(Reuters distributed the following article by Marisa Navarro on June 12.)
WASHINGTON — Amtrak’s finances have been closer to a train wreck than a smooth ride in recent years, but the railroad has discovered a bright spot in its drive to operate more efficiently — Internet sales.
The nation’s only city-to-city passenger railroad got a lift this week when it reported $1.4 million in online bookings on Monday. It was the best single-day performance for its Internet ticketing operation, which was revamped two years ago to make it easier to use.
Since the start of Amtrak’s fiscal year on Oct. 1, the for-profit federal corporation reported that Web-based ticketing generated $218 million, or 24 percent of sales. That is a 9.6 percent jump over last year, Lenetta McCampbell, Amtrak’s director of marketing and e-commerce, told Reuters.
The site is the “lowest-cost booking channel and so Amtrak is striving to save money and we do save the company millions of dollars a year,” she said.
Amtrak has not been profitable in 30 years and is mired with nearly $4 billion in debt. It is in the midst of an austerity campaign, which has included job cuts to improve efficiency and satisfy demands by the Bush administration that it operate more like an independent business.
The Washington-based railroad survives on ticket revenues and federal subsidies, which will total $1.05 billion in 2003.
Its Web business as a percentage of overall ticket sales is similar to the portion reported by some major airlines, Amtrak’s biggest rivals.
U.S. Airways Group Inc., the No. 7 U.S. airlines, which competes with Amtrak’s flagship service for business in the Northeast between Washington and Boston, said Web ticketing accounted for 22 percent of its first-quarter sales.
Web ticketing “has definitely shown a steady rate of growth and we do anticipate it growing,” said Amtrak spokeswoman Karina Van Veen.
Like low cost airlines JetBlue Airways (Nasdaq:JBLU – news) and Southwest Airlines Inc. (NYSE:LUV – news), which have enormous success restricting online sales to their own Web sites, Amtrak passengers who want to book on the Internet must go directly to Amtrak.com.
Amtrak did not disclose savings projected from the Internet push, but Van Veen said that by increasing Web-based sales, the company has cut labor and office maintenance costs.
Keys to the success of Internet ticketing, according to Amtrak executives, are discounts, promotions and making the train service easier to use.
Amtrak carried 15.6 million people between October and June, roughly even with the same period last year.