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June 22, 2014

A Railroad That Turns Heads and Makes a Profit

Hardly a week goes by that someone doesn’t ask me… “Why doesn’t a private company take over Metro-North and run it properly?” 
The reason all US railroads got out of the passenger business is there was no profit to be made.  Even with the highest rail fares of any commuter railroad in the US, 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.
But earlier this summer I rode a profitable, privately owned passenger train.  It only runs 45 miles but commands $85 - $175 per ticket (round-trip)(.  It’s been running for over 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 3-4 steam power trains up the mountain to the tiny town of Silverton (with 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.  Damn, I would pay them to volunteer on this railroad!  And some folks do.
For $1000 (one-way), you can ride in the cab of their old steam locomotives wearing authentic overalls and cap and catch the bus or passenger coach back.  You can even help them shovel coal into the boiler.  

For $134 (round-trip) you can ride in the Deluxe Rio-Grande  open gondola car, or for a bit more, enjoy the 3 ½ 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. 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, ATV’s, camping and other activities.  And, importantly, they have the support of their community which recognizes how much this little railroad means to the economy.  In 2001it was calculated that the railroad brought $100 million a year to Durango in business… hotels, meals, 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!



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