(Reuters circulated the following article by John Crawley on March 16.)
WASHINGTON — Amtrak, under pressure to cut costs and reform its business practices, will reevaluate its 15 long-distance trains this year and could restructure that service, the railroad’s board chairman said on Thursday.
David Laney also told reporters in an interview after a Senate hearing the board probably will not name a new Amtrak president before mid-May but could consider someone from the airline industry to replace David Gunn.
Gunn, an experienced rail executive, was fired last fall after not supporting key elements of the board’s business reform plan, which is being driven by the Bush administration.
Amtrak is a for-profit federal corporation that relies on subsidies. In recent years, the Transportation Department has pushed business reforms, including cost reductions. Amtrak received $1.3 billion in subsidies this fiscal year and is requesting $1.5 billion for 2007.
Laney said the railroad has a “mixed bag” of prospects for its presidency, including “a number of potential candidates from the air industry.” He did not identify any aviation executives but said they may be appropriate due to challenges faced by airlines to restructure their operations.
In a report to the Senate appropriations subcommittee on transportation, the Transportation Department inspector general’s office said overall Amtrak service remains poor but some reforms have led to lower operating costs.
Amtrak ended fiscal year 2005 with an operating loss of $1.2 billion. But during the first four months of this fiscal year, fare increases have helped shave the loss by $49 million compared to the same period a year ago.
Mark Dayton, a senior economist with the inspector general’s office, said Amtrak has more efficient food operations. But he urged eliminating subsidies for first class sleeper service and possibly outsourcing reservation and maintenance units – like airlines have done to save money.
Laney said to make Amtrak more financially stable, the board and management will focus on long distance service. Those trains lumber across much of the country and evoke an era of rail service long eclipsed by air travel. But the routes are popular with members of Congress because they provide jobs and service for constituents and changing them has been difficult for political reasons.
On-time performance for long-distance trains averaged 41 percent last year. The poorest performing train was the Sunset Limited between Orlando and Los Angeles, posting an on-time record of 7 percent, the Transportation Department said.
“We’ve got to take the entire long distance route structure and our trains on each of these routes and put them on the table and scrub them, and decide whether they make sense from an operating standpoint – whether they are as relevant as they were 20 or 30 or 40 or 50 years ago,” Laney said.
Laney said the plan could include eliminating, restructuring or adding routes. “There is nothing, as far as I am concerned, off the table,” he said.
In 2003 years, Amtrak has eliminated one long distance train and shortened the route of another. Long distance trains are separate from those run on the flagship Northeast Corridor between Washington, New York and Boston.