Rail

Report: Amtrak loses $32 per passenger

Posted on October 28, 2009

Forty-one of Amtrak's 44 routes lost money in 2008 with losses ranging from nearly $5 to $462 per passenger depending upon the line, according to analysis by Pew's Subsidyscope.

The line with the highest per passenger subsidy - the Sunset Limited, which runs from New Orleans to Los Angeles - carried almost 72,000 passengers last year. The California Zephyr, which runs from Chicago to San Francisco, had the second-highest per passenger subsidy of $193 and carried nearly 353,000 passengers in 2008. Pew's analysis indicates that the average loss per passenger on all 44 of Amtrak's lines was $32, about four times what the loss would be using Amtrak's figures, only $8 per passenger, since it uses a different method for calculating route performance.

The Northeast Corridor has the highest passenger volume of any Amtrak route, carrying nearly 10.9 million people in 2008. The corridor's high-speed Acela Express made a profit of about $41 per passenger. But the more heavily utilized Northeast Regional, with more than twice as many riders as the Acela, lost almost $5 per passenger.

Subsidyscope calculated profits and losses per passenger to determine which routes cost Amtrak the most to operate. Its analysis was based on a 2005 Government Accountability Office (GAO) critique of Amtrak's accounting methods, which says the railroad should consider depreciation when calculating profitability. Other capital intensive industries, such as commercial airlines, include depreciation and overhead when looking at route performance.

In October 2008, Congress passed legislation reauthorizing Amtrak for an average of $1.5 billion a year for five years. The Passenger Rail Investment and Improvement Act requires that the railroad provide metrics for measuring all long-distance routes and find ways to improve the financial performance of those routes. Amtrak officials say they are considering options to make the Sunset Limited less costly.

Amtrak lost $1.1 billion last year, but says that only $236 million of this should be attributed to its core business lines, such as the Northeast Corridor. The remainder, it asserts, should be associated with ancillary businesses, depreciation and other direct costs, such as fuel and power, locomotive maintenance and call centers.

Amtrak's ancillary businesses include contracted operator services to commuter trains around the country, such as the MARC in Maryland and Caltrain in California, many of which are buttressed through state and local funding sources. The ancillary businesses are actually a source of profit for Amtrak, bringing in $93.7 million in 2008.

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