Going Inside Flynn’s Congress Testimony

Amtrak President William Flynn had a lot to say this week during his first appearance before Congress, which was in large part a plea for more money to overcome the effects of the COVID-19 pandemic.

In his prepared statement, Flynn said Amtrak projects it will lose $1.266 billion in ticket sales in federal fiscal year 2020, which would be 55 percent of what it earned in FY2019.

Amtrak’s recovery from the pandemic has been slow and ridership and revenue are still down more than 80 percent compared to a year ago.

“It has become clear that the pandemic’s impacts will extend through, and almost certainly beyond, FY2021 as well, and Amtrak, along with our state partners, are now working to plan for the year ahead,” he said.

You probably have read or heard by now how he said the railroad needs $4.9 billion in federal fiscal year 2021 in order to stave off its planned service cuts to all long-distance trains except the Auto Train.

But buried in his prepared remarks to the House Subcommittee on Railroads, Pipelines and Hazardous Materials of the House Transportation and Infrastructure Committee was this comment about the economics of long-distance passenger trains:

“ . . . in normal times they cover most of the out-of-pocket costs such as fuel, commissary supplies, host railroad payments, and wages and benefits for on-board employees that are incurred by each train that operates over a route.

“Therefore, operating service three times a week rather than daily ordinarily would not produce significant and immediate cash saving.”

That, in essence, is what some critics of the Amtrak’s plans to its long-distance network on a less than daily basis have been saying all along.

So why is Amtrak reducing the scope of long-distance service?

Flynn framed it as a matter of diminished ridership and revenue.

“In the early days of the COVID-19 pandemic, we hoped that passenger demand would increase appreciably on long-distance routes during what is normally their peak summer season.”

But he said that didn’t happen because of the reluctance of the public to travel during the pandemic.

Ridership of long-distance trains in June and July, excluding the Auto Train, was down by two-thirds compared with the same months of 2019.

“The two-thirds reduction in revenues has had a major impact on long-distance financial performance,” he said.

Flynn said that the long-distance trains lost $475 million in FY 2019 and without providing specific figures said these trains “are incurring huge, additional operating losses for each train we operate –for the benefit of just a third of the normal number of passengers.

“Given that, we felt that it would be irresponsible to continue spending a much larger share of our limited funding to provide the same frequency of service for a much smaller number of remaining passengers, particularly as we entered the fall/winter season when monthly long distance ridership normally declines up to 40 percent from the summer peak.”

The Amtrak president repeatedly in his prepared remarks sought to frame the reduction in long-distance service as temporary.

“One thing I want to make absolutely clear: These long-distance frequency reductions are temporary,” Flynn said. “We are committed to continuing to operate our current long distance network and to improving the service we provide to our long distance passengers.”

He reiterated that another time when he said, “As ridership returns, we intend to restore service frequency to previous levels. We remain committed to our long distance system.”

Not everyone will take that comment at face value. Many skeptics want to believe the service cuts are part of a nefarious strategy to discontinue long-distance passenger routes in favor of corridor services that would be paid for by state and local governments.

The Rail Passengers Association and other rail passenger advocates have been trying to argue that daily operation of long-distance trains is an essential public service during the pandemic.

For now it appears that keeping all of the long-distance trains except the Cardinal and Sunset Limited – which have operated tri-weekly for years – on daily schedules hinges upon Congress giving Amtrak nearly $5 billion for FY2021.

Flynn’s prepared statement suggested that not only does Amtrak want additional money it also seems to want a mandate from Congress ordering it to keep long-distance trains operating daily.

“We will do as directed by Congress,” Flynn said. “If that $4.9 billion instructs us to rescind the furloughs and rescind the service cuts, we’ll do that.”

If no additional funding is forthcoming and Amtrak implements the long-distance train service reductions as planned, Flynn said Amtrak would evaluate ridership and revenue of those trains in February.

He recited in his statement the criteria for restoration of daily service that Amtrak proclaimed in a white paper published about a month ago.

His statement hinted that restoration of daily service would be undertaken on an individual route basis and some trains might not resume daily operation until FY2022.

“If any route is not yet ready to be restored when we conduct our [February 2021] review, we will apply an updated version of the criteria  . . . as part of our FY 2022 planning cycle or sooner, in the event of a dramatic improvement in demand prior to that point,” he said.

It is noteworthy that Flynn also said the future of Amtrak’s long-distance network hinges upon Congress providing capital funding to buy new equipment, saying the equipment used on long-distance trains is more than 40 years old and has reached the end of its useful life.

That equipment must be replaced “if we are to maintain current long-distance service.”

Flynn also called on Congress to give Amtrak the legal tools to argue that passenger trains deserve preference in dispatching over freight trains.

“The greatest threat to the future of our long-distance network is not COVID-19, but rather poor on-time performance that diminishes the value of these services to our customers,” he said.

“The leading cause of delays to our long distance trains is the failure of some of our host railroads to comply with this longstanding legal obligation to provide Amtrak trains with preference over their tracks.”

Amtrak’s host railroads, of course, would have a different view of the matter, but conflict with its host railroads has been going for decades and figures to last a long time.

Flynn was optimistic about Amtrak’s future, but didn’t present much of a vision as to what he sees as the role of intercity rail passenger in America.

Missing from his comments was the sometimes strident and caustic tone that his predecessor, Richard Anderson, sometimes displayed.

He touched on how long-distance trains lose money without dwelling on those losses or villifying those trains. At the same time his commitment to the long-distance network was less a ringing endorsement than a description of something that Amtrak does.

It was, of course, just the first of what are likely to be many statements that Flynn will make to Congress so we should probably avoid reading too much into this statement, which also was delivered under some of the most adverse circumstances any Amtrak head has faced.

As always, though, the fate of Amtrak is up to Congress.

 

 

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