Version III - This Was The Week That Was

May 25, 2001

It’s Friday again, and time to wrap up the adventures and misadventures of Amtrak for another week.

Internally, the company continued on as before, with few new revelations or upheavals. Things did not necessarily improve, but they didn’t get any worse, either.

1. This week we saw some first numbers from Acela ridership north of New York Penn, and they aren’t pretty. Ridership is running as low as less than 20% per departure. On segments south of New York Penn, ridership is still running at low numbers, too, many times below 40%. Since the trainsets already deployed are in the most desirable time periods for business travel usage, it’s not likely that the remaining trainsets that will be coming in the less desirable time slot departures will markedly increase business or load factors.

   The most important part is that indications are that Acela is failing to draw air shuttle passengers to the rails. Instead, former Metroliner passengers are making the switch to Acela, which only lowers Metroliner load factors.

2. Amtrak President George Warrington gave a speech on Thursday to the National Press Club in Washington. As reported by the Associated Press and Reuters news services, his speech indicated that Amtrak is unable to serve two masters, that of a social service providing rail transportation at costs higher than income, and that of a passenger rail company seeking to operate at a profit.

   Everyone has always agreed that in the last few years, Amtrak’s public relations machine is one of the best corporate PR mills in the country. The combined message that Amtrak is on a “glide path to self sufficiency in 2003″ and that “Acela will net the company $180 million in annual profits” has been believed as the truth by most Amtrak watchers and many in government, excluding the GAO and certain Senate committees.

   Mr. Warrington’s speech on Thursday seems to be the latest attempt at Amtrak public relations efforts to spread a new message, that Amtrak will not meet self-sufficiency in 2003. This brilliant and subtle beginning of a new message has not been digested by many in the media and government; it will take a few more weeks and other messages to make the change from “self-sufficiency” to “help!” to be effective.

3. The sudden change of leadership in the United States Senate has many Amtrak supporters drooling at the possibility of new monies and new support flowing to Amtrak because of the replacement of Senator John McCain by Senator Fritz Hollings as chairman of the Commerce committee.

   Senator Hollings has been a longtime supporter or Amtrak, whereas Senator McCain has looked at Amtrak skeptically and as a target for eliminating what he felt was government waste.

   While Senator Hollings, an elderly and courtly gentleman from South Carolina, may think more kindly of Amtrak, this does not mean that Senator McCain will either go away or be less vocal as a skeptic of Amtrak.

   The makeup of the Senate has not changed. The same 100 senators are in place, and voting patterns are not likely to change. The only changes regarding Amtrak are likely to be that the Senate will not reduce any amounts of appropriations coming Amtrak’s way that the Bush Administration or the House of Representatives deems appropriate. It’s also not likely that any substantially higher amounts of appropriations the Senate passes will be automatically rubber stamped by the administration or House.

   In the current budget as proposed, Amtrak is receiving nearly all of the money the administration proposed, less the amounts from the Highway Trust Funds that the Clinton Administration proposed, but knew in advance would be heavily opposed by the highway and trucking lobbies. The original appropriation for Amtrak, outside of the trust fund monies, was $591 million, and Amtrak received $521 million, a slight difference in terms of Washington. In fact, the past few years, Amtrak has received very close to all amounts that has been proposed for it by the White House OMB. This will probably not change.

   The Democratically controlled Senate is only one third of a three ring circus, and the other two rings will continue to be controlled by Republicans. While the Democrats can make a proposed agenda, it’s unlikely their agenda will be well-received by the House or administration. In the reverse, White House and House proposals will have to be muscled through the Senate. Unless proposals are obstructed by the failure of Democratic Senate leaders to allow them to be brought up for a vote, most proposals are likely to be only moderately changed and passed.

   Many have thought that the HSRIA will be a breeze now that the Democrats control the Senate. That is unlikely for the same reasons that the Republicans control the House and White House. Until this horribly flawed bill is modified to place better controls on who administers the funds, it should not be passed at all. It has a great potential to become a colossal slush fund to be administered by Amtrak senior management.

That concludes another week in the life and times of Amtrak. The good news is that the trains are still rolling (with the exception of the occasional Acela trainset that keeps breaking down enroute). The bad news is that we still haven’t come into the peak of the summer season where expenses are the highest, and Amtrak is still suffering from a severe and potentially crippling cash shortage.

Bruce Richardson
Jacksonville, Florida

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