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Amtrak May Ditch Long Hauls

Sat Feb 02, 2002 12:44 pm

WASHINGTON (Reuters) - Amtrak abandoned hope on Friday of meeting a deadline to wean itself from federal subsidies, and announced a $285 million austerity plan that included job cuts and a threat to discontinue its money losing long-distance routes by October.

While Amtrak said there would be no service disruptions through September, the national passenger railroad said it would do away with all of its cash-poor long haul routes after that if Congress did not approve a plan for $1.2 billion in operating and capital assistance it proposed for next year.

Route cuts likely would be seen on overnight trains that ply the Midwest and West. Amtrak's profitable and heavily traveled corridor services along the West Coast and the Northeast, where ridership is strong and its high-speed investment heavy, would not be targeted.

``Everyone knows you cannot make a profit while running a network of unprofitable trains,'' Amtrak President George Warrington told reporters at a news conference. ``That is exactly what we are expected to do.''

Any move to reduce service would draw criticism from lawmakers, who value and protect Amtrak jobs and intercity rail service in their districts.

But Warrington said Amtrak has to operate within its budget and ``can not be all things to all people'' without additional government funding.

Amtrak, which also said it would cut 4 percent of its workforce or 1,000 jobs, is the focus of a restructuring drive led by a committee created by Congress to oversee its finances.


The Amtrak Reform Council is expected to submit an operating plan to Congress next week that includes a proposal to let private companies bid on Amtrak routes.

A number of firms have expressed interest in Amtrak's profitable Northeast Corridor line, its commuter businesses and cargo and mail hauling contracts.

Amtrak's admission that it would not meet a congressionally mandated deadline to operate without federal subsidies by the end of the year was unexpected but consistent with the reform council's finding in November.

The conclusion also was affirmed in late January by the Transportation Department, which said Amtrak's operating loss was $1.1 billion last fiscal year. That was $129 million more than the previous year.

The government said the railroad's cash losses, a more reliable measure for determining how close Amtrak is to meeting its goal of self-sufficiency, were $585 million. Amtrak must reduce its cash losses by more than $300 million to meet its self-sufficiency deadline.

Warrington said the self-sufficiency deadline was an ''impractical, inappropriate and destructive concept to move forward with.''

Amtrak system broke down its latest austerity plan by saying it would defer $175 million in capital spending, and reduce operating costs by $110 million.

The job cuts would come from union and non-union ranks. The railroad employs 24,600 people.

Amtrak said the spending and job cuts were necessary to counter a shortfall in revenue due to the recession, security costs undertaken after Sept. 11, and the loss of $52 million in financing related to the reform council's decision on self-sufficiency and restructuring.

At Eastern, we earn our wings every day!
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RE: Amtrak May Ditch Long Hauls

Sat Feb 02, 2002 4:35 pm

yeah it makes sense their long haul routes are losing money. a ticket from Chicago to Los Angeles costs almost the same price as an airline ticket, except it takes 3 days instead of 3 hours.

life wasn't worth the balance, or the crumpled paper it was written on

RE: Amtrak May Ditch Long Hauls

Sat Feb 02, 2002 4:41 pm

But trains are better than planes. and it is more like a day and a half! and you get to see the country!
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RE: Amtrak May Ditch Long Hauls

Sat Feb 02, 2002 6:29 pm

It's a good decision.
Let pax to fly on longer distance to cheaper fares and to save time.
Amtrack has to focus on profitable market like Washington-NYC-Boston for example. On this route with high-speed train they could be very competitive with the plane.
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RE: Amtrak May Ditch Long Hauls

Sun Feb 03, 2002 2:01 am

The article says it all. Do you want it to be a profitable enterprise or do you want it to provide a service to all areas.

Clearly it can't be both.

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