Like the federal government, Amtrak works on a fiscal year ending September 30, and on its web site it recently posted its financial and operational results, which I’d like to share with you.
Top line. Revenues versus fiscal 2012 were up $115 million, or 4 percent. But expenses rose $143 million, although that was only a 3.5 percent increase. The loss on continuing operations, $1.2 billion, was $28 million greater than a year earlier. Nonoperational income and expenses were $39 million to the good versus 2012, so the real bottom line is $11 million better than last year.
Not much difference, right? So what were the noteworthy changes? Here are a few things I gleaned:
Advertising. Cut in fiscal 2012, largely to balance Amtrak’s budget, ad outlays rose $16 million in 2013.
Northeast Corridor. By itself, the Acela Express service accounted for one-fourth of Amtrak’s nationwide ticket revenue — quite a feat for a niche service. Throw in food service revenue, and the Acelas’ profit after deducting fully allocated costs (but not capital costs) became $237 million, a profit margin of 44 percent. Last’s year comparable number: $209 million. The Northeast Regional trains, grossing slight more than the Acelas, covered their fully allocated costs with $133 million left to contribute toward capital costs. Special trains in the NEC earned another $3 million above non-capital costs. I keep mentioning capital costs because it costs Amtrak in the vicinity of $375 million in capital just to maintain the NEC’s track, structures, signals, and rolling stock on a normalized basis. But there is a humongous backlog of unmet capital needs just to get the existing physical plant in a state of good repair (the price tag for 2009-2023 is $11 billion). And if you want newer and faster trains and straighter track, why, just add a zero to the $11 billion. So the corridor is not profitable by a long shot, but the Acela and Northeast Regional services do an impressive job of bringing in dollars, more every year.
State supported trains. The bottom line on these trains, all 750 or fewer miles in route length, barely budged. As a group they lost $181 million in 2013 versus $179 million in 2012, on fully allocated costs. The worst performers, measured by loss per passenger mile (after state subsidies) were the four-times-weekly Hoosier State between Chicago and Indianapolis (an incredible $1.42 loss per passenger mile); the New Haven-Springfield service (35 cents lost per passenger mile); Ethan Allen Express (27 cents), and Wolverines (25 cents). However, I believe the New Haven and Wolverine trains ran without state assistance, so there was no public contribution to cushion their bad numbers. Starting this fiscal year, states are required by Congress to support all of these trains (and pay a capital cost) by a methodology that is the same for each state. One estimate I’ve heard is that Amtrak’s losses on this group of trains will fall by about $80 million in fiscal 2014.
Long distance trains. These are the trains whose economics fascinate me, and perhaps many of you as well. Bad news: Their fully allocated losses, as a group, rose by $37 million, to $627 million. The reason is almost entirely rising costs. Now for the superlatives, good and bad. Biggest loss after fully allocated costs: Chicago-Oakland California Zephyr ($74 million). Smallest loss: New York-Savannah Palmetto ($15 million). Biggest loss per passenger mile: New Orleans-Los Angeles Sunset Limited (48 cents). Smallest loss: Lorton-to-Sanford Auto Train (14 cents). Biggest revenue producer: Auto Train ($75 million). Highest operating costs: Empire Builder ($130 million). Most riders: Empire Builder again (536,391). Most sleeping car passengers: Auto Train (111,456), Empire Builder (84,413), Los Angeles-Seattle Coast Starlight (74,217), and California Zephyr (72,472).
I don’t know what to make of the fact that capital spending on engineering projects, $521 million, mostly in the NEC, was $98 million less than budgeted. For instance, tunnel work was budgeted for $27 million but only $5 million was spent. Renewal of track and switches at interlockings, budgeted for $25 million, came to only $11 million. And on the mechanical side, $200 was budgeted for locomotive overhauls but only $154 was spent, I suspect because the entire AEM7 and HHP8 fleets of electric motors will be mothballed in the next year or two as Siemens delivers those 70 new Amtrak City Sprinters. Why overhaul what you're about to take out of service?
I suspect I’ve bored most of you to tears by now. But those hearty few who want to digest even more numbers should go here, then scroll down and tunder Monthly Performance Reports, click on the September 2013 MPR. Happy reading! — Fred W. Frailey
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