Version XVII – This Was The Week That Was

August 31, 2001

Welcome to the end of the final week of the traditional Summer season. We know Fall must be approaching here in Northeast Florida because the daily high temperatures are now down to a less stifling low 90s. And, who said you had to live in Arizona to bake in the sun?

1. Moving from baking to cooking, the Amtrak Board of Directors this week made a monumental decision to take the initial steps of following the recent recommendation of the Amtrak Reform Council and splitting the company into two pieces, one for the operation of trains, and one for what is described as a capital programs department for maintenance of assets and the acquisition of new rolling stock.

   What this does is split the infrastructure of the NEC away from the company’s operating responsibilities, a move that has long been agitated for by many Amtrak observers. The interesting part will be to see how the books will be separated, and how much “cooking of the books” actually has taken place by current and former Amtrak administrations in order to help the bottom line of the beleaguered NEC. No word yet on prospective officers of the split entities. This split is a good thing; certainly a move in the right direction for the overall survival of passenger rail in this country.

   Figures reported by Bloomberg News also noted that Amtrak lost about $21 on each of its 22.5 million passengers, or about $472.5 million in fiscal year 2000 (Note that fiscal year 2001 will be over in 30 days, so these figures are a year old). Higher losses are forecast for FY 2001 because of the failure of the Acela program to lure new passengers away from airline shuttles and off of I-95 instead of just moving them over from disappearing Metroliner trains.

   Speaking of Metroliners, for the past couple of years Amtrak has lovingly referred to Metroliners are the only product line which makes money, leaving every other service in the dust, including Acela. So, just so your humble correspondent understands correctly, Amtrak is taking the ONLY product line which it claims makes money, and is discontinuing that product line so its passengers can be force-transferred to new Acela service which has constant service disruptions, late arrivals, and much higher prices?

   Some analysts are predicting that by the time Amtrak discontinues Metroliners and NE Direct trains in favor of Acela Express, Acela Regional, and Acela Commuter trains that the company will experience a net loss of passengers because of higher fares and not appreciably noticeable improvements of service levels. We’re all breathlessly waiting to see.

2. The Washington Post, home of noted transportation writer Don Phillips (who also is a respected and regular contributor to Trains Magazine) has taken yet another swipe at Amtrak, this time in it’s Washington Merry Go Round column. The Washington Merry Go Round column is even older than Metroliner service, and considered a “must read” by many Post subscribers.

   Today’s (Friday, August 30th) column asks some penetrating questions about load factors, yield management, and basic business planning skills of Amtrak senior management and the NEC consists.

   It’s interesting to note that many national publications, of which Amtrak had previously counted on to be partisan cheerleaders, are now openly questioning Amtrak decisions.

   Many believe the various and sundry publications are just beginning to pick up on and reflect popular opinion and a general discontent with the constant downward slide of Amtrak under it’s current management’s stewardship.

3. A gracious correspondent of this space noted on the A-A list today that Amtrak has chosen to start advertising on the radio again in Phoenix, Arizona, which is home to no Amtrak trains.

   Phoenix, which used to host the Sunset Limited three times a week in each direction, was denied direct train service several years ago when the Southern Pacific (later the Union Pacific after the SP was swallowed whole by the Armour Yellow Giant) asked Amtrak to pony up in excess of $20 million to upgrade the secondary main line which served Phoenix.

   Amtrak, broke as ever, declined to contribute to this worthy cause, and the Phoenix cutoff was taken out of service. Now, Phoenix Amtrak passengers embark on their rail journeys by taking a luxury motor coach to nearby Tucson, just a short 119 miles across the desert.

   The new radio ads highlight the ever-encompassing 30% off sale that Amtrak has been using for months now. Noted our gracious correspondent, “Maybe they can even double ridership on the Phoenix-Tucson bus! (From one, to two.) (Sigh).” Indeed, with the potential to DOUBLE ridership, Phoenix has the potential to be the next Acela test ground for new service.

4. Amtrak itself issued a press release on August 22nd, titled “Increase Your Chances To See America; Amtrak guests can enjoy a 30 percent discount this fall”.

   The press release repeats the usual marketing platitudes, and then goes on to make the following statement: “‘As fall approaches, Amtrak is on target to, once again, set all-time records in ridership and revenue,’ said Barbara J. Richardson [no relation to your humble correspondent], Amtrak’s executive vice president. ‘Despite the current downtrends in the travel industry, we enjoyed our best month in 22 years in ridership and our best month in ticket revenue ever.’

   “In July just over 2.1 million guests traveled on Amtrak, generating over $110 million in revenue. For the fiscal year, ridership has topped 19.6 million, an increase of 5.3 percent over the same period last year, and revenue, at $984 million, is a strong 8.9 percent over last year.”

   Does anyone else reading this space care about the sin of omission? Here, yet, again, a senior Amtrak official is telling only half of the story, and misleading the public and government officials about the true picture of Amtrak. Yes, every statement said may be true, but, what about the other side of the ledger? What about expenses? What about productivity? What about costs of doing business? These figures are always kept away from us, the unwashed masses, because Amtrak senior management doesn’t want us to know what horrid shape Amtrak is in financially.

   They constantly believe that with this continual line of pabulum that we will all think they are doing a wonderful job and passenger rail is growing by leaps and bounds.

   All those who are tired of being misled, lied to, and believe Amtrak senior management, and by indirect action, the Amtrak Board of Directors is tearing Amtrak asunder, raise your hands. Then, write your congressman and demand both accountability and better use of YOUR government resources.

   All of those who live West of Harrisburg, Pennsylvania deserve the same level of passenger rail service as those living in Washington, Wilmington, Philadelphia, or New York. You work just as hard for your money and pay your taxes to Washington. Why can’t you be treated the same way citizens of the Northeast are treated? Why will Amtrak senior management not make policy decisions that are as good for you as they are for the denizens of New Jersey Transit?

   Inquiring minds want to know.

5. During the past three weeks, several reports have appeared in this space about train service changes, mostly in the East (but not Northeast). This week, yet again, another round of these changes made the circuit. While your humble correspondent has dutifully posted the changes here for your edification, amusement, and tacit approval, one cannot help but wonder if any changes will really be made. Time is short before the next timetable is due to be printed.
6. This weekend is the time again when we take a day and celebrate Labor Day, a day designed to honor the workers of America who are the backbone, heart, and muscle of our country and economy.

   We are particularly grateful for the organized labor employees of Amtrak. These fine people stay on the job as corporate presidents come and go, and Amtrak’s fortunes go up and down.

   They work harder and longer than most of their counterparts in the freight railroad industry, and indeed, have to put up with real, time sensitive, whining and complaining passengers instead of stoic freight. They make the trains run everyday, whether it’s in the middle of the night or noon. They work on all holidays, including Christmas Day, and work weekends, too. Many with low seniority will go years without a holiday off to be with their families. Astonishingly, they often work for lower wages than their counterparts at the freight railroads while they perform the same functions.

   We appreciate all they do for us who ride the trains. We appreciate all they do for our country. And, we appreciate the fact that they do all of this under less than ideal conditions.

   These are the American heroes, just like the policemen, firemen, physicians, and military personnel. They make things work.

   Without them, Amtrak wouldn’t exist.

That’s it for the final week of the traditional Summer. As business and industry wakes up from its Summer slumber next week, it will be interesting to see Amtrak’s plan for the final 30 days of the fiscal year.

Many creditors are just hoping they are going to receive their checks.

Bruce Richardson
Jacksonville, Florida