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A possible new direction for Amtrak Long Distance

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I used data from the IG's report to make two key points. Outsourcing the sleeping and dinning car services would still leave Amtrak's long distance trains with a substantial operating loss. Equally important, given the then subsidies required for sleeping car passengers vs. coach passengers, it is difficult to see how a private operator could cover the costs and earn a return on its invested capital, which would be the only motivate for someone to take over the sleeping and dinning cars on Amtrak's long distance trains. Admittedly, the subsidy ratios may have changed between 2004 and today, but I suspect that the subsidies for sleeping car passengers are still greater than the subsidy for coach passengers. I did not see any mention in the report of trackage rights. I ran a search on freight, foreign, rents, tariffs, trackage, trackage rights, and rights. The only hit I got was on rights, which was a reference to labor's bargaining rights. Without access to the IG's work papers, it would be difficult to determine whether the analysis team made any serious method and application errors. As is the case with any cost study, some assumptions have to be made, and they are subject to challenge.   I noted that one of the recommendations was to eliminate checked baggage.   Whether any of the hoist railroads would object to only one engine pulling three or four coaches has not been borne out by results at least on some routes. The Texas Eagle, City of New Orleans, and Pennsylvanian, which have more than three cars, as examples, only have one engine. They are hoisted by three different railroads. The DOT IG's investigation was an external review of Amtrak's long distance train operations. Most of the team members appear to have come from outside of Amtrak's IG office and, therefore, helped ensure the  independence of the analysis. They didn't have a dog in the hunt. NARP is an advocacy group. It slants most data to support the views of its members. As far I could determine when I belonged to it, NARP did not have a creditable accountant or financial analyst on its staff. In fact, the staff people with whom I spoke appeared to be rookies out of college for just a few years.  NARP's webpage had several errors regarding airline subsidies, which I brought to the attention of management. I did not get a response. Here are two examples. NARP claimed that the commercial airlines were the sole beneficiaries of the monies transferred from the general fund to the Aviation Trust Fund. Not true!  First, air traffic control operations is covered by an earmark fund, which means that most of its costs are covered by revenues.  Second, the commercial airlines make up approximately 30 to 35 per cent of the FAA's control activities. Not 100 per cent as implied by NARP. Most of the transfer goes to airport improvements, aviation safety, etc.  The commercial carriers benefit from these investments, but they are not the sole beneficiaries.  This information can be found in a variety of FAA documents. NARP claimed that the legacy airlines that had filed for bankruptcy had their pension plans bailed out by the Pension Benefit Guarantee Corporation (PBGC). This is true. What they didn't acknowledge is the PBGC is an insurance company owned by the United States. The carriers had paid premiums for the coverage; they were simply cashing in on the policy.  In this sense they were no different than any other company that had declared bankruptcy whilst being covered by PBGC. Based on my more than 22 years of audit and investigation experience, If people don't like the overall message of an audit and investigation report, they look for any reason under the sun to discredit it. If they find an error, they generalize it to the whole report. See, they say, the auditors or investigators did not know what they were doing. It is akin to finding an error on Page 225 of your automobile owners manual and assuming that everything in the manual is incorrect.
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