(The following article by Peter J. Howe was posted on the Boston Globe website on January 28.)
BOSTON — Amtrak’s high-speed Acela trains, launched five years ago to compete with Boston-New York-Washington flights, are moving to an airline-style fare system next month, pushing higher fares for last-minute business travelers but better deals for flexible leisure travelers.
Under pressure from President Bush and Congress to reduce its $1 billion annual losses, Amtrak said yesterday it is instituting an aviation-inspired ”revenue management” plan for Acela and the New York-Washington Metroliners Feb. 6.
Instead of three fare levels pegged only to what time of day people ride, Amtrak will offer five levels. They will include a top fare 15 percent higher than current levels for peak-period trips bought at the last minute, as well as a new discount fare 15 percent below today’s lowest prices for people willing to travel in the middle of the day or late night and buy tickets weeks or months ahead.
From Boston’s South Station, Amtrak now charges $190 to $234 for a round-trip Acela ticket to New York’s Penn Station. Under the new system, walk-up peak-period tickets could jump to $270. Discount tickets would be available for as low as $162 round-trip.
In comparison, a flight booked yesterday for Monday cost $538 for the Delta Air Lines and US Airways shuttles from Logan International Airport to New York’s LaGuardia Airport. It would cost a $30 flat fare for a Fung Wah Bus trip to New York. Amtrak offers eight weekday Boston-New York-Washington Acela trains, which take 3 1/2 hours to get to New York and 6 1/2 to Washington.
Amtrak began experimenting with revenue management on slower regional trains in the Northeast Corridor in October. Amtrak spokeswoman Tracy Connell said the railroad is working out exactly how many of the most and least expensive seats it will offer on each Acela run. ”It will vary from train to train, depending on demand,” Connell said.
With Acela service shut down for several weeks in the summer because of brake problems, combined Acela-Metroliner ridership dropped 17 percent during the year that ended in September, to 2,452,902 riders, Amtrak figures show. Cheaper seats could help draw more riders.
For decades, airlines and hotels have been perfecting complex ”yield management” systems, which seek to maximize profits for flights and rooms. Typically they charge the lowest prices to early shoppers and super-high prices to last-minute buyers with no alternatives, but they can also offer last-minute sales to fill up airplane seats or hotel rooms that would otherwise go unused.
On a given airplane flight, it’s common for passengers to have paid as many as 20 different fares, with top prices four times higher than the cheapest.
”It’s about time that Amtrak entered the 21st century,” said Allen Michel, a Boston University School of Management finance professor who studies travel. ”Revenue maximization works, and as Amtrak sees it works, you can expect to see the spread on fares grow even wider.”
Neil Bergquist, a pharmaceutical industry consultant from Brighton who rides Acela to New York at least once a month, said he doubted he would be put off by a 15 percent fare increase.
”I would almost always buy my ticket at the last minute, so that would have a negative impact on what I pay, but I don’t like taking the shuttles,” Bergquist said. Even if the price went up $40 or $50, ”I’d still rather be able to sit on the train and get some work done.”