Amtrak, America’s state-run passenger railroad company, faces a daunting dilemma. Its path to profit is to cut what its Congressional overlords seem unwilling to even consider eliminating.
I’m taking about long-distance rail service. Storied routes like the Empire Builder and Coast Starlight lose money. A lot of it. Every single year, without exception. All longhaul routes actually. And while Congress loves to berate Amtrak for losing money, when it comes time to cut loss-leading routes, suddenly these same members of Congress are up in arms.
Former Delta CEO Richard Anderson now heads Amtrak and wants to turn it into a profitable business. Currently, Amtrak’s only profitable sector is its busy service along the Northeast corridor. There, Anderson sees the model for what to do in other parts of the nation. To put the numbers into perspective, Amtrak lost $543 million on its longhaul routes 2018 while it earned $524 million from its Northeast Corridor operations.
As the aging longhaul passenger carriages near the end of their days, Amtrak has a strategic choice to make. Re-invest in money-losing routes or instead invest in a new generation of passenger cars that can more efficiently transport passengers on shorthaul routes. Amtrak estimates it will need as much as $3BN to replace its longhaul fleet.
The Shorthaul Plan
Rather than so many inefficient longhaul routes, Anderson wants Amtrak to run more frequent service on popular short- and mid-haul routes like between Atlanta and Charlotte or Cleveland and Cincinnati. Here, rail travel can realistically compete against flying and driving.
As the Wall Street Journal notes, Anderson told Congress:
The demand is clearly there for additional short-corridor service throughout the U.S., which includes both additional frequencies for existing routes and establishing new routes between city pairs. The present network simply does not fit the future.
But it does fit the perceived needs of many members of Congress. Amtrak faces a counteractive pull from its Congressional overlords: stop losing money, but don’t touch our loss-leading longhaul routes. See, Amtrak’s long-distance trains run through many Congressional districts. You think Members of Congress from rural districts are going to stand idly by while Amtrak threatens to cancel its link to their district?
Last month’s Congressional spending bill included language encouraging Amtrak to preserve long-distance routes. Congress was also not keen on Anderson’s proposal to reduce seat pitch in order to squeeze in more seats. The Senate also blocked an attempt by Amtrak to turn sections of its Southwest Chief service from Chicago to Los Angeles from train to bus. The vote was 95-4…
I happen to think that in 2019 the notion of transcontinental train service is antiquated and unnecessary. As much as I enjoy traveling on Amtrak, it is not where I want to direct my tax dollars. But Members of Congress seem to disagree and they are the ones who pull the purse strings. Maybe its time for Congress simply to be honest. If Amtrak is treated like a public necessity rather than a whipping boy, then the public will have to deal with perennial losses. The Postal Service may lose a lot of money, but it is a constitutional requirement (Article I, Section 8). If Congress feels that Amtrak’s role is to indeed serve the entire country by train, then it should realize that Amtrak will (likely) always lose money…
What do you think about the future of Amtrak?