A train at what price?

VIA Rail timetable cover, 1981. (Click for source)

VIA Rail timetable cover, 1981. (Click for source)

“Sleeper trains occupy a romantic corner of travellers’ souls,” ‘B. R.’ wrote in The Economist‘s travel-related ‘Gulliver’ blog this past week. “But we are not quite fond enough of them, it seems, actually to ride them.”

The result: Even in densely populated Europe, long-standing passenger rail services are facing the axe, as the article goes on to explain:

This week, the Paris-to-Berlin sleeper pulled into an early morning Hauptbahnhof station for the last time. Competition from low-cost airlines has put paid to the service which has run, in varying guises, since before the second world war. Flying between continental Europe’s two major capitals, travellers have noticed, is usually cheaper than the €140 ($175) or so that the train charges; it is also always quicker than the 13 hours it takes.

‘Gulliver’ goes on to note that Deutsche Bahn’s Paris-Berlin sleeper service was thus losing €20 million ($28 million Cdn.) annually, and that similar overnight services elsewhere in Europe are also in distress.

If long-haul rail travel is facing a reorganization in Europe, it surely merits the same discussion here in Canada. VIA Rail’s latest annual report, for the 2013 fiscal year, makes for grim reading. The Canadian, VIA’s legendary 4,000-kilometre (2,500-mile) Toronto-Vancouver route, operated at a $54 million loss in 2013, surviving on subsidies equivalent to an eye-popping $550 per passenger.

The Canadian is far from being VIA’s only money pit. Eight other routes were subsidized at more than $100 per passenger, with the Winnipeg-Churchill route being the most heavily subsidized of them all at $772 per passenger.

Even in the busy Toronto-Ottawa-Montreal corridor, passenger revenues barely covered 60 percent of costs; and VIA’s 3.9 million annual passengers system-wide are roughly equivalent to what Air Canada and WestJet combined carry in a month.

Which brings us to an important question. Now that air travel has gone from being the luxury product that it was in the Seventies to the privately owned (and finally profitable) intercity mass-transit system that it is today, do we still need a publicly owned and heavily subsidized passenger rail system?

Perhaps some justification can be found between Montreal, Ottawa, Toronto and Quebec City, where subsidies are less than $50 per passenger and frequent passenger rail service reduces the burden on the region’s highways and airports. With a move to airline-style fees and add-ons, potential exists to bring those subsidies down to a less irksome level.

The financially disastrous long-haul routes, however, might be better off in private hands (or discontinued if no buyer can be found) in the absence of any solid public-service argument to be made for their continued subsidization. The Rocky Mountaineer, a private service, already competes with VIA for affluent domestic and foreign tourists in western Canada.

Lessons can also be learned from Down Under. In 1997, the unprofitable, publicly owned Sydney-Perth, Melbourne-Adelaide and Adelaide-Alice Springs passenger rail services were sold to Serco, a British conglomerate. Serco subsequently upgraded the trains to offer a hotel-on-wheels service aimed at the same affluent-tourist market that the Rocky Mountaineer pursues.

Little is known with certainty about the financial state of the Australian passenger rail services. Serco reportedly claimed back in 2001 (!) that two of the three passenger lines were profitable, but has more recently put the business up for sale as a “non-core asset” as the controversial conglomerate tries to recover from a lousy 2014. Yet the fate of those routes — known as The Indian PacificThe Overland and The Ghan — could prove instructive if and when a future Canadian government gets around to a rethink on railway policy. 

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About theviewfromseven
A lone wolf and a bit of a contrarian who sometimes has something to share.

3 Responses to A train at what price?

  1. d eckberry says:

    first have you ever taken it ,second did you do the research on the taxes revenue that it creates from all the side industry’s, sometime you have run something’s at a loss for the greater good and right wing thinking can only get you so far when you look at a small piece of a greater puzzle forethought and greater vision is need here not narrow mindedness and self-services

  2. theviewfromseven says:

    Yes, sometimes services are provided at a loss for a greater public good. Local public transit is a fine example of this, and perhaps so too are VIA’s high-frequency short-haul services in the Toronto-Quebec City corridor. It is difficult to see how a 2-3x weekly land-cruise service, subsidized primarily for an affluent and often non-resident customer base who in many cases can afford the amount covered by the subsidy, can be justified as a loss for the greater good, much less as a progressive idea. If there is evidence that to the contrary, then I would be happy to change my thinking accordingly.

  3. Doug Moberg says:

    Drop the prices, maybe there would be more passengers. Train is a great way to travel.

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