[dunkalunk]

I'm a bit disappointed to not see Kitchener included in the high speed rail routing, however, I can agree that the distances are a bit close and full 300km/h service may not be warranted. However, VIA's current schedule and competing bus service take almost twice as long to get to Downtown Toronto as it currently takes to drive there. I doubt it, but I hope current governments can see the value in improving travel time and electrifying this corridor to bring the Toronto-Kitchener trip down to under an hour, regardless of how it may effect Greyhound's monopoly on the route.

 

[k10ery]

You forsee Air Canada selling HSR tickets for $200 when they currently provide the flights for significantly less and have control over the process?

No I don't. K10ry said that, and I wrote a long post disagreeing with that statement.

I said nothing of the kind. I just said that HSR is likely to be more expensive than air, just like it is in Europe. If it is going to happen, it will happen because people regard it as BETTER than air, not CHEAPER than air.

Though for the sake of argument: If Air Canada was selling code shared HSR tickets, then OF COURSE they would sell them at a higher price than their air fares. They would be the last ones to want to cannibalize their own demand by undercutting air fares.

 

[sjc]

Kind of like how it's irrelevant that the current Toronto streetcars are designed operate at 110 km/hr, when the highest posted speed limit as far as I know is 60 km/hr.

Are the streetcars limited to the posted speed limit when they are on offstreet tracks (such as near the Humber)?

 

[nfitz]

Are the streetcars limited to the posted speed limit when they are on offstreet tracks (such as near the Humber)?

A good question ... I pondered that when I wrote it. It's not like they (or anything else) sticks to the posted 40 km/hr limit in other locations.

 

[sjc]

If HSR fares are the same as a flight then they won't be winning over very many people.

The basic problem that I see with the HSR debate is that, while it may have made economic sense 15-20 years ago when it costed $400 to fly to Ottawa from Toronto (each way), airfares have come down in the past few years so much that there is no longer very much pricing room for HSR to come in with a competitive service.

Checking Air Canada, it would cost someone $225 (after tax) to fly one way to Quebec from Toronto this coming Saturday (date chosen randomly). The flight will take 1 hour and 40 minutes. While individual flights might be more expensive (as it happens Toronto to Montreal that day is more expensive at $270), this is the sort of price range HSR must compete with. Since flying is almost always going to be faster than HSR, HSR is going to have to have a price advantage to succeed. (EDIT: Perhaps there is some price flexibility; both Porter and Air Canada want $321 (after tax) for just about any flight this week from Toronto Island to Montreal. Perhaps HSR could work at the $150-200 Toronto-Montreal price point?)

Unlike regular rail (VIA), HSR seems to be focused on providing service between major centres (Windsor, Toronto, Ottawa, Montreal, Quebec) that already have good transportation links between them and not at providing service to smaller communities (adding stops adds time). I don't see the need to spend billions of dollars to provide what we pretty much already have. (People living in Kingston might disagree with me, but I think Kingston could use better air service).

The biggest advantage airlines have over HSR for providing point-to-point travel is that they only need to build infrastructure at the points at each end of the journey. HSR must have physical infrastructure at every point along the way that must be built and maintained. As well, airports can spread their costs among many destinations -- the "Toronto-Montreal" segment of travelers is only a small percentage of the total travellers at either Pearson or Dorval.

The marginal costs of adding new destinations is low as well -- if someone decides that there should be a high speed transportation link between Ottawa and Sudbury, they just need to buy or lease some airplanes. There is already an airport at either end that they can rent space at.

EDIT: I have no objection to their being an HSR line in Ontario and Quebec, but I don't particularly want to see tax dollars going into it. If it is an economically good idea, someone will want to do it.

 

[kEiThZ]

The 1995 study anticipated an operating ratio (expenses as a percentage of revenue) of 40% at first, and 29% by 2025. For the updated study let's say that ratio is 35% - at $1.2 billion in revenue that works out to $780 million in profit. If that's year one and profits go up from there, it would probably take 20-25 years to pay for the capital costs.

That $780 million may not be enough to pay interest costs and pay down principal. As long as interest rates stay phenomenally low and government finances the whole thing maybe. But any other arrangement and borrowing costs could wipe out any profit estimate.

I'm not convinced that HSR is the best option for southern Ontario. Don't get me wrong, I think faster is better and there is some opportunity for 300km/h speeds, such as between Windsor and London. However, HSR focuses on longer-distance travel, whereas travel in southwestern Ontario tends to be relatively short town-to-town trips. Skipping cities such as Chatham, Guelph or Brampton might do well for average speed, but it won't do much for maximizing demand. I think we should be aiming for regional service with 300km/h segments, rather than HSR with some local stops.

Agreed. There's also the political landmine of VIA reducing services to Southwestern Ontario. I would suggest that a Toronto-Ottawa-Montreal-Quebec City line be built. And upgraded regional rail be built for Southwestern Ontario.

Another thought: A Pearson Airport station would generate tons of demand, especially on the Toronto-Kitchener-London corridor. Was that included in the study?

We'll find out soon....

If the forecast is for 11 million passengers, then I think $1.2 billion would be an operating profit estimate, not gross revenue. An HSR fare won't average as little as $100 - perhaps twice that.

Why would it? Ultimately, they'll have to price according to demand and I agree with gweed below, they'll have a tough time pricing it at $200 (in today's dollars) and attracting tons of ridership.

I somehow doubt that many people would be willing to pay $200 for a 1-way trip from Toronto to Montreal, even if it is faster than existing train/bus/car. HSR trains tend to be longer than the current VIA trains, correct? More people per train = more revenue per train. I would hope that prices would remain around the same as what they are today (well, today's prices + appropriate inflation).

They might draw riders from airlines. But I think they'll have a tough time getting riders out of their cars with fares like that. We're reaching the age of more efficient cars. And 10-15 years from now, virtually every car will be a hybrid, and there will be quite a few fully electric models in service too. Aside from wear and tear on the car, most riders always consider the marginal cost of driving that far. Today, even at gas at $1.5/L, a car averaging 6L/100km, would only need $45 to get to Montreal from Toronto. Even taking depreciation (40 000/250 000km = $50/500km) and maintenance ($3000/100 000km = $15/500km), that Toronto to Montreal trip works out to $110. And that's rough math on most decent sedans today (hybrids and diesels already do better). Once you toss in the time and cost at the destination city, it's still worthwhile to drive long-distance if you have more than one person. And tomorrow's fuel efficient cars will be cheaper to buy and operate. It's really not hard to foresee a $40 000 car in 2020 being able to achieve 4L/100km. Even at $3/L, fuel costs for a 500km trip would only be $60.

For the record, I checked online this morning and for 2-week advance purchase, NY-DC was USD190 on Acela Express, and London-Paris was GBP115 on Eurostar. If your fares are right, I think I need to find myself a better travel agent!

You should check out how cheap the Eurotunnel is. And considering how much the GBP has dropped in last few years, GBP115 is not all that much. Also, fuel costs in the UK is exorbitant. That makes GBP115 from London to Paris a relative bargain.

 

[kEiThZ]

So? VIA has a stop at Montreal Trudeau and they could build one at Toronto Pearson too.

They could. However, the real value is downtown to downtown. Not too many business travellers have as their goal travel from around Pearson to around Trudeau.

In Europe, HSR is code-shared with airlines. It easily could be here too.

Yes, agreed. If implemented properly HSR should be a real force multiplier, for lack of a better word, for airports--and reductions in necessary air capacity should be included in cost calculations. One of the main reasons a country the size of France gets by with exactly one major hub airport is seamless rail connections far and wide from CDG. Frankfurt is similar for western Germany.

The motivations are very different. Airports like CDG face major traffic and capacity constraints which makes HSR attractive for the airlines. They get to send less profitable short-haul traffic by rail while using their slots for more valuable long-haul traffic. Air Canada at Pearson faces no such constraint....or at least it won't for a very long time.

 

[reaperexpress]

The motivations are very different. Airports like CDG face major traffic and capacity constraints which makes HSR attractive for the airlines. They get to send less profitable short-haul traffic by rail while using their slots for more valuable long-haul traffic. Air Canada at Pearson faces no such constraint....or at least it won't for a very long time.

I was under the impression that Pearson was also suffering from capacity issues. That's why they want to build another GTA airport in Pickering. Improving rail service would alleviate the capacity issues, saving the immense and undesirable cost of adding more air travel capacity.

EDIT: Yes, here it is. The 2007 Pearson Airport Master Plan expects capacity to be exceeded by 2030, even with some expansions:

Toronto Pearson will be developed to its optimum capacity, which will be likely be reached within the 2030 planning horizon.

Reliever airport capacity will be required at other airport sites in southern Ontario before 2030.

 

[nfitz]

I was under the impression that Pearson was also suffering from capacity issues. That's why they want to build another GTA airport in Pickering.

Pearson is forecast to have capacity issues in the next 15-20 years based on current travel patterns and population projections. In the meantime it could still handle a lot more growth, and they haven't many parts of Terminal 1 yet.

Remember that Mirabel was built for similar issues, and the projections were totally flawed, with all passenger traffic now back at Dorval, and only freight at Mirabel. If Pickering is built, I would expect it would only handle Freight, and some local traffic for many years. Hamilton is another option, that has a lot of capacity.

 

[k10ery]

You should check out how cheap the Eurotunnel is. And considering how much the GBP has dropped in last few years, GBP115 is not all that much. Also, fuel costs in the UK is exorbitant. That makes GBP115 from London to Paris a relative bargain.

It's $180. When exchange rates get back closer to where they should be it will be over $200. And to repeat my point again a Canadian HSR would of course charge over $200 for a similar distance.

 

[reaperexpress]

Pearson is forecast to have capacity issues in the next 15-20 years based on current travel patterns and population projections. In the meantime it could still handle a lot more growth, and they haven't many parts of Terminal 1 yet.

Remember that Mirabel was built for similar issues, and the projections were totally flawed, with all passenger traffic now back at Dorval, and only freight at Mirabel. If Pickering is built, I would expect it would only handle Freight, and some local traffic for many years. Hamilton is another option, that has a lot of capacity.

It's true that Pearson could be expanded to handle much more traffic, but such expansion would cost tons of money. Same with a Pickering airport. So if we're spending tons of money to expand capacity in mid- to long-distance travel, why would we spend it on airports and not on a higher capacity and more economically/environmentally sustainable mode of transport?

 

[nfitz]

It's true that Pearson could be expanded to handle much more traffic, but such expansion would cost tons of money. Same with a Pickering airport. So if we're spending tons of money to expand capacity in mid- to long-distance travel, why would we spend it on airports and not on a higher capacity and more economically/environmentally sustainable mode of transport?

One reason to spend the money at Pearson, other than on other projects, is that expanding Pearson costs the public purse nothing. The last phase of expansion at Pearson (new Terminal 1) was funded by debt that is paid off from operating revenue.

While there is optimism that the Toronto-Ottawa-Montreal portion of a High Speed Rail line would operate in the black, it could never cover the capital costs, the same way Pearson does.

I encourage you to look at the Pearson financials - http://www.torontopearson.com/en/gtaa/financials/

Also, if you look at the most recent annual report, you'll find that there is no growth in domestic traffic, despite significant growth in GTA population. If anything domestic traffic is dropping over the years. The growth is US and international traffic. High Speed Rail won't do anything to help this. And if you broke down the domestic traffic, much of it would be for cities for which High Speed Rail isn't suitable, such as Vancouver, Halifax, or even Thunder Bay. The amount of traffic for which HSR competes with Pearson is relatively small.

 

[dunkalunk]

I hear many comparisons between air and rail exclusively, but what about the potential for rail to take away from private vehicle traffic? Taking the train from Toronto to Montreal is already leaps and bounds better than driving that same leg.

 

[kEiThZ]

I was under the impression that Pearson was also suffering from capacity issues. That's why they want to build another GTA airport in Pickering. Improving rail service would alleviate the capacity issues, saving the immense and undesirable cost of adding more air travel capacity.

EDIT: Yes, here it is. The 2007 Pearson Airport Master Plan expects capacity to be exceeded by 2030, even with some expansions:

That is based on a projected population of the GTA of 8.2 million and with no significant diversion of aviation (say to Hamilton for example).

The construction of the Pickering airport is only tangential to Pearson's capacity issues. This point is not widely understood. Pickering airport is meant to consolidate general aviation traffic from Buttonville, Oshawa and possibly Markham and the Island airports as well. It could act as a Pearson reliever beyond 2030 if necessary. But from now till then, the plan is only for a GA airport. That won't cost billions.

It's true that Pearson could be expanded to handle much more traffic, but such expansion would cost tons of money. Same with a Pickering airport. So if we're spending tons of money to expand capacity in mid- to long-distance travel, why would we spend it on airports and not on a higher capacity and more economically/environmentally sustainable mode of transport?

The difference between airports and railways is that air travellers pay for the construction and expansion of airports and those projects are often undertaken without using government capital. In the case of HSR, the taxpayer is being asked to provide financing, bear the financial risk of failure and possibly even subsidize travellers. Meanwhile the airports actually provide hundreds of millions in rent to the federal government while paying for their own improvements.

I do support HSR, but this idea that the government should spend on rail because they spend on airports is very outdated. The government does not spend anything on airports in major urban centres. It uses them as revenue sources. This actually incentivizes government not to invest in rail. Why would they invest in a service that is financially risky and could severely impact another revenue stream? But if the airport rents are dropped, gross airfares would decline a fair bit.

 

[kEiThZ]

I hear many comparisons between air and rail exclusively, but what about the potential for rail to take away from private vehicle traffic? Taking the train from Toronto to Montreal is already leaps and bounds better than driving that same leg.

That's all about making it cheap enough. Make it cheap enough and the car will be uncompetitive. I doubt that will happen though. Drive a hybrid or diesel today and it might well be cheaper than VIA some days. And it most certainly is cheaper to drive if there's more than one person going on the trip. And VIA doesn't even have a massive debt to payback...like any HSR would.

Some simple calculations:

Toronto-Montreal return
$1.5/L X 5L/100km X 1000km = $75 (Gas cost)
$0.03/km X 1000km = $30 (Maintenance cost)
$0.12/km X 1000km = $120 (Depreciation)

A VIA rail ticket on the other hand easily costs $130 or more. Now most drivers will just take gas costs into account. By this measure it's cheaper to drive to Montreal. Even if they take wear and tear into account, it's cheaper to drive. Only if they take vehicle depreciation into account is it pointless to drive. And most drivers won't do that....because they've already paid for the car.

For an HSR to be successful at stealing auto traffic, I'd argue that it has to have prices in line with VIA today or even lower. Anything more and it won't do much to dent auto travel down the 401.