ABA chief testifies before House on Amtrak subsidies

Posted on September 25, 2012

American Bus Association (ABA) President and CEO Peter Pantuso told members of the House Transportation and Infrastructure Committee on Sept. 20, that motorcoach transportation in the United States continues strong year-to-year growth and remains exceptionally competitive against other modes of transportation, especially considering that Amtrak remains heavily subsidized by the federal government.

“We know the American public is hungry for more transportation options,” said Pantuso. “In a study released last week, the Natural Resources Defense Council found that three out of four Americans are frustrated with the lack of transportation options that forces them to drive more than they would prefer. In our view the major barrier to offering real passenger choice is a combination of an uneven playing field and modal stovepipes. While the intercity bus industry must compete in the free market, its major intercity competition, including Amtrak, is heavily subsidized.

“As the subsidy gap between our industry and Amtrak continues to grow, bus operators will start to lose the price and time competition, not as a function of the free market, but because of government spending. This is because Amtrak is not required to operate like a business covering both operational and capital costs. Even on corridors that are ‘profitable,’ they are still not covering the costs of capital replacement for their fleet as a bus operator must do. While this hurts competition in densely populated areas, it is a disaster for the industry and, more importantly, Americans living in more sparsely populated regions,” concluded Pantuso.

At the hearing, Amtrak President Joe Boardman reported the subsidy per ticket is now 15% and dropping. Some members of the committee disputed those figures, responding that, on some routes, the subsidy is more than $300 per ticket.

Pantuso said that private motorcoach companies and Amtrak have many areas of common interest, and he pledged that ABA members will continue to work with Amtrak on a variety of projects. “In the end, it’s all about moving passengers safely and comfortably to their destination,” he added. “ABA wishes to thank members of the Committee and, in particular, Chairman John Mica of Florida, for the opportunity to discuss important issues in the transportation industry with the members.”

Click here to view Pantuso’s testimony.

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