Additional infrastructure investments identified
While making its annual pitch for federal funding, Amtrak formalized a request this fall for up to $4.857 billion this fiscal year to bolster the national passenger railroad network, which has been hit hard by the pandemic. Another $5 billion is needed to build necessary infrastructure and help stimulate an economic rebound.
In a letter to Congress, Amtrak President and CEO Bill Flynn justified updating the railroad’s forecast for FY 2020 because of a slow return of riders after a huge drop at the start of covid-19. At the beginning, Amtrak shut down routes as ridership plummeted because of lockdowns. Revenues dropped 83 percent from March to July compared to 2019.
To offset, Amtrak cut expenses, including reducing the size of consists on long-distance trains. Now ridership has slowly returned and some routes have reopened, but Amtrak still anticipates FY 2021 ridership and revenue improving to only 40 percent of levels before the pandemic. More cuts are planned.
“We have seen that our ridership is not returning as quickly or at the levels that we had hoped for, and we updated our forecast for FY 21,” Flynn said in the letter. “We now anticipate needing up to $4.857 billion in FY 21 to support the company and our employees through this unprecedented situation.”
Additionally, as Congress considers programs for stimulating the economy, Amtrak has identified $5.193 billion in additional investments as part of an economic recovery proposal, among them replacing bridges and tunnels in the Northeast Corridor, infrastructure improvements throughout Amtrak’s national network and major station upgrades.
Amtrak says that, based on various transportation studies, the additional investment would create more than 75,000 jobs.
If additional funding isn’t received, the potential for suspensions of corridor train service could increase and numerous capital projects and procurement critical to the railroad could be deferred, resulting in significant job losses, Amtrak said.
Flynn said Amtrak will adjust its operating and capital spending plans to manage through early December but beyond that the railroad needs help.
Business remained at about 25 percent of pre-covid levels in September, and Amtrak wants to get leaner with service for the remainder of the current fiscal year. Up to 32 percent fewer trips will be made in the Northeast Corridor and on state-supported routes, and most long-distance trains will run only three days per week.
“If the FY 20 funding level is extended beyond Dec. 11, 2020 and supplemental funding has not yet been provided, we will be unable to avoid more drastic impacts that could have long lasting effects on our Northeast Corridor infrastructure and the national rail system,” Flynn told Congress.
Testifying before the U.S. House of Representatives House Transportation & Infrastructure Subcommittee on Railroads, Pipelines and Hazardous Materials in September, Rail Passengers Association President and Chief Executive Officer Jim Mathews called upon Congress to provide Amtrak with the necessary funding to return service fully.
Amtrak’s long-term survival is in jeopardy and the railroad provides an “essential service” to the communities it connects. Mathews added that the coronavirus has made passenger rail services more necessary for certain segments of the population.
“For many, it’s easier to understand why a service like the Northeast Corridor is necessary,” he said. “Without the 2,200 daily trains and 260 million annual trips the NEC carries, the regions this corridor links would grind to a halt.”
Mathews noted that Amtrak has shown resilience as the U.S. has managed the pandemic. Ridership for Northeast Corridor, state and long-distance routes slowly climbed from April through July as the economy reopened. Long-distance ridership improved the most, rebounding 16 percent from its low in April while contributing the largest single share of revenues every month since March.
Also, Amtrak’s National Network of long-distance intercity passenger routes has contributed 45 percent of Amtrak’s revenues, compared with 21 percent a year ago.
Mathews advocates that Amtrak have the appropriate resources to continue running daily long-distance trains with shorter equipment consists for the duration of the pandemic.
“Slashing daily frequencies to three times per week would only ensure that the long-distance trains would sink to levels similar to those being seen in Amtrak’s other business lines,” he said. “By contrast, running shorter consists but maintaining daily frequencies would preserve connections and jobs and allow Amtrak’s National Network ridership to return to previous levels organically, all while still lowering some operating costs.”