Amtrak’s Darkening Finances

[JPS1]

During the first quarter of FY21 Amtrak had an operating loss of $274.3 million compared to an operating profit of $66.4 million for the corresponding quarter of FY20.

 

Passenger related revenue was $221.4 million compared to $717.2 million in FY20, a decrease of 69.1%.  Total revenue was $373.4 million, down 57.6% from FY20’s total revenue of $881.2 million.

 

Total operating expense declined from $814.9 million to $647.8 million, a change of 20.5%.  Salaries, Wages & Benefits declined by $86.7 million or 16.7% followed by Train Operations at $21.8 million and 36.4%; Fuel, Power & Utilities at $19.8 million and 34.7%; and Materials at $11.8 million and 31.6%.  The biggest decrease percentage wise was in Marketing and Sales, which declined $16.8 million and 67.8%.

 

Operating income fell 513.3 % while net income fell 366.5%.  The company was not able to shed operating expenses at a rate sufficient to offset the steep decline in operating revenues. 

 

System ridership was off 78.9% compared to the first quarter of FY20.  Average operating losses per passenger mile were $1.10 for the NEC, $.14 for the state supported trains, and $.56 for the long-distance trains.  The average operating loss per rider was $186.57 for the NEC vs. $20.99 for the state supported services and $319 for the long-distance trains.   

[CMStPnP]

JPS1

During the first quarter of FY21 Amtrak had an operating loss of $274.3 million compared to an operating profit of $66.4 million for the corresponding quarter of FY20.   Passenger related revenue was $221.4 million compared to $717.2 million in FY20, a decrease of 69.1%.  Total revenue was $373.4 million, down 57.6% from FY20’s total revenue of $881.2 million.   Total operating expense declined from $814.9 million to $647.8 million, a change of 20.5%.  Salaries, Wages & Benefits declined by $86.7 million or 16.7% followed by Train Operations at $21.8 million and 36.4%; Fuel, Power & Utilities at $19.8 million and 34.7%; and Materials at $11.8 million and 31.6%.  The biggest decrease percentage wise was in Marketing and Sales, which declined $16.8 million and 67.8%.   Operating income fell 513.3 % while net income fell 366.5%.  The company was not able to shed operating expenses at a rate sufficient to offset the steep decline in operating revenues.    System ridership was off 78.9% compared to the first quarter of FY20.  Average operating losses per passenger mile were $1.10 for the NEC, $.14 for the state supported trains, and $.56 for the long-distance trains.  The average operating loss per rider was $186.57 for the NEC vs. $20.99 for the state supported services and $319 for the long-distance trains.   

It's not surprising to me.   Even in good times Amtrak management is slow to move on anything.    So it doesn't surprise me they had no real action plan to make up for lost revenue nor any real plan to cut deeply into expenses.      They could have used the down turn and streamlined the company more,  like say replacing the commissaries with a more efficient and cheaper option.   At least they made more progress on getting some of the large big city terminals to be financially self-sufficient or even turn a profit in the future.

No movement on replacing the LD fleet, they could have made a little progress on that issue with all the idle hands they had.

[MidlandMike]

I wonder how it compares to the airline industry this year?

[JPS1]

MidlandMike

 I wonder how it compares to the airline industry this year? 

Like all travel companies, 2020 was a bad year for the nation’s airlines.  But not nearly as bad as for the cruise lines. 

 

The fourth quarter 2020 highlights for the nation’s four largest commercial airlines reflect the serious downturn described extensively in the media.  Airline fourth quarter results are comparable to Amtrak’s first quarter results for its fiscal year, which runs from October 1^st to December 31st.  The line items for the airlines are slightly different than for Amtrak, but they show similar downward trends.

 

Southwest Airlines operating revenues declined 59.7% during the fourth quarter of 2020 compared to the same period in 2019.  Cost of goods sold declined 29.5% while G&A expenses dropped 36.4%.  Most of the company’s labor expense is included in these two line items.  Pre-tax income declined 243.9%. 

 

Delta Airlines quarterly revenues dropped 65.3%; cost of goods sold fell 37.2%; G&A decreased 41.5%; and pre-tax income fell off 179.3%. 

 

American Airlines revenues fell 64.4%; cost of goods sold dropped 35%; G&A was down 56.4%; and pre-tax income declined 591.9%. 

 

United Airlines saw its fourth quarter revenues plunge 68.7% compared to the same quarter in 2019; cost of goods sold was off 44.6%: G&A decreased 49.3%; and pre-tax income was down 381.3%.

[charlie hebdo]

CMStPnP

No movement on replacing the LD fleet, they could have made a little progress on that issue with all the idle hands they had.

 

Given Amtrak's previously declared views on LD services,  why should they invest in Superliner equipment? 

[CMStPnP]

charlie hebdo

Given Amtrak's previously declared views on LD services,  why should they invest in Superliner equipment? 

Yes, well low and behold you have the Amtrak 2035 proposal posted in the Passenger Forum with........wait for it.............Long Distance Trains included.    Because Amtrak knows Bidens position on the LD network and sees it has a good chance of landing money from Congress for it.    So management views notwithstanding.........they are reaching for the gold.    You'll note they plan to replace the Superliner equipment vs invest more in it.

Also, Amtraks views was never to get rid of all LD Trains or at a minium was not completely clear.    Going back to the former Delta Airlines guy, he stated off and on retaining possibly 3 or 4 routes but desired to pare down the LD network from it's current number to cut losses.........some of that seen in the 2035 map as some LD routes are shortened or partially turned into corridors.     Others it seems Amtrak switches routes (NYC-Buffalo) or creates new with projected state financing (KC-Fort Worth). 

[CMStPnP]

BTW, concerning the subject matter of this topic.   Do not underestimate the ability of the travel industry to flip from an undersold to an oversold condition in the matter of 6 months or less.    We have substantial pent up demand right now for the very vacation types that are hurting financially (cruises).    It's not a matter of IF but a matter of how soon and how sharp a rebound over time.   A lot of that depends on consumer sentiment concerning risk as to the pandemic.    Remove the risk and then your just in a waiting period of consumer sentiment springing back.     I also, think there is a small mountain of money on the side from a lot of families that have put into savings what has been saved from not having to drive the car as much (no commute to work).    Remember also personal savings rate right now is above what we have been normally averaging prior to pandemic.......that is not a bad thing as it will help to keep interest rates low for borrowing.

[runnerdude48]

From what I have read the airlines are not expecting a return to previous levels until at least 2024.  I doubt Amtrak would be much different.  This pandemic is not going away anytime soon.  The mutations will likely continue and there will be more surges and lock downs.  The money saved by not traveling now has been, and likely will continue to be, put into campers and motorhomes.  I know a guy in the RV industry and he says they can't keep up with the demand.  That may be the new way to vacation.  Carry it all with you.  And don't count too much on Biden.  He won't have as much support in Congress after the 2022 election and, he has said he will be a one term president.  If Harris is elected in 2024 she may have a totally different agenda than Sleepy Joe.