Speaking in Indiana last week, Secretary of Immobility Ray LaHood said Amtrak’s success shows that American should build high-speed rail. “Amtrak is doing very well,” claimed LaHood. “They’re making money, that wasn’t true a few years ago.”
This led BoydGroup, an aviation consulting firm, to say, “This guy is lost in space.” BoydGroup points out that Amtrak lost $1.4 billion in 2010, which is actually underreported because Amtrak counts state subsidies as “revenues.”
In fairness to LaHood, he may have been misquoted and was probably talking about the Boston-to-Washington Acela, not Amtrak as a whole. According to Amtrak’s September, 2010 ridership report (and September is the relevant one because Amtrak’s fiscal year ends in September), the Acela covered its operating costs in 2010 (see p. C-1). In fact, it earned $100 million more than its operating costs. This does not mean, however, that it made a profit.
First, under “Capital Charge” the ridership report lists only “n/a,” meaning not available. When these charges, including interest, are counted, the Acela would not appear nearly as profitable.
Second, unlike most proposed high-speed rail routes, the Acela shares most of its costs–track maintenance, stations, ticket agents–with slower speed trains which Amtrak calls “NE Regional Trains.” These lost money in 2010 and every other year. To run the Acela, these costs would have to be paid whether the slower trains are there or not, so it is hard to argue that the Acela really makes money: it covers its operating costs only because it shifts half of those costs onto other, money-losing trains.
So, even giving him the benefit of the doubt, Secretary LaHood is still lost in space.