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Amtrak Breaks Even in 2022
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<p>In your dreams! Maybe not!</p> <p>Absent the long distance trains, Amtrak could cover its operating costs on the NEC and short distance corridor (corridor) trains by raising its average remaining system ticket prices 60 cents. However, if the price adjustment were restricted to the corridor trains, the average increase would be $13.20. To cover its operating and capital costs, Amtrak would have to raise its average system fares $24.25. Raising ticket prices; however, it is not the only option. </p> <p>Amtrak or a replacement organization(s) could reduce costs and mitigate any ticket price increases by making these changes.</p> <ul> <li>Reorganize Amtrak or replacement so that its role is restricted to coordinating intercity passenger rail services, managing contractors, and providing technical advisory services</li> </ul> <ul> <li>Sell Amtrak’s capital assets to a third party with a high tax shield and leaseback space, right-of-way access and equipment. </li> </ul> <ul> <li>Outsource operating and maintenance by route to lowest effective cost supplier for five years, with automatic renewal for another five years if performance standards are met. </li> </ul> <ul> <li>Outsource back office operations, i.e. reservations and ticketing, payroll, benefits, accounting, finance, IT, purchasing, public relations, etc.</li> </ul> <ul> <li>Offer coach and business class only with Wi-Fi, TV, movies, etc. at each seat. Passengers cover the cost of TV, movies, etc.</li> </ul> <ul> <li>Outsource food service to lowest effective cost supplier. Passengers pay full cost of food service. </li> </ul> <ul> <li>Sell 80 per cent of tickets on-line. Charge a fee for those who buy from reservations clerk.</li> </ul> <ul> <li>Ring fence stations so that only ticketed passengers can access platforms via a ticket verification system similar to BART. Minimize station facilities and personnel. </li> </ul> <ul> <li>Configure trains to be operated by two people, i.e. engineer and conductor, similar to BART. Install cameras, voice interfaces, etc. to respond to passenger information needs. </li> </ul> <ul> <li>Dropping the long distance trains could save more than $500 million per year. Keeping them means breaking even is a nonstarter. </li> </ul> <p style="padding:0;margin:0;"></p> <ul> <li>Use stranded equipment to expand existing corridors or develop new ones, i.e. Charlotte to Atlanta, Oklahoma City to San Antonio, Houston to San Antonio, etc. </li> </ul> <p>With modern organizational and management practices, Amtrak could breakeven; it might even turn a profit. But it would take a major mindset change! The biggest barriers to change would be politicians and Amtrak’s careerists. </p> <p> </p>
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