If you have decided to take a train trip recently, you will notice that the pricing is quite high.
The prices of train travel have continued to increase through the years.
This has come as a great disappointment for many people who enjoy travel.
For others who use it as a general form of transportation, it is nearly impossible to take the train from point A to point B.
There are several reasons trains have gotten so expensive.
Some of these reasons are out of the control of the passengers, but they are still worth considering and understanding.
Here are ten reasons trains are so expensive.
Why Are Trains So Expensive?
1. Track Ownership
The tracks that we ride on when on a passenger train are not all owned by Amtrak.
Even though Amtrak is the owner of the trains for private passenger travel, they only own about 600 miles of the track that they travel on.
Other areas of the track are owned by other businesses and freight companies.
This may not seem like a major concern considering the trains are really capable of going anywhere, but it brings up some cost issues.
The track not being owned means that Amtrak must pay to rent this space from other companies.
The price that is paid for a rental can be quite high.
When you consider that not all of these trains are filled with people as they once were, the overall pricing of this project continues to increase.
Therefore, Amtrak is forced to take passengers on a train that is not full, along a track that is costing them money just to be running that train on.
As you can see, this formula is not a good one for the company’s bottom line.
The track ownership issue plays a major role in why trains are so expensive.
For now, there is not much that will be done about this as the tracks are owned by so many people, and the rent they charge is only fair considering upkeep and usage as well.
Certainly, this model has not left much room for change or improvement.
2. Airplane Travel Increasing in Popularity
Airplane travel is continuing to get more and more popular.
With flight prices decreasing and people becoming more and more comfortable with flying in airplanes, you will continue to see airplanes being a favorite way to travel.
You have to consider the difference in the flight time as well.
When traveling on a train, it could take you days as opposed to traveling by air that will take you mere hours.
Of course, some people who don’t like to fly will be better off using the train, but this is certainly not the majority.
Airplane travel is only getting cheaper, and this is certainly not helping the train industry anymore.
When a person can get somewhere faster and cheaper, they are almost always going to make this choice for their travel needs.
For Amtrak to lower pricing to try to compete with the airlines simply does not make sense.
The company is already losing money, and their trains are not full.
If Amtrak started to become profitable and had the ability to offer these rate changes and deals to customers, then they may very well do so.
For now, we don’t expect to see the pricing of train travel start to compete with that of airline travel.
Unfortunately, the difference in practicality and popularity is just too great.
3. Government Funding
With the decrease in Amtrak’s popularity, the government has had to step in to help subsidize the railroad.
The problem is that the amount that they have subsidized does not compare to the way the government has helped other businesses.
Even most recently with the COVID-19 pandemic and the impacts on the travel industry, the airlines were bailed out to help save them from having to fire employees and shut down parts of their operation.
These bailouts are controversial because they are expensive, and they put the airlines in what seems like a position where they cannot fail.
This same type of help and source of revenue does not exist for Amtrak.
The government looks at it like Amtrak has been a pain in its side for many years.
The amount that they have had to try and help bail out Amtrak through the years is frustrating because it has never gotten to a point of profitability.
Some people will argue that the reason behind this is the way the model is set up.
There may be no chance for Amtrak to become profitable, and it certainly won’t happen without the continued help of the government.
4. Conductor Salary
Of course, the salaries of employees are going to be a price factor in any business, but in the train business, this is a significant factor.
Train conductors and engineers tend to make quite a bit of money.
Not only does it take many years to get to this point in your career that you are responsible for a train, but the job market is quite small.
If you want to be a pilot, there are likely going to be more jobs for you than the high-paying conductor jobs at Amtrak.
Of course, this means that the pool of people to choose from when it comes to the potential conductors is going to be quite a bit lower.
For Amtrak to retain great train conductors, they need to pay them more than $75,000 per year.
For a train that is not filled with people, this is going to be a hard fee to justify.
The train industry is in a tough spot because they need great conductors, yet they truly can’t afford them.
Although the amount of train travel has decreased, people are still needed to run every train that leaves the yard.
5. Hourly Labor
Although we mentioned the train conductors and engineers and the high wages that they are paid to do their job, there are other employees on the railroad.
Of course, one of the highest expenses of any business is going to be the labor.
People are expensive because they perform jobs that are not always possible for a machine or a computer to do.
There are lots of jobs on a railroad that still need to be done by employees.
This is a major problem because of the cost of hourly labor.
If you look at the fact that a plane can take a person entirely across the country in about five hours compared to several days on a train, this is a lot of time.
That time equates to money.
The longer employees need to be on a train and need to be at work, the more they are going to have to be paid.
When you consider the overtime that some of these people will make on longer trips, the pricing becomes almost too complex to even fathom.
Essentially, the hourly labor paid to train employees will continue to make trains expensive for years to come.
6. Gasoline Prices Are Low
Gasoline prices are low, and they have remained relatively low for many years.
Although there have been brief periods where the pricing of gas was slightly on the rise, they are not quite the same as they once were.
When train travel was very popular, people were choosing it because gas was so expensive and it was increasing the price of both airline and car travel.
The government continues to step in and lower the gas tax, and unfortunately, this continues to hurt the train industry.
However, with the impact that car and airplane travel have on the economy, chances are you are going to see gasoline prices stay quite low for a long time.
When people look at a cross-country or intrastate trip with a car, they do the calculations on the price of gas as well.
When the gas price does not even come close to touching the train’s ticket price, it is hard for people to consider the train.
Of course, the train will make things easier when it comes to allowing people to work and complete tasks during the ride.
The problem is that most people won’t want to pay the extra money that they have to in order to take the train trip.
7. Supply and Demand
Whenever something is expensive, and it continues to increase in price, you can usually look at the supply and demand factor.
The demand for train travel is continuing to get lower and lower.
Certainly, the concept of supply and demand is an advanced economic principle that could take quite a bit of study.
However, when you consider the issue with trains, it gets a bit convoluted.
The demand for trains is very low, yet the price still remains quite high.
The problem is that the supply for these trains does not continue to lower.
Even though some of these routes are not even close to being financially sound, Amtrak has a hard time completely stopping them.
The government, of course, wants trains available to all citizens.
They want them to have the option of trains as opposed to airline and car travel.
In order for all of these routes to stay open and available, the pricing is going to have to be relatively high.
Essentially, the supply and the demand for train travel have not yet come close to the balancing point that makes sense for all involved.
It remains to be seen if this balancing point or equilibrium will ever happen.
8. Car Culture
Car culture is essentially the popularity of the automobile.
Unless you live in a very urban area, it is hard to find a group of people who do not own cars.
Cars are something that most households have at least one of, and many have three or more.
Cars have become easier to obtain, and they are very convenient.
Instead of having to wait for a train to travel at a specific time, they can take off and arrive at any time they want.
Cars are also very easy and comfortable to drive.
People feel comfortable in their own space with their own things as opposed to sitting on a train that they don’t know that much about.
For these few-hour trips that used to be very popular to take on a train, you will see more and more people choosing their car instead.
As long as the gas prices stay low, you will likely not see a return to train travel for quite some time.
The impact of the car on our economy and our world is undoubtedly one that plays into all kinds of economic measures.
9. Upkeep of Trains and Tracks
We talked about paying employees and the impact this has on the price you pay for a train ticket.
However, there is another very high cost of keeping the railroad industry going, and that is the upkeep of the trains and tracks.
Trains are not easy to take care of, and in addition to the trains, the track also needs upkeep.
The pricing of these train repairs is high because they can also put the train behind schedule.
The repairs need to be handled quickly and efficiently, and because of that, the price is relatively high.
Many times, independent contractors need to be brought in who can help to complete these projects and get the trains and the tracks back up and running.
If you look at the overall business model of trains and taking care of their tracks, it is only going to get more expensive.
The trains are getting older, and the tracks are getting older as well.
Newer engines being brought to the market are extremely expensive, and they are not necessarily justified in a market that is not currently thriving.
You can expect that the next time you take a train ride, part of what you are paying for is the maintenance and upkeep of the train.
Last but certainly not least is the fact that Amtrak is in charge of passenger train travel.
The fact that Amtrak is the only name in the game positively impacts the prices that people pay.
When you are stuck with just one company to choose from, the pricing will increase quite a bit.
When you look at airlines, you will see that you can make some choices that will allow you to save money.
If you want to take a high-end first-class flight on American Airlines, you can do so.
If you want to fly Spirit and save yourself some money, you have that option.
With train travel, your options are not as broad, and therefore, the pricing that you pay will be impacted.
Paying a higher price for your ticket is going to be your only option.
This is why most people will choose air travel and car travel over train travel.
This problem is likely to continue for many years, and unfortunately, this will continue to drive up the ticket price for trains.
Amtrak is certainly not going anywhere anytime soon, but we won’t be able to get great deals on train travel for the foreseeable future.