3498Two things relating to Amtrak.
- Jul 6, 2001First of all, they now have a California Rail Pass.
Secondly is this article out of the Chicago Sun-Times. Dawson
Amtrak on roll for non-passenger revenue
July 6, 2001
BY LAURENCE ARNOLD
WASHINGTON--Amtrak is branching out in pursuit of new income to stay in
business, from souvenirs to cell phone service, real estate development to
express package delivery.
In fact, the national railway now gets 43 percent of its revenue from
non-passenger business, up from 29 percent in 1990.
"Congress has basically said to us, `Start running yourself like a
business,' and that's what we're doing," said Amtrak's acting chairman,
Michael Dukakis, the former governor of Massachusetts.
Congress has given Amtrak until 2003 to wean itself from annual government
subsidies, something the railway has failed to do in its 30-year history.
So Amtrak is turning more and more to businesses other than carrying
passengers. It carries fruits and vegetables now, and lets
telecommunications companies share wires that run along some tracks.
A national rail system "by its nature is not profitable in a classic
commercial sense," Amtrak President George Warrington said in a recent
speech. He said Amtrak needs "to exploit and develop every conceivable
method of generating revenue and income to help us support a national
The Amtrak Reform Council, created by Congress as a watchdog, has encouraged
the railway in carrying mail and freight but says the system is wearing too
many other hats.
The council has proposed replacing the railway as owner of the tracks and
stations in the Northeast that Amtrak uses for many of its business
"Its core business is simple: running trains that carry passengers, mail and
express, from Boston to San Diego," said Gilbert Carmichael, the council's
Amtrak's revenue from passenger trains grew by 10 percent last year, to $1.2
billion, while revenue from other ventures grew by 15 percent, to $886
million, according to Transportation Department Inspector General Kenneth
But the railroad's expenses also are growing fast, fueled largely by
interest from debt to buy new equipment. Amtrak's 2000 operating loss of
$944 million was the largest in its history.
"Amtrak's financial condition remains precarious, and it is urgent that it
reduce expenses," the inspector general wrote in a report.
Subsidizing passenger train service with other business ventures is not a
new idea. The Postal Service once was a major customer for passenger trains,
sorting mail on board for delivery to post offices strategically built next
Amtrak has continued to carry small amounts of mail. And it took a leap into
the delivery business in 1998 when the Surface Transportation Board, a
federal regulatory agency, ruled it could carry time-sensitive packages and
Now Amtrak carries packages, periodicals, first-class mail and dry freight.
In a new venture, Amtrak carries lemons and oranges from California, and
apples from Washington state, to the East Coast in refrigerated cars.
Not all of Amtrak's ventures have succeeded. In April 2000, Amtrak launched
a route linking Chicago and Janesville, Wis., primarily to seek freight
business. Hardly any passengers rode the train, and the business
opportunities did not pan out. Amtrak has announced that the route will end