Hooters Air goes buh-bye - plus the triumph of hope over experience

After a week of hemming and hawing, they came out and said it. Sorta. The official announcement is no more Hooters Air reservations past April 17. But since that's also the date of the last flight out of Myrtle Beach, SC, that's probably the end.

Hooters is the second high-profile airline shutdown this year; Independence Air quit flying Jan. 5. Some of Independence was bought by the bankrupt Northwest Airlines, which plans to use it to launch a regional carrier called Compass Airlines. That is, if the pilots union and a bankruptcy judge approve.

As a note to all the Amtrak-bankruptcy fans out there, here are 2 unpleasant facts of life in bankruptcy:

1. Judges rule. You have to get a permission slip from the bankruptcy judge to do much of anything beyond continuing operations.
2. Getting all those permission slips costs big money.
   
   • United paid its bankruptcy lawyers $335 million in its 38 months under Chapter 11.
   • Delta's lawyer bills are running about $10 million a month.
   • Northwest's are running just under $5 million a month.
     

Meanwhile, airfans investors in Columbus plan to start their own airline. They even have a fun little name for it: Skybus. But of course naming is the easy part. As a skeptical Tom Parsons, founder of bestfares.com, told the Dispatch, "There is no such thing as the friendly skies anymore."

More great observations about the extraordinary popular delusions and the madness of startup airlines appear in this IAGblog entry.

Once again, your conductor must ask: Is it possible that it's just a wee bit more difficult to make money carrying passengers than critics and railfans would have us believe?

Megastunt: $1 bus trips out of Chicago

to places like Detroit, St. Louis and Minneapolis. Coach USA's new Megabus brand is launching service here in the USA out of its Chicago hub.

Maybe this will be some good news for Coach USA's owner, Stagecoach Group plc--which has a rough time of it since buying Coach USA for £1.2 billion ($1.7 billion) in 1999.

• In 2001, the company was forced to write down the value of Coach USA by some £376 million
• In 2002, it took another £575 million writedown for Coach USA and accelerated plans to "restructure" the subsidiary by selling off big "non-essential" chunks of it.

Got all that? Stagecoach paid £1.2 billion for Coach USA and within 3 years marked it down nearly 80%!

• To shed load, Stagecoach sold its Coach USA business in New England to Peter Pan Bus Lines in 2003.
  

Stagecoach is also in the train business big-time. It holds three passenger-train franchises in the UK and has a 49% share of Virgin Trains.

Does Megabus represent a competitive challenge to Amtrak? To some extent, sure. Amtrak killer? Probably not. Back east, LimoLiner hasn't exactly pushed Acela off the rails.

In Gary, Ind., what it takes to move forward

As the name indicates, Gary Chicago International Airport (GYY) nurses hopes of becoming a reliever passenger airport for the Chicagoland region. In February. the airport got some good news: the promise of a 10-year, $58 million loan program from the FAA.

Why is this such a big deal? As the Northwest Indiana Times reports, the airport

will no longer have to depend on annual congressional funding allocations. Instead, it can move forward with long-term efforts outlined in a 20-year master plan -- including railroad relocation and runway extensions.

One of the biggest hobbles on Amtrak is, of course, its dependence on annual congressional funding allocations. Congress prefers to string Amtrak along one year at a time. Critics like to bash Amtrak for pursuing short-term goals--but if the short term is all Congress gives you, what other terms are there to manage for? If we want an Amtrak planned and managed for the long term, it's time to tell Congress to give it one.

P.S. Note the word "hopes" in the first paragraph. Although several airlines have flown out of GYY in recent years, the airport appears to have no current passenger service.

• Southeast shut down in November 2004
• Pan Am pulled out June 30, 2002
• Hooters Air's last GYY flight was Jan 9 of this year. (UPDATE: Looks like Hooters' last flight, period, will be April 17.)
  

For photos of the airport's two (yes, two) passenger boarding bridges and its baggage claim area (yes, area), click here.

UK update: Sunderland gets direct trains to London

Britain's Rail Regulator approved Grand Central Railways' new service on March 23, over the objections of the operator GNER, the primary user of the East Coast Main Line.

Seems a little odd to your conductor that even though GNER doesn't own the tracks (Network Rail does), it would still claim dibs on who gets to use them.

Grand Central now joins Hull Trains and the airport shuttle Heathrow Express among the "open access" operators on the UK's rails. And so the Great UK Rail Privatization Experiment rumbles on.

There really aren't many parallels between the UK passenger-train network and Amtrak (a topic we'll examine regularly), but here's one: Outside the Northeast Corridor, Amtrak functions much like an open-access operator. It gains access to the rails only through careful negotiation and occasionally government intervention--and the process can take time. Lots of it. No clearer example of that, of course, than what it took to get Amtrak's Downeaster running between Boston North Station and Portland, Maine.

Why transportation matters: It means jobs

According to this Newsweek story on low-cost European airlines, "[a]ccording to a standard industry measure, every extra million passengers in the sky bring 3,000 jobs on the ground."

To restate this on an Amtrak-appropriate scale, every 10,000 passengers means 30 jobs.

Now let's be conservative and cut this figure in half. Train passengers probably create fewer jobs than airline passengers because trains require less in the way of "ground services." That still makes 15 jobs for every 10,000 passengers.

Ready to see how many jobs your Amtrak station adds to your community? Look up the passenger count on your state's fact sheet and enter that figure below:

passengers jobs

Direct v. connecting service: Passengers know the difference

Amtrak-watchers occasionally clamor for Amtrak to extend the Heartland Flyer south to San Antonio and reroute the Texas Eagle west from Fort Worth to El Paso. Under this scenario, passengers who want to travel from, say, Texarkana to Austin would have to change trains in Fort Worth. As would passengers from L.A. to San Antonio. Currently these are one-seat rides on the Eagle.

But here's a news flash from the UK: Passengers are smart enough to know the difference between direct and connecting service.

Residents of Sunderland will know tomorrow if Britain's rail regulator will allow a new "open access" carrier onto the East Coast Main line--giving them a one-seat ride to London. Current service involves a change in Newcastle. At best.

Sunderland isn't exactly a wide place in the road. Grand Central Railways claims "more than a million people" in its proposed service area. And in a country where 70% of all train service has one endpoint in Greater London, direct service there is a very big deal.

It's one thing to draw lines on a map--quite another to change human behavior.

We saw that on the Amtrak system about a decade ago, when Amtrak's board cut all but one western full-line train to less-than-daily service. The consultant who cooked up this plan figured that travelers would simply adjust their schedules to fit the train's. But they didn't. As the Amtrak board learned the hard way, people want to go at their own convenience.

As Amtrak's network expands, a key goal should be to expand the number of city pairs with direct service. For example, your conductor favors one-seat service from Milwaukee to St. Louis, Indianapolis or even Detroit. That would require run-thru capability at Chicago Union Station. The good news: The track is already there. All that's needed is targeted capital investment to make it passenger-train-friendly.

Something you'll never read in a Delta news release:

Delta lost $36.60 per passenger in January.

On March 3, the company reported a $300 million loss for the month. On Feb. 3, it reported boarding 8.24 million passengers in January.

You'll find all kinds of ratios reported in those news releases:

• yield (revenue per passenger mile)
• revenue per available seat mile
• cost per available seat mile
• earnings/loss per share
• average load factor (revenue passenger miles per available seat miles)

But you'll never see "loss per passenger" quoted in an airline's investor-relations news release.

Why? Because it's a pseudo stat. It doesn't tell an investor anything worth knowing. So why do Amtrak critics continue to cite "loss per passenger" in their news releases?