Leaked Memo Suggests Amtrak May Impose Restrictions in Effort to Boost Fare Revenue on Cheapest Tickets

A news report on Friday cited a leaked Amtrak internal memorandum that listed changes the passenger carrier is considering making in early 2020 to boost revenue.

These include making its lowest fares nonrefundable and nonchangeable. Other fares would be subject to a 25 percent cancellation fee and a 15 percent change fee within 14 days of travel.

The changes are similar to those that have been standard in the airline industry for several years.

A report by Business Insider, a website specializing in American business and financial news, said Amtrak is taking another page out of the airline revenue playbook by seeking to increase ancillary revenue and create more fare segmentation.

Airlines earn ancillary revenue by charging fees for such things as seat assignments and checked baggage.

The Business Insider report framed the proposed changes as part of an ongoing drive by Amtrak to turn a profit for the first time in its 48 year history.

The changes could come as soon as January although no change fees for tickets are currently shown in Amtrak’s published fare guide.

The memorandum proposed making Amtrak’s saver fares nonrefundable and nonchangeable 24 hours after purchase.

Under Amtrak’s current policies, saver fares are fully refundable up to eight days before departure. Holders of the fare can cancel their trips and receive a voucher worth 75 percent of the fare paid.

“Value” fares would be subject to a 25 percent cancellation fee and 15 percent change fee within 14 days of departure.

Amtrak does not currently impose change fees for value fares.

The Business Insider account noted that Amtrak President Richard Anderson is a former airline CEO and that several of the rail passenger carrier’s top executives also worked in the airline industry.

The report said Anderson earlier this year has said that small changes in fare structures have already helped Amtrak increase revenue.

“Pricing and revenue management was thought of like some department over in another building and we didn’t pay much attention to it,” Anderson said in September. “We’ve been able to bring some commercial instincts in and make some basic investments in revenue management technology. Nothing fancy, just basic, good, RM [revenue management] practices.”

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