run.

 

[crs1026]

^I was actually encouraged when I saw the plan to have 3-car trainsets, as it made clear that VIA wasn't backing away from lower-volume runs. That's important both to the frequency component of HFR and potentially to other routes also.

I don't know how VIA's contract with the railways is structured - there have been snippets said over the years that implied VIA paid in part by the axle count, and at other times by number of train slots used. I suspect both matter to the operating cost, but within the range we are discussing, train frequency is going to matter to the railways much more than the number of coaches. Platform length may be the key constraint.

Even with the existing fleet, we see consists stay together for weeks at a time - the service plan minimises reconfiguration, maintenance is what forces switching. With a reliable new fleet and a supporting maintenance strategy, one would expect that trainsets will stay together just fine

- Paul.

 

[roger1818]

The RFQ was apparently released in 2018 and a cycling plan from that year (May 2018) was thankfully already posted a few months ago:


This cycling plan clearly shows a total of only 10 revenue Renaissance cars in service (8 Economy plus 2 Business) at any time of the week and if you compare the suitcase symbol (indicating checked baggage service) on Quebec-Montreal-Ottawa services in the PDF timetables between June 2015 and March 2020, you will notice that the Renaissance cycling shown below has been virtually unchanged over the last half-decade:
View attachment 292484

Therefore, unless you insist that there must be more than one spare set to back up for these two measly Renaissance sets, the total seat count you calculated shrinks by 720 seats (i.e. 15 Renaissance cars) from 9,536 to 8,816 seats...

I think I have things figured out (though it is a little kludgy). While I have great faith in you as a resource, the thing that bothered me is the following page from the VIA's presentation at the 2019 NGEC Meeting (which was after the RFQ in 2018) clearly says the corridor fleet currently has 160 cars with a total capacity of 9120 seats (between the 9,536 and 8,816 we had calculated).

I just couldn't figure out how to manipulate the numbers to get the quoted 160 cars with a total capacity of 9120 seats. It then hit me. They are saying cars not coaches. What if they are including baggage and service cars?

If you look at the cycling plan, it lists 4 types of HEP cars (H2 CO, H1 CO, H2 CL and BAG) as well as 4 types of Renaissance cars (BAG, CO, VIA1, and SERV). I assume:

• H1 = HEP I,
• H2 = HEP II,
• CO = Economy Coach,
• CL (or VIA1) = Business Coach,
• BAG = Baggage, and
• SERV = Service

Looking at a picture of a Renaissance train I took on May 5, 2018 (below), I saw that it had 7 cars, and looking at cycling plan, that would make sense as with 2 active trains, each would have 1 Baggage car, 4 Economy Coaches, 1 Business Coach and 1 Service car, which aligns with the cycling plan. With the assumption that (as @Urban Sky said) there was (in addition to the trains in the cycling plan) also an identical reserve Renaissance train being counted, that would bring us up to 21 (not the 23 the slide above says, but close, I will get back to that later).

Continuing along in the same vain, cycling plan lists 5 HEP I Coach and 2 Baggage (which would also be HEP I ) so that is likely the 7 HEP I cars. It also lists 19 HEP II Economy and 8 HEP Business Coaches. If you (similar to Renaissance) you also add a reserve HEP II train with 4 Economy and 2 Business Coaches (a common configuration) that gets the number of HEP II cars to 33 (and matches the number of HEP II Economy class cars and Galley business cars listed on VIA's website). By doing all of this, I got the both the number of cars and the Total Capacity very close, but not quite right.

For the total capacity, the HEP I Economy class cars, can have either 60 or 62 seats. If I assume that 2 have 62 seats and 3 have 60 seats, then it works out perfectly. Or it could be that they just rounded the number to 9120, because it was divisible by 32. Either way, it is close.

As for the number of cars, VIA does have a total of 9 Renaissance baggage cars (and 3 Renaissance baggage transition cars). It is possible they assigned an extra 2 (5 instead of 3) to the Corridor fleet for some reason. That also brings the number of Renaissance cars up to 23 as claimed. It is a stretch I know, but it does make the numbers work. Any better ideas?

When you put all of this together, here is what you get:

Type	Qty	Capacity	Total Capacity
LRC Economy	71	68	4828
LRC Business	26	44	1144
LRC Total	97		5972
HEP II Coach	23	68	1564
HEP I Coach	2	62	124
HEP I Coach b	3	60	180
HEP II Club	10	56	560
HEP I Baggage	2	0	0
HEP Total	40		2428
Ren Baggage	5	0	0
Ren. Coach	12	48	576
Ren. Business	3	48	144
Ren Service	3	0	0
Ren. Total	23		720
Econ. Total	106	65.7	6968
Bus. Total	39	47.4	1848
Total	160		9120