Version VI - This Was The Week That Was

June 15, 2001

Another Friday, another interesting week for Amtrak.

First though, some internal URPA information from Andy Selden about the Surface Transportation Board’s new rules regarding railroad mergers:

“URPA can be proud of its accomplishment in influencing the Surface Transportation Board to modify its proposed rail carrier merger regulations to require rail carriers to evaluate the impact of future mergers and acquisitions on passenger services. Specifically, the new final regulation [at Section 1180. 10(b)] requires parties to transactions involving the “Big 4″ to “…describe definitively how they would … fulfill existing performance agreements for [passenger] services.” The final regulation does NOT go as far as we advocated in requiring an assessment of impacts on proposed FUTURE rail services, but what we have in the final rule goes MUCH further than the proposed regulations did in forcing consideration of impacts, and mitigation of impacts, on existing services.

URPA’s submission is accurately summarized at page 210 of the STB’s record.

No other rail passenger research or advocacy organization participated in the STB’s rule making.”

Mr. Selden provided both written and oral testimony in Washington on behalf of URPA earlier this year when the STB was considering the changes.

Now, on to other issues:

1. Amtrak is continuing to run Friday ads in newspapers to drum up business in what appears to be a weak travel market. The same half page ad, which has run on several prior occasions, has been trimmed by 1/6th to a five column ad, half a page deep, from a six column ad of the same depth. This does not diminish the impact of the ad, but it does save considerable dollars by surrendering the extra column width. Regrettably, the ad is no stronger than previous ads, where very few graphics are employed, and you have to search the ad to determine if it’s a 30% discount on ladies’ shoes or train travel. The sale has been extended to August 24th, the end of the summer travel season.

   Other reports by travel agents (as previously told on the All-Aboard list) indicate sleeping car bookings are extremely soft on routes normally sold out weeks in advance for summer travel.

   No bookings = no tickets = no income = no cash for Amtrak, which is reportedly more cash starved than ever.

2. Speaking of a lack of cash, more than two sources have reported that the pawn shop that agreed to hock New York’s Penn Station has said “no.” Several problems have arisen in the past week regarding the mortgage on the station, including the refusal of American banks to write the mortgage. Reportedly, French banks will bail out America’s passenger rail system. Interest rates bandied around are in double digits, soaring high above the prime rate.

   Senator Chuck Shumer of New York is still reportedly unhappy about the deal, for fear if Amtrak defaults, it will have a trickle down effect on other station tenants, specifically New Jersey Transit and the Lone Island Rail Road.

3. Other sources are saying that since the public statements of Amtrak and US DOT about Amtrak reaching self-sufficiency in FY 2003 are not in agreement, that there is unhappiness from above that not everyone is speaking the party line. The word is that the head of DOT doesn’t like those under him to be in disagreement with what he says.
4. Further talking about discounts, the Acela weekend frequencies have been put on sale this week. The buy one, get one free promotion is designed to expose more potential riders to the joys of Acela in hopes they will come back for more at standard rates during the business day. This type of promotion, which costs very little when the trains are already running nearly empty on the weekends, at least brings in some cash to pay the overhead.
5. No formal announcement is likely to be made, but Amtrak Intercity is undergoing a 15% reduction in management related positions. The definition of “management” includes any “assistants” (as opposed to unionized secretaries and clerks) or others that do not fill previously defined union jobs. No criteria has been announced for the cuts, so your favorite manager or management contact could disappear into the mist quite quickly and without warning.

   While this move will no doubt he hailed by union members as a good step in the right direction (and, for that matter, by many outsiders as well), in many instances throughout Intercity, Amtrak front line management is scarce on local levels. Keep in mind the new product line supervisors ARE NOT management, they are still union members, with VERY limited authority.

6. The suspension of the Vermonter service has raised many eyebrows, mostly because RailAmerica is the owner of the New England Central Railroad. RailAmerica, which bought the former Rail Tex and acquired NECR in the deal, is the largest short line railroad owner in North America. Headquartered in Boca Raton, Florida, they have an outstanding record of short line railroad management and deep, deep pockets. For them to allow the NECR to deteriorate to such a point where rail service has to be suspended says that there is much more untold information in this story.
7. Right here in Jacksonville, Florida on Monday morning, June 18th, Amtrak will run a special train from Jacksonville to South Florida over the Florida East Coast Railroad. The train, which is designed to bolster local support for raising the necessary $40 million or so needed to upgrade the FEC to host new Florida service, was put together at the last minute. Many local dignitaries along the route have been invited to be aboard, including URPA Chairman Austin Coates. Your humble correspondent, however, appears to have had his invitation lost in the mail, or perhaps delivered in error to someone else.

   The train will depart the Jacksonville Amtrak station at 7:45 a.m., and turn onto FEC tracks in downtown Jacksonville, passing directly next to Jacksonville’s Prime Osborn Convention Center, which began life as Jacksonville Union Terminal in 1912. The Osborn Convention Center (named after the late president of the Seaboard Coast Line Railroad) is slated to be returned to service as an inter modal Amtrak station before 2005. The original head house of the station was beautifully and lovingly restored into convention meeting room space and offices, and the old stub end track area was turned into the new building housing the actual main convention center facilities. To reaccommodate the Amtrak and bus stations (plus a downtown location for transfer by motor coach to Jacksonville International Airport), the new part of the convention center will be expanded, replacing the square footage in the head house to be turned back into a passenger station. Four run-through tracks will be put back where they originally were, dating from 1912. Naturally, an environmental impact statement had to be put together to determine if it was environmentally feasible for a train station to be put where one was before for a full century.

8. A persistent rumor that won’t go away involves the cutting of a premier north-south long distance train on the left hand coast, which, reportedly, would save tens of millions of dollars in expenses if it was cut. Hopefully, in the internal discussion that is going on, someone will discover that the saving of this money will be horribly offset by the loss of current income and connectability with four other western long distance trains.

   While we all applaud Amtrak management for discussing every possible option to help the company through its present reduced status, one can only hope that revenue hawks will win the war against expense doves. This is the same war that was fought over the Intercity dining cars and coach attendants. Current Intercity senior management, which gained its management experience as managers of the NEC, seems determined to turn the Intercity operation into a clone of the NEC.

That’s another fascinating week in the life of Amtrak as we know it. Many insiders are saying stay tuned for the next month or so, things are going to get even more interesting than the are now.

We’ll all keep our heart medicine handy.

Bruce Richardson
Jacksonville, Florida