With ridership down 95% and losses of $700 million, Amtrak looks to pandemic's recovery phase
Amtrak is projecting losses of about $700 million this year, following a 95% drop in ridership amid the coronavirus crisis, officials said Thursday.
New Chief Executive William Flynn said it is unclear how long recovery may take, but the passenger railroad is developing a plan with several potential scenarios from "a very modest level of return through the summer" to a turnaround in the fall or into the next year.
"A clear and first view of what that's going to look like, we don't have right now," said Flynn, who officially joined the railroad last week.
"Ridership is down substantially today and that's going to continue for some time," Flynn said during a Thursday afternoon conference call with reporters. "Part of our efforts right now, and focus is to think about recovery and what does recovery look like . . . This is going to have a have a major impact on our business. We're working through analyzing what that might be and in some extent it's hard to estimate at this point."
Amtrak's research so far, Flynn said, indicates that more than half of people surveyed say it may be more than three months before they begin to travel again. The railroad is studying what a service comeback might look like, including the potential need to maintain social distancing aboard trains and adding more contactless services, he said.
Amtrak soon will be rolling out new ticket kiosks at stations that would make it easier for riders to obtain tickets, and the company and is looking at expanding options for preordering meals aboard trains and using more texting and mobile app communication to reduce passenger interactions with staff.
"What we can certainly do is mark seats available to be occupied," Flynn said, and leave others that are not available to maintain distance between riders. He said the company is also looking at continuing the strict coronavirus cleaning and disinfecting protocols when the transition to ramp up services comes to provide, "some level of assurance" to passengers.
Flynn, a seasoned business leader with decades of experience in transportation and logistics, takes over Amtrak at one of the most unsettling times in its history. Ridership has been plummeting since early March and is down 95 percent systemwide. Future bookings are also down 95 percent year-over-year
The company has reduced or suspended service on many routes across its network, implemented pay reductions and voluntary furloughs, and suspended the 401(k) match for employees through the end of the year. Flynn himself has deferred his salary. The Northeast Regional train from Boston to Virginia is operating on a reduced schedule, and the popular Acela service has been suspended.
Amtrak received just over $1 billion in federal relief money this month to keep the railroad system running and its front-line workers on the job during the pandemic. The funding, part of the bailout package approved by Congress in late March, will help offset the loss in ticket revenue, which pays for operations, including employee salaries, federal officials said.
"Continuing to provide the service is perhaps the most significant contribution that we can make at this time of crisis," Flynn said Thursday.
The pandemic comes as a major setback for Amtrak, which according to officials as recent as late February was on its way to breaking even for the first time it its history.
The railroad carried 32.5 million passengers last year, a record in the company's 40-year history, and saw significant growth in both its Northeast and state-sponsored service.
Flynn said despite the setback, Amtrak will continue to aspire to make money.
"I think it is important for us as a company to have a goal to break even or do better, and I believe we can," he said.
"The foundation was built over the last several years, the operations capability, the commitment and dedication of all of our employees . . . that foundation is still there. That foundation is solid," he said. "And I believe that as we move forward, as ridership returns, as we can trigger the network to meet the initial level of demand and plan for growth, thinking about the vital role that our company can play in our society, in mobility and in intercity transport, yes, I believe we should aspire to break even or better over the long term."
