Amtrak delivers strong financial results

Amtrak's financial performance now exceeds that of the FAA and Federal Highways. But how can we in Ohio, the nation's 7th most populous state, take advantage of Amtrak's growing success? Photo Courtesy of The Daily Progress

Amtrak’s financial performance now exceeds that of the FAA and Federal Highways. But how can we in Ohio, the nation’s 7th most populous state, take advantage of Amtrak’s growing success? Photo Courtesy of The Daily Progress

In addition to the Amtrak press release below, All Aboard Ohio notes that Amtrak revenues now cover 93% operating of costs, compared to only 80% for the Federal Aviation Administration. Federal funding provides the difference in both cases. Also, Amtrak uses mostly private sector-owned, financed rails whereas aviation and road infrastructure is almost all government-owned and financed. Federal highways are funded 49% by general taxes, a subsidy which artificially reduces the cost of driving and distorts the travel marketplace.

Currently, Amtrak’s $227 million federal operating grant in 2014 cost federal taxpayers only one-fourth as much as it did in Amtrak’s first full year ($845.46 million in 1972, inflation adjusted).

“We applaud Amtrak’s success and recognize that difficult decisions regarding operating expenditures and on-board service cuts have been made and will continue to be made,” said Ken Prendergast, executive director of All Aboard Ohio. “But we also realize that innovative actions are needed to expand into populous, albeit difficult markets like Ohio which are under-served by Amtrak.”

Innovative actions could include:

  • Working with coalitions of local and regional governments
  • Jointly pursuing station-area developments to provide new sources of value-capture revenue
  • Organizing public education efforts about rail’s benefits in concert with the Midwest’s and especially Ohio’s huge rail industry supplier base, and
  • Seeking new mail & package express business in revenue-sharing partnerships with the freight railroads.

In its latest financial report, Amtrak notes these Fiscal Year 2014 Highlights:

  • Record revenue of approximately $3.2 billion
  • Operating cost recovery rises to 93 percent
  • Lowest federally funded operating loss in 41 years
  • Moody’s confirms long-term debt rating at A1/Stable

Today, Amtrak reported unaudited record revenue totaling approximately $3.2 billion for the fiscal year ending Sept. 30, 2014, representing the fifth consecutive year of revenue growth, and the eighth out of the past nine years.

In FY 2014, America’s Railroad® covered 93 percent of its operating costs with ticket sales and other revenues, up from 89 percent the year before. In addition, Amtrak’s unaudited federally funded operating loss of approximately $227 million was the lowest level since 1973, representing a 37 percent decrease from the prior year and 52 percent lower than in FY 2007.

As a result of the company’s strong operating performance, long-term debt reductions of approximately 61 percent over the past seven years to $1.3 billion, and other contributing factors, Moody’s Investor Service confirmed Amtrak’s A1/Stable debt rating on Nov. 12, 2014.

“Our financial performance over the past year is the clearest indication yet that Amtrak’s investments, operating efficiencies and focus on its customers is paying off,” said Amtrak Chairman of the Board Tony Coscia. “Under the leadership of Amtrak’s Board and management,the company is transforming how it does business. We are delighted with our latest financial results and committed to making further progress in the years ahead. As we continue to make improvements in our operating and financial performance, we call upon the federal government and our stakeholders to support the capital investments necessary to keep moving Amtrak forward.”

“Our efforts to operate a more financially sound railroad for our stakeholders continues to exceed expectations,” said Amtrak President and CEO Joe Boardman. “Amtrak’s customer value proposition improves each year as seen by our continued ridership and revenue growth for the better part of the past decade.”

Amtrak’s corporate restructuring has resulted in a strong emphasis on increased financial transparency, a de-leveraged balance sheet, and providing an improved product to its existing customer base while attracting new passengers. This has resulted in consistently strong ridership and revenue growth, and less reliance on federal operating grant support.

Amtrak also is building the equipment, infrastructure and organization needed to ensure its strong growth continues. Over the past few years, the company has seen the expansion of state-supported services, the introduction of Wi-Fi and eTicketing technologies, the procurement of new equipment for Northeast Corridor and long-distance services, a major planning effort for the development of next-generation high-speed rail, and the installation of positive train control safety technology to more sections of track maintained by Amtrak, among other critical capital projects. These actions form the foundation that will support more and faster service, improve the reliability and safety of current and future operations, and meet the expectations of a growing number of customers choosing Amtrak for their travel needs.

Boardman added that to meet future passenger demands, increased levels of federal capital investment are needed to improve, expand and replace the aging infrastructure that supports intercity passenger rail. Predictable dedicated funding from the federal government to build new tracks, tunnels, bridges and other rail infrastructure—particularly on the Northeast Corridor and in Chicago—will keep Amtrak advancing and its customer base growing.

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