Amtrak Chair: Profitability Not Amtrak’s Mission

By Sean Jeans-Gail

Finally, something for passengers to be grateful for.

In a guest editorial in Railway Age magazine, Amtrak Chair Tony Coscia hit back against the notion that Amtrak’s primary mission should be profitability. The chairman of the railroad explained that Amtrak’s mission, as defined by Congress, is “to provide efficient and effective intercity passenger rail mobility consisting of high-quality service that is trip-time competitive with other intercity travel options.”

To be clear, this is not a new message. Rail Passengers’ President Jim Mathews made this exact same point in a hearing before the House Committee on Transportation & Infrastructure in September of this year:

“I’ve said it to this committee before, and I’ll say it to anyone who’ll listen—it’s not a question of if trains make money, it’s about who trains make money for. Rail corridors generate value by acting as economic engines in the communities they serve—through jobs, retail, mobility, tourism and real-estate development. The ‘profit’ goes not to Amtrak, but to the communities served, often to the tune of billions of dollars.”

However, this is a welcome departure from the messaging of the previous Amtrak CEO, Richard Anderson, who was notorious for incorrectly (and repeatedly) asserting that it was Amtrak’s duty to make an “above the rails” profit, even if it meant cutting essential services. In his editorial, Coscia provided much needed context to counter that false narrative:

"Mobility is not a moneymaker if you have to pay for 100% of the cost of getting from point A to point B. No mode of passenger transportation fully pays for itself. Airline tickets, the cost of driving, and commuter train and bus fares would all be prohibitively expensive if users had to fund all costs associated them. Even our roads and interstates, which road advocates used to love saying were ‘user funded,’ require billions in subsidies each year, with the feds now providing more than $157 billion in general revenue subsidies for the insolvent Highway Trust Fund since 2008. And, of course, airlines don’t build airports, and government at various levels provides substantial subsidies to transit systems. The costs of intercity passenger rail just happen to mostly run through Amtrak, and as a result the full expense of our mode is easier to see. Given this, Amtrak funding has always been a target by critics and competitors that like to forget the subsidization that occurs across all modes."

This change in strategy is perhaps not all that surprising given the dire state of the transportation sector writ large. The International Air Transport Association, the airline industry’s chief trade group, predicted this week that global air carriers will lose a combined $157 billion in 2020 and 2021—roughly five times the losses sustained during the previous recession in 2008 and 2009. With a public mandate come public funds, so Amtrak has more reason than ever to enthusiastically comply with Congressional directives.

And Congress has been crystal clear about the value they place on the National Network. Just this month the Senate released an FY2021 transportation budget that states “long-distance passenger rail routes provide much-needed transportation access for 4,700,000 riders in 325 communities in 40 States and are particularly important in rural areas;” and “long-distance passenger rail routes and services should be sustained to ensure connectivity throughout the National Network.”

Now, compare that to Coscia’s recently expressed views on the subject:

"We recognize the critical role that long-distance routes already play in communities across America. These trains provide essential transportation and contribute to both economic opportunity and quality of life in places that have long ago been abandoned by the airlines and bus carriers. By creating corridors around the nation that are interconnected by current long-distance routes, we can enhance the viability of long-distance service and make the national network more essential, not less."

To put it mildly: it is gratifying to see the thousands of hours of Congressional advocacy by Rail Passengers staff and volunteers on behalf of the National Network find its way into Amtrak’s company line.

However, there is still much work to be done. This Monday, Amtrak revealed that, with ridership 75% off of pre-pandemic levels, they’ll be forced to furlough an additional 1,950 employees. With widespread distribution of a COVID-19 vaccine still at least half a year away, ridership numbers will remain depressed over the next six months. Without federal aid, we're likely facing additional cuts to Amtrak's operating and capital budget.

“The approach we have to this is that these are our employees: they’re the people we care about,” Coscia told reporters over a media briefing call. “These are our passengers: they’re the people we care about, and they come first and we’re doing everything possible to assure that we don’t create further disruption to any of this. But we clearly need to help because we know that it can’t be done on our own.”

There is already a solution: the U.S. House of Representatives has already passed a rescue bill that includes $2.4 billion for Amtrak—enough to restore daily service across the Amtrak system—with another $32 billion for the transit industry. However, the Senate has so far refused to take up a transportation relief bill and has already adjourned for its Thanksgiving break. With only a few weeks left in the 2020 legislative calendar and a government shutdown to avoid, it’s likely another COVID-19 relief bill will have to wait until 2021 and a Biden Administration. That leaves transit officials across the U.S. planning for 2021 in a cloud of uncertainty.