Amtrak’s Money-Losing Vision

Amtrak responded to Biden’s “American Jobs Plan,” which would give Amtrak $80 billion (presumably over several years), with a “vision to grow rail service and connect new city pairs across America.” As shown in the map below, some of those city pairs might seem to make sense, such as Dallas-Houston and Los Angeles-Las Vegas.

Click image for a larger view.

But a lot of the terminal cities being added to the map are so small — places like Rockland, Maine (7,500 people), Christiansburg, Virginia (25,000), and Cheyenne, Wyoming (76,000) — that even Amtrak lovers are skeptical. Matthew Yglesias, for example, says “Amtrak’s big idea of what to do with extra funding is to create new low-performing extensions to places with very low demand.” Continue reading

50th Anniversary of a Mistake

Today is the 50th anniversary of Congressional passage of the Rail Passenger Service Act, which created the National Railroad Passenger Corporation, later known as Amtrak. This law was based on several factual errors, the most important one being a claim that passenger trains could make money if only they were freed from the stodgy railroad executives who supposedly preferred freight over passenger service.

Early Amtrak train to San Francisco from Chicago. It took several years to repaint all of the equipment into Amtrak colors. Photo by Drew Jacksich.

Passenger train ridership had been declining since 1920 and the decline accelerated after World War II. A 1958 report from the Interstate Commerce Commission predicted that intercity passenger trains would disappear by 1970. In response, Congress passed legislation making it easier for the railroads to stop running interstate trains. Continue reading

Brightline’s Future Not Too Bright

As decribed in the lates Trains magazine (not available on line), Brightline is currently building tracks so that it can privately operate high-speed trains from Miami to Orlando. A few weeks ago, the company’s effective parent, Fortress Investment Group, was headlined in Forbes for “betting $9 billion that America’s transportation future is passenger rail.”

But things aren’t looking too bright for Brightline since then. For one thing, it has completely shut down its existing passenger train operations due to the pandemic, and doesn’t know when it will be able to revive them. (That may be just as well, as it was losing money on those trains anyway.)

More recently, plans to rebrand the operation “Virgin,” presumably with a significant investment by Richard Branson’s Virgin group, have fallen through. Branson told reporters that he had not actually invested any money into Brightline and that the plan to rename Brightline after Virgin was just a “marketing agreement.” Continue reading

Rumors Benefit Amtrak

Recently, the Wall Street Journal published a lengthy article claiming that Amtrak had a “plan” to end most or all long-distance trains. The article offered very little evidence other than oblique statements by Amtrak’s CEO, Richard Anderson. The only official statement from Amtrak quoted in the article stated that the company was “rethinking” its network but was not “prepared to announce any plans or recommendations yet.”

A week later, the Seattle Times repeated these rumors, again without any evidence except for the WSJ article. I guess no one should be surprised when rumors and speculation get reported (and re-reported) as news, but it is still disappointing.

The best evidence for what Amtrak thinks of long-distance trains comes not from off-the-cuff statements by its CEO but from what it is actually doing on the rails. The day after the Seattle Times article, Amtrak announced it would provide matching funds to help rehabilitate tracks used by the Southwest Chief, indicating it is committed to maintaining long-distance service. Continue reading

Brightline Noise

There’s lots of noise coming from Brightline, the company that is operating private passenger trains between Miami and West Palm Beach, with a goal of eventually reaching Orlando. Yet underneath the noise it appears nothing is really happening.

First, last September, Brightline bought XPressWest, a company that has gained permission, but not much funding, to build a high-speed rail line from Las Vegas to Victorville, California, because apparently a lot of people in Victorville (population: 121,000) have to get to Vegas really fast. Brightline supposedly paid $120 million for XPress, but it isn’t clear what it got for that money since XPress didn’t really have any assets other than building permits; most likely Brightline paid the $120 million in some sort of securities.

Second, a couple of months later, Richard Branson’s Virgin Group purchased a “minority interest” in Brightline. Branson has a lot of nice things to say about Brightline and Wes Edens, the co-founder of Fortress Investment Group and the lead supporter of Brightline. Continue reading

Amtrak Cancels Chicago

Amtrak, which often claims to offer all-weather transportation, preemptively cancelled all trains to and from Chicago yesterday due to cold temperatures and, as one news report says, “an abundance of caution.” Before Amtrak, private passenger trains would sometimes get stuck in deep snow or be rerouted due to floods.

However, I don’t recall hearing about the railroads cancelling passenger trains on account of cold weather. I myself once took a winter train from Winnipeg to Churchill, Manitoba. The mercury read minus 20 when we left Winnipeg and it was colder than that in Churchill. In fact, I doubt the temperatures ever got above minus 15 during the entire round trip. I regretted taking the trip as it was hard to see much of Churchill when risking frostbite just by going outside — I recall spending most of my time in a library. But the trains were on time despite the cold weather.

There is nothing to feel shy about going generic cialis from canada to get you tested. Sometimes we see that we take enough pharma-bi.com online viagra store food according to our need it is turned into the glucose by your liver and muscles. pharma-bi.com discount viagra Men’s cleaning tips – just like women, men too requiresvarious types of techniques to clean their face and body. Pooping while sitting is not the natural act and prescription de levitra we are not designed to do so. Perhaps Amtrak knows that its aging equipment is so poorly maintained that it can’t handle cold temperatures. Perhaps Amtrak thinks no one is going to try to ride trains in this weather anyway. Or perhaps Amtrak just doesn’t care about its passengers and is using this as a good excuse to save a few bucks. In any case, cold weather isn’t a satisfactory reason to cancel nearly all its trains in the Midwest. Continue reading

Amtrak’s Real Problem

Amtrak is under fire from a lot of pro-rail groups and experts. “The Amtrak era is over,” declared a recent op-ed in Railway Age magazine by F.K. Plous, who works for Corridor Rail, a “passenger rail development, finance and management company.” Amtrak, continues Plous, has “no goals, no growth strategy and no meaningful success/fail criteria.” However, instead of defunding it, Plous predictably proposes even more subsidies managed by a new agency or company (perhaps Corridor Rail?) that would somehow be better than Amtrak, and of course, backed up by “all the statutory, budgetary and bureaucratic resources needed to take passenger trains into the post-Amtrak world.”

Railway Age is hardly a railfan magazine, but it is not the only passenger train supporter that is critical of Amtrak. A few months ago the Railroad Passenger Association (formerly the National Association of Railroad Passengers) released a study claiming that Amtrak accounting was “fatally flawed” resulting in a “a false framing of Northeast Corridor services as ‘profitable’ and the rest of the system as ‘unprofitable.'” In fact, says RPA, all of Amtrak’s routes are unprofitable, which leads it to the curious conclusion that all should be subsidized even more.

Trains magazine joined the fray with an article in its January 2019 issue that partly relied on the RPA report and partly on its own research arguing that Amtrak’s management has a “no-growth policy” that results from “misplaced priorities.” Much of the article is based on an accounting system that was developed by an outside agency that Amtrak doesn’t trust and doesn’t use. But Trains seems to think that, despite not using it, it has somehow distorted Amtrak’s policies. In any case, the magazine’s conclusion is the same: Amtrak is awful, give it more money. Continue reading

Amtrak Ridership Declined in 2018

Although Amtrak has posted its October, 2018 performance report, which includes the first month of FY 2019, it still has not released its September report, which would include year-end results for fiscal year 2018. However, data distributed by rail groups indicates that Amtrak passenger ridership was 0.1 percent lower in 2018 than in 2017.

All of the decline was among long-distance trains, which lost 3.9 percent of their riders. Amtrak’s Northeast Corridor saw a 0.8 percent ridership increase while state-subsidized short-distance trains gained 0.4 percent more riders.

Ridership fell for all but two long-distance trains, the exceptions being the Oakland-Chicago California Zephyr and the New York-New Orleans Crescent. The New York-Chicago Lake Shore Limited lost 13.1 percent of its riders, while the Chicago-Seattle Empire Builder lost 5.6 percent of its riders, while still managing to be Amtrak’s number one long-distance train. Continue reading

The Grinch?

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Amtrak and Securities Fraud

Amtrak claims that its FY 2018 operating losses were the “lowest in decades” at a mere $168 million. However, there is no way to verify this because Amtrak has not yet published its FY 2018 financial reports.

Private companies are not allowed to drop hints about their financial health before the official results are released to the public. Elon Musk and Tesla got fined $40 million for securities fraud after sending out tweets before the release of Tesla’s annual report. But Amtrak gets away with the same sort of fraud that it commits in a blatant effort to boost its political standing.

Here are the numbers in Amtrak’s press release: total revenues were $3.38 billion; capital investments were $1.46 billion; and operating losses were $168 million. An AP story adds that Amtrak received $1.9 billion in federal subsidies. But what do these numbers mean? Continue reading