Amtrak Expansion Still Far Off

During remarks to the Amtrak Board of Directors last week, CEO Stephen Gardner gave an upbeat view of Amtrak’s future that he then qualified with numerous caveats that suggested expansion of the Amtrak network is still far away.

The board met in St. Louis and heard top Amtrak managers give a snapshot of where the passenger carrier is, which is recovery mode from the effects of the COVID-19 pandemic.

Ridership is at 85 percent of pre-pandemic levels with 22.9 million passengers handled during fiscal year 2022, which ended on Sept. 30.

Revenue of $2.8 billion was down 15 percent compared with fiscal year 2019.

In the past year fares have been higher and Amtrak’s capacity has been lower due to equipment that was idled during the pandemic still not being available for revenue service due to shortages of mechanical workers and funding.

During fiscal year 2022, Amtrak operated 80 percent of its pre-pandemic schedule.

As for expansion, Amtrak in 2021 released its Connect U.S. plan that called for new intercity rail passenger service to 160 communities.

Funding from the Infrastructure Investment and Jobs Act was expected to be a major down payment on that plan.

“We’re entering a new [era] . . . for passenger rail in America, and Amtrak’s future could never be brighter,” Gardner said.

But then Gardner began issuing his list of caveats. Topping the list is that it will take longer to get new routes up and running than some rail passenger advocates would like.

Just two new routes began in FY2022 and both of those were in the development stage before the onset of the COVID-19 pandemic.

Although new service between New Orleans and Mobile, Alabama, was mentioned along with development of a corridor between Richmond, Virginia, and Raleigh, North Carolina, no timeline for implementation of those services was provided.

Another key caveat is the network expansion hinges on state and local government financial support.

Gardner noted during his presentation that state and federal financial support is key to new service because the influx of funding made available by the IIJA mandates that just 80 percent of the cost to develop a new service can be provided by the federal government.

“Amtrak is not a unitary actor,” he said. “We cannot tomorrow say ‘we want to stop here and issue an edict.’”

Amtrak Board Chairman Anthony Coscia said later, “There is a meaningful difference between states in terms of their ability to be supportive of passenger rail.”

Amtrak already appears to be pulling back on its ambitious Connects U.S. project.

Executive Vice President Dennis Newman introduced a new map that showed “expressions of interest” that reflects potential new service where there has been significant state and local interest.

This includes a new train between Fargo, North Dakota, and Spokane, Washington, which would mirror the former Chicago-Seattle North Coast Hiawatha that was discontinued in early October 1979.

Also on the map is proposed service between Los Angeles and Las Vegas, proposed service between Salt Lake City and Boise, Idaho, and a Dallas section of the New York-New Orleans Crescent.

The Las Vegas and Boise service proposals would revive other former routes of the Desert Wind and the Pioneer, respectively.

During the question and answer session of the meeting, Gardner said Amtrak can’t expand long-distance routes without additional funding from the federal government.

Aside from the open question of whether Congress would agree to provide that funding, long-distance network expansion is hamstrung by equipment shortages that have reduced the capacity of existing trains.

In response to an audience member question, Gardner said some stored equipment that is no longer commercially viable is being used as a parts supply.

“We also have to analyze the dollars available,” he said and then added that additional capital is needed to put equipment back into service.

For now, Garnder said Amtrak is seeking to get more equipment back into service “just to catch up on overhauls and maintain the current fleet.”

Although the audience member was asking about Superliners, Amtrak has found itself short of equipment for corridor services because many of the 60 Venture cars it had expected to be in service this year remain sidelined by production issues and quality control matters.

Instead, Amtrak has only been able to use about 30 of the Venture cars.

New equipment that Amtrak had expected to use for its Acela service in the Northeast Corridor remains on the sidelines. Gardner said that equipment is not expected to begin revenue service until late 2023, which is two years later than originally projected.

New equipment that Amtrak plans to order for Northeast Regional service in the Northeast Corridor won’t be available until 2026 at the earliest.

“There is not an off-the-shelf product, in most cases, that is available,” Gardner said when speaking about equipment issues. “We don’t have the domestic supply base.”

Amtrak Executives Say Attrition, Not Furloughs Led to Shortage of Mechanical Workers

Amtrak CEO Stephen Gardner and Board Chairman Anthony Coscia pushed back last week on the assertion that furloughs during the COVID-19 pandemic are responsibility for shortages of mechanical workers at the passenger carrier.

During a public meeting last Thursday in St. Louis of the Amtrak board of directors, both took issue with an assertion by Rail Passengers Association head Jim Mathews that “choices surrounding furloughs and equipment have left Amtrak struggling to accommodate demand surges – both on specific routes and over travel periods, such as Thanksgiving.”

Coscia acknowledged that Amtrak lacks adequate equipment and personnel to “bring back service the way we’d like to.”

Gardner said attrition and not furloughs are the reason for the thin workforce in Amtrak’s mechanical department.

“That’s not true, that’s not what happened,” Gardner said in response to Mathews. “What did happen was that during this period of time [the pandemic] when we could not hire we could not overcome the attrition. So last year we hired 3,600 people or so, but we also lost 1,600 people during that same period to retirements, to a change in job, [and] to relocations” and other reasons.

Gardner said about 90 percent of workers who were furloughed by Amtrak during the pandemic have since returned to their jobs.

Coscia said Amtrak is trying to rebuild a workforce “that had kind of atrophied to a certain degree.”

The question arose during a discussion about how Amtrak has a backlog of equipment idling in shops instead of being placed back into revenue service due to a lack of mechanical staff to bring those cars into operating condition.

Gardner said hiring electricians and machinists is tough to do in some locations, but Amtrak is working with its unions to find new ways to hire and train new workers. One such program is a new apprenticeship program for entry-level jobs.

“We’re working every angle to be able to restore people that make the trains available to serve our customers . . . [and] restore service and then grow,” Gardner said.

Amtrak is seeking to hire an additional 4,000 new employees in 2023, most of whom would work in the mechanical crafts where the need is most acutely felt.

Nonetheless, Amtrak management still expects to fall short of reaching full staffing by the end of the federal fiscal year on Sept. 30, 2025.

The passenger carrier expects capacity on its trains to be less than it was four years ago and forecasts it will carry 28 million passengers in fiscal year 2024, which would be 90 percent of 2019 levels.

Amtrak expects to restore capacity to pre-pandemic levels in FY2024, which begins Oct. 1, 2024. It also expects ridership during FY2025 to exceed that of 2019.

Harris Promoted to President at Amtrak

Amtrak is promoting Roger Harris to the position of president with current president Stephen Gardner focusing on being the railroad’s chief executive officer.

Harris is currently serving as Amtrak’s chief commercial officer, a position he has held since April 2019.

In his new role, Harris will report to Gardner who became CEO last January following the retirement of William Flynn. Gardner was named president of Amtrak in November 2020.

As president Harris will lead coordination of operations, marketing, customer service, network planning, and other functions.

Splitting the CEO and president positions is not uncommon at Amtrak. The president of Amtrak was the passenger carrier’s highest executive position until the CEO post was created during the Joseph Boardman administration (2008-2016).

Amtrak also announced that effective July 5 Gerhard (Gery) Williams will become executive vice president, service delivery and operations.

He will report to Harris and a new chief commercial officer when one is hired.

Williams succeeds Scot Naparstek, who is retiring after 10 years with Amtrak, including five in his current role where he has supervised such safety improvements as the implementation of positive train control.

Williams has served as senior vice president, service delivery and operations, since January. He joined Amtrak in 2017 as vice president and chief engineer.

Flynn to Retire as Amtrak CEO in January

Amtrak announced on Wednesday that CEO William J. Flynn will retire from his post on Jan. 17, 2022, and be replaced by company president Stephen Gardner.

Gardner will assume the positions of president and CEO, an arrangement that Amtrak has used in the past. He will be the fourth CEO at Amtrak in the past five years.

Flynn has served as Amtrak CEO since April 15, 2020, when he replaced Richard Anderson. At the time of his hiring, Flynn assumed the positions of CEO and president.

He dropped the latter title when Gardner was promoted to president in December 2020 with responsibility of overseeing the passenger carrier’s daily operations and modernizing its services and equipment fleet.

Flynn, 67, came to Amtrak after having served as CEO and president of Atlas Air World Holdings, a charter and freight carrier. He was at Atlas for 13 years.

He also held senior positions at CSX Transportation, Sea-Land Services, and GeoLogistics Corporation.

Amtrak said Flynn will continue to serve Amtrak as a senior advisor through the end of the federal fiscal 2022 budget year.

Gardner, 45, has a largely political background having served as a staff member for two Democratic members of Congress and as a senior staff member of a congressional committee overseeing transportation.

He is credited with having written much of the Passenger Rail Investment and Improvement Act of 2008.

Earlier in his career, Gardner held operating and management positions at Maine Central, and the Buckingham Branch Railroad.

January Amtrak Service Cuts Seem Likely

Amtrak Service reductions in January appear to be a near certainty.

The passenger carrier’s president, Stephen Gardner, told a congressional hearing on Thursday, that the service cuts, which are expected to involve long-distance trains, are due to expected crew shortages stemming from a COVID-19 vaccination rule the carrier imposed.

Gardner said 94 percent of Amtrak workers are full vaccinated and 96 percent have received at least one immunization.

However, the company is expected to find itself short staffed as workers who have failed to be vaccinated are terminated. Another factor, Gardner said, is a wave of retirements during the COVID-19 pandemic.

He said Amtrak also has faced slow going in hiring new workers to replace the retirees and vacancies expected to be created by those who do not comply with the vaccination rule.

Gardner said vaccination rates among workers are lowest in the ranks of workers assigned to long-distance routes.

Amtrak imposed the vaccination rule in compliance with an executive order issued by the Biden administration requiring employees of government contractors to be fully vaccinated by Jan. 4, 2022.

That mandate has been challenged in federal courts and earlier this week a judge in Georgia issued a stay of the order. Unions representing workers at Amtrak and various Class 1 railroads have filed lawsuits challenging the rules imposed by the carriers.

It is unclear how these developments might affect the expected Amtrak service reductions.

Amtrak officials have been indicating for several weeks that the passenger carrier doesn’t expect to have enough fully vaccinated workers by January to support its full national network as well the various corridor services that it offers.

An announcement of which routes will see reduced service is expected to be made next week.

Those service cuts are expected to be similar to those imposed in October 2020 when most long-distance routes were reduced to tri-weekly or quad-weekly frequency of operation. The impetus for those reductions was low patronage cause by the pandemic depressing travel.

Those service reductions were restored on a route-by-route basis in last May and June.

During his testimony, Gardner said the long-distance route service cuts are expected to be temporary with full service restored by March.

In some crew bases that serve long-distance routes, Gardner said the rate of noncompliance with the vaccine rule is relatively high.

Passengers whose trips will be disrupted by the service cutbacks will be contacted and offered the opportunity to rebook their trips.

The hearing was held by the House Transportation and Infrastructure Committee Rail Subcommittee hearing and was titled, “Leveraging Infrastructure and Jobs Act: Plans for Expanding Intercity Passenger Rail.”

Gardner Named Amtrak President

Amtrak said on Monday that one of its vice presidents will become its president on Dec. 1.

Stephen Gardner

Stephen Gardner, currently Amtrak’s executive vice president and chief operating and commercial officer, will replace William Flynn.

Flynn, who became Amtrak’s president and CEO in April, will remain with the passenger carrier as CEO and a member of its board of directors.

The promotion of Gardner to president had been widely expected by many rail industry observers.

Railway Age reported that Gardner has been making most of the major decisions and setting policy during his time as an Amtrak senior vice president.

His elevation to the president’s chair coincides with the election of Joseph Biden as president. Gardner, like Biden, is a Democrat.

Earlier in his career, Gardner served in staff positions for Congressional Democrats on Capitol Hill, including Delaware Senator Tom Carper.

He joined Amtrak in 2009 after having helped develop railroad and transportation policy for the U.S. Senate Committee on Commerce, Science and Transportation.

Before coming to Washington, Gardner worked for Guilford Rail System (now Pan Am Railways) and the Buckingham Branch Railroad.

Railway Age said Gardner is widely recognized as one of the principal authors of the Passenger Rail Investment and Improvement Act of 2008.

The magazine said Gardner was unlikely to become Amtrak’s president so long as Republicans controlled the White House and the Department of Transportation.

In a prepared statement, Amtrak said the change in leadership was “part of a broader set of actions taken . . . to ensure that Amtrak is well positioned for success in fiscal year 2021 and beyond.”

The statement said Gardner will lead day-to-day operations and oversee marketing, operations, planning, government affairs, and corporate communication.

Historically, Amtrak’s president has been its top executive, but during the tenure of the late Joseph Boardman the company added the CEO title to his duties.

Amtrak’s statement said the carrier faces “two urgent challenges in 2021” including weathering the COVID-19 pandemic and bolstering Amtrak’s future.

Amtrak’s presidency has been a revolving door in recent years with no one person holding the position for more than a few years.

Charles “Wick” Moorman, a former CEO of Norfolk Southern, came out of retirement in 2016 to serve as Amtrak president and CEO in what at the time was described as a transitional appointment.

Moorman became co-CEO of Amtrak with Richard Anderson in June 2017, an arrangement that continued through the end of 2017.

Anderson, a former CEO of Delta Air Lines, served as Amtrak’s top executive until being replaced in April 2020 by William Flynn, a former CEO of Atlas Air.

Amtrak Lost $801M in FY2020

Amtrak warned yet again on Monday that further service cuts are possible unless Congress increases its federal funding for the passenger carrier in fiscal year 2021.

Funding for Amtrak and other federally-funded programs is currently being provided under a continuing resolution approved by Congress in late September that expires on Dec. 11.

That resolution calls for interim funding in FY2021 to be at the same levels as FY2020, which ended on Sept. 30.

“If the current level of funding is extended in a continuing resolution beyond Dec. 11 . . . and supplemental funding isn’t provided we’re going to be unable to avoid taking fairly difficult actions that could have long-lasting effects on our Northeast Corridor infrastructure and the national rail system,” said Amtrak CEO William Flynn.

Flynn said the carrier needs additional emergency funding for the remainder of the fiscal year.

If Amtrak funding continues at its current levels, Flynn said as many as 1,600 workers operating state-supported trains could be furloughed.

Amtrak Senior Executive Vice President Stephen Gardner said decisions on job and service cuts will be made based on how long the uncertainty remains.

In a news release, Amtrak said during FY2020 its operating revenue, including payments from state-supported routes, decreased 31.9 percent to $2.3 billion when compared with FY 2019.

Ticket revenue was down $1.24 billion or 47.3 percent.

During FY2020 Amtrak posted an unaudited operating loss of $801.1 million, which it attributed largely to lost ridership during the pandemic.

The carrier also reported advancing $1.9 billion in infrastructure and fleet work.

Amtrak Board Chairman Anthony Coscia said the passenger carrier projects that under current trends and future projections, ridership and revenue are expected to be down 63 percent by the end of fiscal 2021.

That would be worse than the 50 percent decline Amtrak management had predicted earlier when it announced its plans to reduce the operating frequency of most long-distance trains to tri-weekly.

Coscia said Amtrak intends to move forward on $2 billion in critical infrastructure work “that includes safety and reliability measures that we believe will permit the company to come through the pandemic with a railroad that was playing and will play in the nation’s economic recovery.”

He said Amtrak has more than $5 billion of additional investments that could contribute to recovery following the pandemic.

Amtrak said it provided 16.8 million customer trips in FY 2020, down 47.4 percent with a year-over-year decline of 15.2 million riders.

In recent months, ridership has dipped by 20 to 25 percent of pre-COVID levels.

Amtrak Execs Defend Move to Tri-Weekly Trains

Amtrak management is not counting on Congress to direct it to continue operating its long-distance trains on daily schedules this fall and winter but will maintain the status quo if so directed by lawmakers.

In an interview with Trains magazine, Amtrak President William Flynn and Senior Executive Vice President Stephen Gardner said the carrier has not developed contingency plans to operate its long-distance trains daily after October when it will be implementing tri-weekly service on all routes except the Auto Train.

“I don’t envision a situation where Congress is giving us something above the $3.5 billion,” Gardner said, “And they are not being fairly clear about what they expect in terms of operating levels.”

He was referring in part to Amtrak’s request for $1.475 billion in supplemental funding on top of the carrier’s $2.04 billion budget request for federal fiscal year 2021, which begins Oct. 1.

The House has approved $10 billion in funding for Amtrak in FY2021 along with a mandate to continue daily service on all routes that have it now.

However, the Senate has yet to act on the FY2021 appropriations bills. The Rail Passengers Association reported last week that Congressional hearings on Amtrak funding may be held in September.

“If Congress directs us to operate a seven-day service we will,” Flynn said.

But he warned that if Congress doesn’t provide suitable funding Amtrak will “have to make additional cuts to the workforce, and it would certainly affect our capital plans and suggest reductions on the Northeast Corridor and perhaps elsewhere on the national network.”

Flynn said Amtrak has not developed contingency plans for operating a daily long-distance network past October.

During the interview, both Amtrak executives defended the move to tri-weekly service with Gardner saying the situation this year is quite different than it was in 1995 when Amtrak reduced the operation of several, but not all, long-distance trains to tri- and quad-weekly after a consulting firm recommended that as a way to save money during a budget crunch.

A Government Accounting Office report later noted that the projected savings largely failed to materialize as expected because some costs did not fall as much as expected.

“We feel good about being able to save significant dollars for a limited period, and that makes sense because demand is so low,” Gardner said.

Amtrak has projected that operating long-distance trains at tri-weekly levels will yield a savings of $150 million.

Gardner, who serves as Amtrak’s chief operating and commercial officer, acknowledged that tri-weekly operation of trains is not ideal.

“Three days per week is not a good solution in a normal revenue environment [but] we’ve done our homework,” he said.

Trains also reported on Monday that earlier versions of the metrics Amtrak said it will use to determine when to return long-distance trains to daily operation were rejected by Capitol Hill staffers.

The staffers apparently proposed using metrics including airport bookings along long-distance routes and system-wide percentage drops in ridership since April.

Those suggestions also sought to chart long-distance ridership from October to May, something the Trains report said would overlook the strength of holiday-period travel.

Amtrak revenue in July was down 82 percent when compared with July 2019.

The 15 long-distance trains contributed 54 percent of the ticket revenue and long-distance trains income was down 61 percent when compared to July 2019.

Northeast Corridor revenue was down 93 percent and state-supported revenue was off 83 percent.

In the meantime, Amtrak has ceased selling sleeping car space starting Oct. 5 on the days that long-distance trains will not operate.

A statement issued by Amtrak on Monday said the carrier hopes to restore some or all long-distance service to daily operation in 2021, but that will hinge on adequate federal funding in FY2021 and at this point it is unclear how much money Amtrak will receive.

Amtrak Looking to Beyond Pandemic

Amtrak executives expect to return service to normal levels gradually once the worst of the COVID-19 pandemic is over.

Senior Vice President Stephen Gardner told employees during a town hall meeting late last week that restoring service after the pandemic will be a challenge because the railroad doesn’t know how quickly demand will recover.

Some services might see strong demand once the public begins to travel again.

Also addressing the town hall was incoming Amtrak President William Flynn, who will replace Richard Anderson on April 15.

“We’re planning for several scenarios where the recovery pattern might be different in specific regions — gradual or a big jump,” Flynn said.

Trains magazine obtained a copy of the town hall meeting and reported some of its contents on its website on Monday.

Gardner said Amtrak will work with states that fund corridor service to determine “how much service we have on routes they help support.”

Flynn was introduced during the town hall by Anderson.

The next Amtrak CEO lauded Amtrak employees for their diligence during the pandemic, particularly those who handled the derailment of the northbound Auto Train on March 26.

Flynn pledged to avoid furloughing Amtrak workers during the pandemic.

Anderson said Amtrak’s overall bookings have plunged by 95 percent with ridership in the Northeast Corridor down 98 percent, state-supported service down 93 percent and long-distance ridership declining 87 percent.

Amtrak’s daily train frequencies have been slashed from 309 to 156, with 77 percent of the Northeast Corridor service suspended.

There are just 10 trains boarding and discharging passengers from New York to Washington and four from New York to Boston.

Gardner said Amtrak has no plans to screen passengers for COVID-19.

“We are not qualified to undertake mass testing (and) we don’t have the ability to control who is coming on board once they purchase a ticket, but we can reinforce the good guidance that’s out there and we will work with   . . . officials to help them implement health checks should they be required,” said.

With ridership on long-distance trains down Amtrak is no longer practicing communal dining in its dining cars. Gardner said there is no need to seat passengers not traveling together at the same table.

Top Amtrak Executives to Take Pay Cuts

Amtrak said over the weekend that it is taking what it termed aggressive steps in the wake of the COVID-19 pandemic, including reducing the salaries of its top executives.

For now Amtrak CEO Richard Anderson said Amtrak will not lay off employees.

An internal memo sent by Amtrak Senior Vice President Stephen Gardner said incoming President William Flynn will not draw his Amtrak salary during the crisis.

Gardner said Amtrak faces a loss of $1 billion due to plunging bookings and widespread cancellations of existing reservations.

The intercity passenger carrier has asked the federal government for a supplemental appropriation to cover lost revenue.

The pay cuts will take effect April 1. Flynn is scheduled to replace Anderson in the CEO chair on April 15.

Amtrak will suspend its its 401(k) matching contribution for management employees through the end of the calendar year.

“We recognize these actions have a serious impact on our employees and their families,” Gardner said in the memo. “But we are taking this action to help protect everyone. We appreciate your support as we work our way through this crisis together.”

Other measures being taken by Amtrak include ending all non-safety-critical hiring; cutting discretionary travel, professional fees, and advertising spending; and deferring non-priority capital expenses.

In a dial-in town hall meeting for Amtrak workers held on Friday, Anderson said the carrier is seeking to avoid involuntary furloughs.

The carrier will meet a commitment in current labor agreements granting employees a 3.5 percent pay increase on July 1, but Anderson called for union leaders to consider delaying but not cancelling the increase until Amtrak ridership recovers.

Anderson hinted that if the unions balk at delaying the pay raise the carrier might revoke its non-layoff stance.

“General chairmen need to get engaged and figure out how to do this if we are to avoid an involuntary furlough, given that we don’t have any business anymore,” Anderson said.

“We have been through a lot of tough times with Amtrak—from host railroads that want to put us out of business, to presidents who don’t want to fund us, to [a] Congress that doesn’t always want to properly fund us, and to states and private companies that would like to take over our services,” Anderson said.

He said Acela ridership in the Northeast Corridor has fallen by 92 percent, Acela reservations are down by 99 percent and bookings for long-distance trains have declined by 64 percent.

Anderson expects those numbers to worsen as additional government imposed restrictions are placed on personal mobility.

“On 9/11, we knew specifically what the root cause of the problem was at the time, [and] the transportation system recovered fairly quickly,” Anderson said. “In this instance, we don’t have clear direction of what the end point of the coronavirus is.”

Amtrak has more than $3 billion of cash on hand but Anderson said the carrier must continue to pay operating expenses and pay interest on its existing loans.

It has halted spending on capital projects except those needed to keeping trains moving.

“By any measure, the economy is in recession,” Anderson said. “We can’t just count on Congress to close our gap.”

Saying there is no reason to operate empty trains, Anderson said Northeast Corridor service has been cut by 40 percent and 10 routes have reduced service with more service cuts coming.

Although the long-distance network will remain intact, Anderson said 40 percent of its seat capacity has been removed in the form of operating fewer rail cars.

“We need to be aggressive in preserving our cash,” Anderson said.

“I’m certain that the long-distance network will be very different longer term,” he said. “Over the past three or four years, it has taken more than $2.5 billion of federal money to keep the long-distance network operating, and if we don’t have the subsidy from the Northeast Corridor and state [supported corridor] trains bearing their share of the national network, the loss gets that much bigger.”

Anderson acknowledged that the steps Amtrak has taken are “demoralizing,” but said it would be be more demoralizing to tell people they don’t have a job anymore.

“That’s what we are working to avoid. If we just stood here and didn’t do anything, and one day in July or August we told everybody that the company was near liquidation and that we were going to lay off 10,000 or 15,000 people, that would be far more demoralizing. That would be irresponsible,” Anderson said.

In the meantime, Amtrak announced it will suspend all Acela Express service in the Northeast Corridor on Monday.

Northeast Corridor service will be covered by a schedule of Northeast Regional trains operating at 40 percent of the regular weekday schedule.

Until now Amtrak had suspended only a small number of Acela Express trains.

Acela service carried 3.5 million in 2019 of the 12.5 million ridership in the Northeast Corridor.

Other service cuts today are set to be implemented in California and North Carolina.