Yes, it’s possible to have a profitable railroad

FI-Talking-Transportation-Jim-CameronHardly a week goes by that someone doesn’t ask me… “Why doesn’t a private company take over Metro-North and run it properly?”

But the reason that all U.S. railroads got out of the passenger business  in the first place is that there was no profit to be made. Even with the highest rail fares of any commuter railroad in the U.S., Metro-North’s tickets still cover less than 75% of their actual operating costs, and that’s not counting the billions in capital spending needed to keep the rails, bridges and signal system running.

Yet, earlier this summer, I actually rode a profitable, privately owned passenger train. It only runs 45 miles but commands $85 to $175 per ticket one way. It’s been running for more than 130 years and carries over 160,000 very happy passengers a year.

It’s Colorado’s Durango & Silverton Narrow Gauge Railroad, one of the most spectacular railroads in the world.

“People will pay a fair price to see history,” says owner Al Harper who, along with his wife and three sons, is hands-on in running this National Historic Landmark every day. His passengers come from around the world to the tiny town of Durango just to take this ride.

The D&SNGR runs three to four steam powered-trains up the mountain to the tiny town of Silverton (which has only one paved street) using restored passenger cars kept painstakingly in working order by dedicated craftsmen.

Unlike depressing historic rail lines in the East, which run a few cars two miles down a track then return, this is a fully working railroad with a paid year-round staff of 75 that, in the summers, swells to 200, many of them volunteers. I know I would pay them for the privilege of volunteering on this railroad, and some folks do.

For $1,000 (one-way), you can ride in the cab of their old steam locomotives wearing authentic overalls and cap. You can even help them shovel coal into the boiler. For $134 (one-way) you can ride in an open gondola car, or for $175 you can enjoy the three-hour ride sipping wine in a restored 1880 first class car.

While many who ride this line are railfans (“foamers” as they are pejoratively called by most railroad folks, because they foam at the mouth when they see a train), history buffs or western fanatics, the D&SNGR’s owners know they have to grow their audience so they offer discounts for kids and many other specialty excursions. Brews and Blues, a cowboy poet excursion and many seasonal trips make use of the train but, no, they have no plans for Reefer and Rails despite the legalization of marijuana in Colorado. Durango has yet to authorize retail sales of pot.

They are clever marketers, packaging the train ride with horseback riding, ATVs, camping and other activities. And, importantly, they have the support of their community, which recognizes how much this little railroad means to the economy. Eight years ago it was calculated that the railroad brought $100 million a year to Durango in business for hotels, meals and shopping, not to mention those employed by the railroad.

Imagine that, a railroad that people will travel thousands of miles to ride, are willing to pay high fares because they get an amazing experience, owned by people making a good return but reinvesting for future generations of customers, while keeping the local economy thriving.

Yes, you can run a great railroad that people love and turn a profit.

 

Jim Cameron has been a commuter resident for 23 years and is the founder of the Commuter Action Group. The opinions expressed in this column are only his own. You may reach him at [email protected]

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