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Building momentum

10 years after launching Acela, Amtrak plans to corner the Boston-N.Y. travel market

Amtrak has been marketing high-speed Acela rail service aggressively as an alternative to flying to New York, and has bought ad space on a walkway at Logan Airport. Amtrak has been marketing high-speed Acela rail service aggressively as an alternative to flying to New York, and has bought ad space on a walkway at Logan Airport. (John Tlumacki/ Globe Staff)
By Katie Johnston Chase
Globe Staff / December 5, 2010

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In the decade since the first Acela Express high-speed train zipped out of South Station, Amtrak has captured more than half the air and rail market on the popular Boston-New York route, attracting travelers fed up with the hassle of flying. Now, the passenger rail company is aiming to grab them all.

As Acela marks its 10th anniversary this month, Amtrak is targeting airline passengers where they live — in airports and security lines. A larger-than-life banner promoting Acela now stretches above the three-lane roadway at Logan International Airport. A TV ad for the high-speed rail emphasizes “taking off your shoes only if you feel like it’’ — a reference to tightened airport security measures that recently some say have bordered on groping.

Meanwhile, Amtrak has its eye on the day when no new travelers will choose to fly from Boston to New York. In a report looking ahead to 2050, when 220-mile-per-hour train speeds are projected to cut the 3 1/2-hour trip to 83 minutes, Amtrak officials forecast that more than half the travel between the two cities will be by rail and there will be zero growth in the air travel market.

“We’ve designed a product for the business travelers’ needs, and we’re trying to reach them at the most relevant points of their travel experience,’’ said David Lim, Amtrak’s chief marketing officer. “The underlying assumption being the airport experience has not been the best in the last couple of years.’’

Acela was launched in late 2000 with the goal of grabbing a larger share of the lucrative business travel market from short-haul air routes between Boston, New York, Philadelphia, and Washington. By most measures, it has succeeded.

Amtrak now transports 55 percent of passengers in the Boston-New York air-rail market, up from 16 percent in the mid-1990s, according to the New England Transportation Institute, a nonprofit research organization in Vermont. Acela’s ridership has risen nearly 30 percent, from 2.5 million passengers in its first full year of service to 3.2 million passengers in fiscal 2010, which ended in September. Air travel, on the other hand, has declined.

Last year, nearly 30 percent fewer people flew between Logan and the three New York-area airports than in 1999, the year before Amtrak introduced Acela, according to the Bureau of Transportation Statistics. Air passenger numbers decreased 35 percent between Boston and Philadelphia and 8 percent between Boston and Washington in the same period.

Airlines acknowledge that they have fewer passengers on these routes but note that air travel is down in general because of the weak economy, not competition. “It’s no different than what we have seen in the rest of the system,’’ said Gail Grimmett, senior vice president at Delta Air Lines, which operates frequent shuttle flights between Boston, New York, and Washington.

But there’s no denying that flying has become a headache. Sandy Rederer, vice president of OAG Aviation Consulting Services in Washington, remembers when flying the shuttle was simple: no security, no ticket, no lines. Today, air travel means enhanced pat-downs, crowded planes, and delays, while Amtrak has improved its equipment, reliability, and speed.

“The train service has gotten better while the plane service has become less convenient,’’ said Rederer, who works with airlines but acknowledges he prefers the train.

Prices are comparable, with round-trip tickets between Boston and New York costing $200 to $300 on Acela and about $300 on the airlines — though airfare is considerably more for last-minute trips. And it takes more than twice as long to get between Boston and New York on the high-speed train.

But when you factor in driving to the airport, parking, and going through “humiliating security procedures,’’ said frequent traveler Gerald Fine, the train trumps the plane.

“It’s actually faster,’’ said Fine, chief executive of glass technologies company Schott North America Inc., who travels from Brookline to his office in Elmsford, N.Y., once a week, either on Acela or on US Airways. Fine can also use Acela’s free Wi-Fi — a service unavailable on US Airways shuttles — and he can always get a cup of coffee. On the plane, turbulence sometimes keeps flight attendants from serving his daily jolt of caffeine.

“If it’s 10:30 in the morning before I have coffee in my system, I’m pretty irritable,’’ he said.

Logan officials concede that at least a small percentage of Boston-New York airline passengers have defected to the train. But they attribute the decrease to changing travel patterns following the Sept. 11 terrorist attacks, as well as an increase in bus ridership. The Boston-New York bus route is fiercely competitive, sparking price wars between the seven carriers and a rush to provide amenities such as free Wi-Fi.

“We still have a healthy travel market to New York,’’ said Len King, capital program manager for the Massachusetts Port Authority, which runs Logan.

Massport officials admit the 12-by-115-foot Amtrak banner at Logan is a touchy subject with airlines, which pay hefty fees to the airport. But not taking the ad, which is scheduled to stay up through February, would mean the loss of about $24,000 a month.

“If we didn’t sell it to them, they might buy a billboard 500 yards down the road from the airport and advertise there, and we’d lose the revenue,’’ said Jack Hemphill, Massport’s business general manager.

Acela now accounts for about a quarter of Amtrak’s overall ticket revenues, which have risen about 30 percent to $1.7 billion since the introduction of high-speed rail service. This growth is impressive but not surprising, said Matthew Coogan, director of the New England Transportation Institute, noting the rate of passenger increase is comparable to growth in other countries after high speed trains were introduced.

It all boils down to healthy competition, Coogan said, which is a boon for consumers.

“I would hope that we’re going to see a stabilization, where Amtrak really knows it’s got to compete for your dollar, where those aviation companies know they have to compete for your dollar, and the bus industry knows they have to compete for your dollar,’’ he said. “And we seem to be seeing it. Who would have guessed you would get a good Wi-Fi connection on a Greyhound bus? But you do.’’

Globe correspondent Alexandria McMahon contributed to this report. Katie Johnston Chase can be reached at johnstonchase@globe.com.

Correction: Because of incomplete information supplied by Amtrak, the description of an Amtrak report on the future of high speed rail service between New York and Boston was incorrect in this story. The report predicted that by 2050, all new travelers on the route would choose rail over air, but that some people would still travel by air.