(Reuters distributed the following article on November 6.)
WASHINGTON — Former American Airlines chairman Robert Crandall, nominated to Amtrak’s board, on Thursday said a national railroad can survive only with meaningful help from government and will never make money.
While Crandall neither embraced not dismissed a Bush administration plan to restructure Amtrak, he did tell Senate lawmakers at his confirmation hearing that a clear federal mandate, government oversight and a steady source of funding were essential to its long-term survival.
“We (board members) have the responsibility to make sure those funds are spent in a businesslike way. They should be spent efficiently. Every dollar should be accounted for and we should tell you the truth,” Crandall said. “In that sense, it is a business. But in terms of whether it is profitable — passenger rail is not, and will not, and cannot be profitable.”
Amtrak, which could receive more than $1 billion in subsidies for the second straight year, is a huge money loser despite improved ridership on many routes.
The Bush administration has proposed to dismantle Amtrak over time and give states a stake in underwriting and providing service. The federal government would still oversee the system, which may or may not encompass the entire country, and could involve private firms operating some routes.
The push for Amtrak reform has also included an overhaul of the railroad’s board. Replacing appointees made up largely of state and local government officials, the White House has selected members with extensive managerial and big business experience.
In addition to Crandall, international rail reform expert and former Transportation Department official Louis Thompson and former Kmart chairman Floyd Hall are expected to easily win Senate confirmation.
While Crandall dismissed the money making prospects of rail, he, Thompson and Hall said a national system was worthwhile and the nation could afford it.
Crandall said rail between some cities could be an important alternative to airlines where he rose to prominence as a bare-knuckles chief executive who in the 1980s and ’90s oversaw American’s transformation from a mainly regional carrier to a global powerhouse.
He said a more reliable high-speed train service between Washington and New York could be good for rail as well as aviation. For instance, concentrating on necessary improvements for tracks, tunnels and wiring to enable Amtrak’s high-speed Acela to run consistently faster could ease pressure on airports like LaGuardia to expand, allowing airlines to concentrate on lucrative long-distance flights.
“Let’s spend some money to fix the tracks and save some money on airports and allow the airlines to use their planes in more productive ways,” Crandall said. “The net benefits might be very favorable.”