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Amtrak's Northeast Corridor Long Term Trends

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And now for Amtrak’s Northeast Corridor!  The story is better than Amtrak Texas. In any case, it highlights the importance of looking at the numbers over time to detect trends.  These trends, by the way, can be used to predict the probability of continuance. Between 2009 and 2013 ridership on the Acela, which is the NEC’s primary operating profit offering, increased by 12.4 per cent, but the revenues went up by 30.2 per cent.  Looks like the riders were willing to pony up more scratch for a patrician class ride.  Costs dropped by $28.1 million or 11.4 per cent.  Some might claim that the drop was because Amtrak dumped some of the NEC costs on the long distance train, but there is no evidence to support this notion. Other Post Employment Benefit costs (OPEBS) dropped 60.8 per cent, and the core contribution increased by 297.5 per cent.  But the NEC financial performance was not just a function of the Acela trains. From 2011 on the NEC regional trains turned in positive numbers. During the period (2009 through 2013) ridership on the regional trains increased 16.2 per cent whilst revenues increased 32.1 per cent. Total costs excluding OPEBS dropped 2.6 per cent, but OPEBS increased 56.1 per cent. The NEC regional trains went from an operating loss of $34.8 million in 2009 to an operating profit of $133 million in 2013. The NEC Special Trains, which accounted for less than 1/10 of one per cent of NEC operations during the survey years, turned a loss of $1.6 million in 2009 into an operating profit of $2.9 million in 2013. In 2009 30.4 per cent of the NEC riders chose the Acela and 69.6 per cent opted for a NEC regional train.  By 2013 29.3 per cent of the NEC riders chose the Acela, whilst 70.6 per cent hopped aboard a regional train. Acela riders accounted for 48.4 per cent of revenues in 2009 and 47.9 per cent in 2013.  The corresponding revenue numbers for the regional trains were 51.5 and 51.7 per cent. The numbers don’t add to 100 per cent because the results for the special trains are not included.  They are less than 1/10 of one per cent for all variables. The NEC has been covering its operating costs since 2009. But what about the capital charges, which are an important element in the financial results?  I don’t know!  But I have submitted a Freedom of Information Act request to Amtrak’s IG for the information.  Hopefully, I will get a response.  I am prepared to pay for it. The NEC had a net operating profit of $934.9 million during the period surveyed. In FY13 it had an operating profit of $372.9 million compared to an operating loss of $180.8 million for the state supported and other short distance trains and a corresponding loss of $627.1 million for the long distance trains. This is what we know from Amtrak’s published numbers. Don Phillips, Fred Frailey, etc. have claimed directly or indirectly that Amtrak distorts its financial results because of inappropriate cost allocation formulas.  When challenged, however, none of them offered any solid evidence that Amtrak is materially misstating its financial results.  If it did, the external, independent auditors would issue a qualified opinion, based on deficient internal controls, which no one at Amtrak would want to see. If the NEC wears 80 per cent of Amtrak’s depreciation, which is just a guess, in FY13 it could have covered the NEC costs by increasing the NEC fares by an average of $18.10 per passenger.
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