For better than a decade now, California has been trying to bring back the old Coast Daylight as an extension of the current Surfliner from San Luis Obispo to San Francisco (via Oakland or Emeryville). This would provide convenient one-seat day travel between Los Angeles and the Bay Area, which is currently not satisfied by either the Coast Starlight (arriving as it does, at 10pm or later if behind schedule) or the bus connection between Los Angeles and the San Joaquins at Bakersfield.
The current schedule anticipation is for departing/arriving at ~7:30am/pm. With only a three hour gap in departure times from Los Angeles, the number of coach passengers will be fairly minimal, resulting in higher losses on the route, as the vast majority of current California intrastate defects to the cheaper and more convenient option. With a cost recovery of only 49% (page 14), any revenue loss puts it in rather poor territory and more at risk for cutting of the route. This raises the question of how to prevent a reduction of cost recovery, and ideally improve it, for which I see three possible solutions.
The first, and worst, is to simply truncate the route at Emeryville using the Daylight as a connection to Los Angeles. This avoids the expenses inherent to a poorly patronized train service, but also cuts most current connections (retaining only the connection with the thrice weekly Sunset Limited) and loses the added revenue of sleeper car patrons and and likely the loss of some ridership that extends beyond Emeryville and does not wish to make a transfer.
The second solution would be to attach some sleepers to the Coast Daylight and switch the cars in Emeryville onto a truncated Starlight, as is done currently in San Antonio between the Sunset Limited and Texas Eagle. This does retain most of the business and ridership, but would require a degree of schedule realignment on the southbound leg in order to connect with a departing Daylight.
The third solution, and in my opinion the best, is to reschedule the entire Starlight so that it runs overnight between Los Angeles and San Francisco as a true double frequency of the Daylight. Not only does this reduce "passenger poaching"but it also opens the train to a new market of those who are open to traveling to San Francisco or Los Angeles by rail, but do not wish to spend the entire day doing so. Importantly from a cost recovery perspective, members of this market may be more willing to pay extra for base fares and more likely to upgrade to sleepers which can greatly increase revenue (even a roomette will increase revenue by 50% if shared and double or treble it if occupied by only a single person).
If the latter is true, and Amtrak is able to capitalize with additional sleepers based on demand (certainly a possibility if they join the mass railcar order California and the Midwest states are putting together), the results could very well be greatly beneficial for overall route performance and Amtrak's bottom line. Positing a northbound 8.5-10.5 hour schedule pushback, for a Los Angeles departure between 7-9pm results in the following arrival times: San Jose 5-7am, Emeryville 6-8am, Sacramento 8:30-10:30am, Klamath Falls 5-7pm, Eugene (terminus of Cascades) 9:15-11:15pm, Portland 11:20pm-1:20am, Seattle 6-8am.
Heading south, for an arrival of 7-9am arrival time in Los Angeles, the schedule would need to be adjusted by 10-12 hours, leading to the following departures: Seattle 7:45-9:45pm, Portland 12:30am-2:30am, Eugene 3:10-5:10am, Klamath Falls 8-10am, Sacramento 4:30-6:30pm, Emeryville 6:30-8:30pm, San Jose 8-10pm.
Under such a schedule, the current connections to the Empire Builder at Seattle and Portland are broken, but a connection is made with both the arriving and departing California Zephyr adding Denver and Salt Lake City to the list of destinations easily accessible from Southern California solely by rail without significant loss. The connection with the Sunset Limited is also broken with the Starlight, but is replaced by the Daylight, which should result in no significant change.
Portland does not fair well with the midnight trains compared to its current scheduling, however increased Cascade service should fill in the gap for what is, in any event, an off-peak travel time train. Any losses with Portland, however, should be more than made up for by the fact that the entirety of California, from Dunsmuir to San Diego, now lies within reasonable travel hours, with hopefully an increase in travel numbers.
Since this would be at the behest of the state of California, if Amtrak should prove reluctant to change the schedule for fear of greater drops in revenue than remaining on the current schedule with the Daylight added, it would be appropriate for California to pick up the tab, since the schedule change would mostly be to California's benefit and 55% of the route lies within California. This would most likely take the form of crediting increased revenue originating or ending in California against revenue losses, with the state making up any remainder.