(Reuters distributed the following story by John Crawley on August 10.)
WASHINGTON, D.C. — Airlines have regained key East Coast business lost to Amtrak after the 2001 hijack attacks, putting additional pressure on the railroad as its future grows more uncertain.
The modest turnaround for the airlines is particularly important to US Airways, which emerged from bankruptcy in March and trails Delta Air Lines (NYSE:DAL) for supremacy on Washington-New York-Boston shuttle routes. American Eagle, a unit of AMR Corp. (NYSE:AMR), has also picked up market share since launching shuttle service a year ago.
The change also reflects Amtrak’s continuing problems with its high-speed Acela trains that are partly marketed to business travelers as an alternative to air travel.
Amtrak setbacks are magnified now as Congress weighs the future of the rail line. The Bush administration recommended in recent weeks that money-losing Amtrak be dismantled over time and its healthier routes opened to competition.
Amtrak dominates travel throughout the Northeast with a daily mix of premium and coach service. But airlines have regained the edge in the lucrative New York-Washington corridor, Amtrak’s most crucial market.
Figures provided by the railroad show the airlines have climbed out of the hole they fell into immediately after the attacks when Amtrak commanded two-thirds of the air/rail market between New York and Washington for a short period.
The shutdown of air service after the attacks and the staggered resumption of flights days later created unprecedented demand for rail. Airport delays caused by upgraded security procedures and a traveling public nervous about flying also weakened air travel demand.
Amtrak’s advantage gradually eroded during late 2001 and through 2002. By January of this year, airlines had overtaken the railroad on the New York/Washington corridor. While rail figures for the remainder of the fiscal year are not available, all signs indicate the airlines held that ground going into the summer.
Air travel on that route — still off its 1999 and 2000 highs — has recorded modest growth since the attacks while rail travel has been uneven. Shuttle business between New York and Washington is up 9 percent between January and April compared to the same period in 2002, according to figures from consultants BACK Aviation of New Haven, Connecticut.
Both US Airways and Delta have restored their full schedule of shuttle flights after reducing them earlier this year. American Eagle has about 9 percent of the market. Delta has nearly half the Washington/New York business and US Airways just over 40 percent.
For April through June 2003, ridership on Amtrak’s high-speed Acela and Metroliner trains was off a combined 17 percent along the New York/Washington corridor. Eighty percent of trips on Acela are for business, Amtrak said.
The railroad’s woes are compounded by continued reliability problems with high-speed trains, which Amtrak spokesman Dan Stessel blames on equipment and infrastructure problems.