Texas Central Project

[livincinco]

Southwest is a national airline now if they had a issue with this they would've stopped it in its tracks already.

 

Can you please expand on how a company that doesn't even make the Fortune 100 would have stopped a completely private venture "in its tracks"?

[arche_757]

Can you please expand on how a company that doesn't even make the Fortune 100 would have stopped a completely private venture "in its tracks"?

 

So now this thread will devolve into a series of "one sentence responses"  ....Great!  I can't wait!

 

And lets all agree that Southwest does have a lobby - all the airlines do.  Southwest is the 160th largest company based on Fortunes list of 500.

Edited June 20, 2014 by arche_757

[august948]

Can you please expand on how a company that doesn't even make the Fortune 100 would have stopped a completely private venture "in its tracks"?

 

Here's some detail on it.

 

http://www.psmag.com/navigation/business-economics/how-high-speed-rail-died-in-texas-thrived-in-spain-32021/

 

 

The TGV in Texas, meanwhile, folded in 1993. What killed it was not just a lack of private investment but also Southwest Airlines, the Dallas-based carrier, which noticed a threat to its home turf and launched a “sweeping, aggressive public relations campaign throughout the state to discredit TGV and prevent the company from meeting its fundraising deadlines,” according to the Austinist website.

So the last time Southwest did it through an aggressive pr campaign.  No sign of that so far so maybe they've decided they can live with it.

[livincinco]

So now this thread will devolve into a series of "one sentence responses"  ....Great!  I can't wait!

 

And lets all agree that Southwest does have a lobby - all the airlines do.  Southwest is the 160th largest company based on Fortunes list of 500.

 

You are correct.  Southwest is the 160th largest with an annual revenue of about $17 billion.  JT Central, the backers of Texas Central, have an annual revenue of approx. $14 billion.

 

I agree that Southwest has a lobby, but they don't have the power to get this killed on their own.  They can certainly make it more difficult for Texas Central to get into business, but it would be a potentially risky move on their part to do so.

 

Remember that when Southwest opposed Texas TGV, they had to be very open and public with their opposition to the point that they even had to publicly hint that they would relocate their corporate office out of state if the project moved forward. 

 

The most important thing to remember though is that Texas TGV actually required a change in Federal Law to allow them to utilize their financing model.  What ultimately killed them was the passive act of not changing that law and potentially Southwest's lobby was part of that lack of action.  To the best of my knowledge, Texas Central doesn't need any action like that to allow them to proceed.

[Slick Vik]

Can you please expand on how a company that doesn't even make the Fortune 100 would have stopped a completely private venture "in its tracks"?

You were the one that brought up the speculation in the first place, I squashed it. Stick with your original position.

[Houston19514]

 

The most important thing to remember though is that Texas TGV actually required a change in Federal Law to allow them to utilize their financing model.  What ultimately killed them was the passive act of not changing that law and potentially Southwest's lobby was part of that lack of action.  To the best of my knowledge, Texas Central doesn't need any action like that to allow them to proceed.

 

I don't know what Federal Law you are talking about. But I do know that what actually killed the Texas TGV was the lack of public financing from the state.  There were two teams competing for the franchise.  One team was up front about requiring some level of public subsidy. The other team claimed to not need any public subsidy, won the franchise, and then could not do the job, because, lo and behold, they needed a public subsidy, which was not forthcoming.

[livincinco]

I don't know what Federal Law you are talking about. But I do know that what actually killed the Texas TGV was the lack of public financing from the state.  There were two teams competing for the franchise.  One team was up front about requiring some level of public subsidy. The other team claimed to not need any public subsidy, won the franchise, and then could not do the job, because, lo and behold, they needed a public subsidy, which was not forthcoming.

 

That's from the attached New York Times article. 

 

http://www.nytimes.com/2014/03/07/us/bullet-train-failed-once-but-its-back.html

 

Quote from the article-

Texas T.G.V.’s proposal was especially ambitious. The company envisioned using technology used in France to build a 600-mile network connecting Dallas, Houston, Austin and San Antonio in less than a decade. Company executives predicted they could draw more than nine million riders a year by 2014.

Some 70 percent of the project’s $6 billion price tag was to be financed through tax-exempt private bonds, more than federal law allowed a company to borrow using that type of financing. The venture hinged on the company’s changing federal law to ease the restrictions.

[livincinco]

So the last time Southwest did it through an aggressive pr campaign.  No sign of that so far so maybe they've decided they can live with it.

 

I don't want to belabor this, my point was simply to not assume that Southwest will not work against this just because they have not yet done so.  I certainly hope that they won't oppose this, but business is about timing and there is no question that Southwest is very well aware of this and is assessing the impact to their business.

 

It's not always the right strategic move to announce your intentions immediately.  Sometimes it's better to wait for the right opportunity.

[august948]

I don't want to belabor this, my point was simply to not assume that Southwest will not work against this just because they have not yet done so.  I certainly hope that they won't oppose this, but business is about timing and there is no question that Southwest is very well aware of this and is assessing the impact to their business.

 

It's not always the right strategic move to announce your intentions immediately.  Sometimes it's better to wait for the right opportunity.

 

That is true.  It sounds like last time around the environment and deal were different from what's now in play.  No doubt TCR has learned lessons from that as well.

 

I was wondering in earlier posts about fares and travel times because it may be that Southwest's best bet is to out-compete the railway on fares.

 

[mollusk]

Agreed that just because Southwest hasn't weighed in yet doesn't mean that they won't.  

 

However, the overall situation is much different now, largely because of the amount of security theater we now have to put up with to get onto an airplane.  Before the Global War On Terror, it was possible to leave my office in downtown Houston, run down to Hobby, get a walkup ticket on Southwest and be at a client's office in downtown Dallas or the LBJ area within two hours.  That's not happening any more.

 

Sure, Southwest started out with the idea of high frequency and low cost on high traffic, shorter routes, using secondary airports.  However, it's now got a lot of much longer fights, and with its AirTran acquisition now goes into places it never did before, such as LaGuardia, Dulles, and Washington National.  Also, it's much bigger in the northeast now than it was the last time the high speed train idea was floated, and competes with trains up there just fine.

[Naviguessor]

So, SWA can oppose all they want and make as much noise as they can. But, since the the HSR project is private, what kind of leverage do they have? The airlines really could use completion. From a consumer standpoint.

[mfastx]

Agreed that just because Southwest hasn't weighed in yet doesn't mean that they won't.  

 

However, the overall situation is much different now, largely because of the amount of security theater we now have to put up with to get onto an airplane.  Before the Global War On Terror, it was possible to leave my office in downtown Houston, run down to Hobby, get a walkup ticket on Southwest and be at a client's office in downtown Dallas or the LBJ area within two hours.  That's not happening any more.

 

Sure, Southwest started out with the idea of high frequency and low cost on high traffic, shorter routes, using secondary airports.  However, it's now got a lot of much longer fights, and with its AirTran acquisition now goes into places it never did before, such as LaGuardia, Dulles, and Washington National.  Also, it's much bigger in the northeast now than it was the last time the high speed train idea was floated, and competes with trains up there just fine.

 

I generally agree with this, but about the Northeast, remember that most Southwest flights in the Northeast are to and from destinations outside the Northeast.  There are some shuttle flights here but they are all smaller planes like US Airways express, JetBlue etc.  And those airlines don't seem to have nearly the amount of flights between Houston and Dallas as Southwest, American and United do relative to population. 

 

Amtrak takes over 50% of the air/rail share up here, a HSR between Houston and Dallas (if done right) would make a huge dent in the airliner's share.  However United collaborates with Amtrak in the NEC and incorporates them into their rewards system, perhaps Southwest might do that with this project. 

[Sparrow]

I realize Texas Central Railway has made allusions to Japanese investors for their project, but what degree of possibility exists for the airlines themselves to invest in this mode of transportation? If HSR is faster and cheaper to operate and takes in the same or higher farebox revenue, why wouldn't the airlines consider investing? If you can't beat them, join them. Is there any legal barrier to entry for an airline to diversify their transportation portfolio? If shorter air routes are no longer as profitable for airlines, you would think they would consider another means of capturing that market with another, more profitable mode. 

 

Think of the advantages say United could achieve if they were the owner of the HSR line between Dallas and Houston: those flying internationally would have direct, seamless connection to the Metroplex as well as Houston. Think of the market share of the highly profitable international travel that can be taken from American at DFW--without even investing in international routes from there. Of course TCR has said they intend to connect downtowns, not airports, but airline investors would obviously change that.

 

[livincinco]

Intesting point, but I'm not sure it would make financial sense for the airline. Operating a railroad and operating an airline would appear to require completely separate resources and skill sets. That would give Texas Central a distinct advantage because they're able to utilize the engineering, construction, and operational capabilities of their partner. It's also a pretty large capital investment to make into an area where they don't have expertise, when they could potentially utilize that capital towards upgrading their fleet instead.

It could also potentially trigger some antitrust interest from the government as well as I would expect that they would find entry of a new player onto that route more attractive than expansion by United.

[Houston19514]

Intesting point, but I'm not sure it would make financial sense for the airline. Operating a railroad and operating an airline would appear to require completely separate resources and skill sets. That would give Texas Central a distinct advantage because they're able to utilize the engineering, construction, and operational capabilities of their partner. It's also a pretty large capital investment to make into an area where they don't have expertise, when they could potentially utilize that capital towards upgrading their fleet instead.

It could also potentially trigger some antitrust interest from the government as well as I would expect that they would find entry of a new player onto that route more attractive than expansion by United.

 

Good point.  And given that United has shown few signs that they know how to operate an airline, the chances of their being able to efficiently run a railroad are minimal.   ;-)

 

[urban909]

Federal officials green-light Houston-Dallas train study

There's a lot of ground to cover before bullet trains carry riders between Houston and Dallas, but federal officials are poised to announce Wednesday that Texas and the private company planning the line have the go-ahead to begin environmental reviews.

Though a preliminary step, the notice to proceed expected to appear in the federal register Wednesday sets up a lengthy analysis on where a high-speed rail line would go between the two metro areas and what effect it would have on East Texas residents, plants and animals.

http://www.houstonchronicle.com/news/transportation/article/Federal-officials-green-light-Houston-Dallas-5576670.php

[BigFootsSocks]

http://www.houstonchronicle.com/news/transportation/article/Federal-officials-green-light-Houston-Dallas-5576670.php

This is pretty awesome to see coming together. With a construction date of 2016 that's not far away at all!

[Luminare]

I wonder which route they have chosen. The most sensible path would be up 290, 6, and 35. So the probably stops would be Houston, College Station/Bryan, Waco, and Dallas.

[arche_757]

While I'm certainly not connected to this project, I think the rail is only between Houston-Dallas.  I would doubt Aggieland and Baylor Town will have the ridership required to attract this train.  If this development works, I imagine they'll expand the nework with a line down I-35 from Dallas, and one west-east from Austin to Houston to New Orleans or so?

Edited June 25, 2014 by arche_757

[mfastx]

This would be the best thing to happen to the region in awhile.  It'd change everything.  I'm trying not to get my hopes up though, lol. 

[Slick Vik]

I wonder which route they have chosen. The most sensible path would be up 290, 6, and 35. So the probably stops would be Houston, College Station/Bryan, Waco, and Dallas.

No

[mollusk]

They're not going to have a route fully selected until after they get through the environmental impact evaluation process, which according to the fishwrapper is just now getting started.  However, everything I've read at least implies a fairly straight line, non stop run between Houston and Dallas - doing otherwise would nick into the 90 minute trip time goal that keeps getting bandied about.  Since they've also mentioned the idea of running their fully grade separated line adjacent to existing rights of way (rail, electric, and road), I'm guessing the BNSF route may be in play - it's a more direct route to Dallas than the UP has.

 

I can't help but wonder what they're going to do for a terminal here.  In Dallas, it's easy - Union Station is still in use.  However, we've got the downtown post office sitting where the SP station was, Union Station's railyard has a baseball field on it now, and the Katy station is long gone.  I can't imagine how the Amtrak station as it currently sits would be considered even remotely useable.  My speculation is they'd build something adjacent to the Burnett Red Line station - there's plenty of former rail yard there, and it's a short, uninterrupted run to either the BNSF right of way or the Hardy Toll Road extension.

[lithiumaneurysm]

The Downtown post office is up for sale, maybe they could work something out with whatever developer buys up that property.

[Slick Vik]

Post office or hardy rail yards would be great. Hardy rail yards would give connection to public transit also

[Naviguessor]

Here we go...

[BigFootsSocks]

I wonder which route they have chosen. The most sensible path would be up 290, 6, and 35. So the probably stops would be Houston, College Station/Bryan, Waco, and Dallas.

Except this is Houston to Dallas not Houston to College Station to Waco to Dallas. Why would they waste the money going to 

Waco and not put a stop in Austin? Oh because they're not and it's only Houston to Dallas.

[IronTiger]

A stop in more than two cities would certainly make more sense and probably drum up more business. Really, College Station makes a lot of sense if you're talking about future investment here. And no, it's not because I go to Texas A&M.

[BigFootsSocks]

A stop in more than two cities would certainly make more sense and probably drum up more business. Really, College Station makes a lot of sense if you're talking about future investment here. And no, it's not because I go to Texas A&M.

Future investment sure, but this is the initial phase. For future phases I doubt they would go with College Station or for whatever reason Waco before they hit San Antonio or Austin. There's more people there and it makes more sense.

[mollusk]

Sorry, Tige, but Waco and College Station are only likely to see passenger rail service by the modern equivalent of a local, just as their commercial air service is via puddle jumper.  Shoot, not even Amtrak stops in Waco - and nobody claims that the Texas Eagle is any sort of paragon of swift passage.

[BigFootsSocks]

Sorry, Tige, but Waco and College Station are only likely to see passenger rail service by the modern equivalent of a local, just as their commercial air service is via puddle jumper. Shoot, not even Amtrak stops in Waco - and nobody claims that the Texas Eagle is any sort of paragon of swift passage.

Exactly. Why the hell would they waste the money to stop in Waco? There's absolutely nothing there and would be a complete waste of money for Texas Central