Posts Tagged ‘Richard Anderson’

Amtrak Long-Distance Trains Safe for Now But Anderson Still Wants Permanent Cut in Network

March 24, 2020

Although Amtrak President William Anderson has said the long-distance network of trains will stay in place for now, he continues to argue that it needs to be reduced.

Richard Anderson

Anderson sent that message last week during an online town hall meeting with Amtrak employees.

He did note that Amtrak is cutting the capacity of long-distance trains by 40 percent of seat miles.

That has resulted in some trains operating with reduced consists including a four-car Capitol Limited.

If Congress fails to grant Amtrak emergency funding to cover revenue losses triggered by a massive downturn in ridership and revenue in the wake of the COVID-19 pandenic, Anderson said there are contingency plans in place “to further reduce the network to match capacity to demand.”

Later in the town hall Anderson reiterated a comment he’s made often that some parts of Amtrak’s national network need to be permanently discontinued.

“And given the amount of cash burn we have, I’m certain the long-distance network is going to be very different longer term,” he said. “We’d like to avoid it, but if we can’t get the kind of funding out of Congress that we need, then we need to face that issue and will have a contingency plan to do that. But that will be only a worst-case scenario because we don’t want to furlough employees.”

During the town hall session Amtrak said Amtrak has slashed capital spending from a planned $2 billion to $1 billion by focusing only on necessary “state-of-good repair” work.

Management salaries will be cut by 22 percent to 7 percent with the reductions falling as pay grades decrease.

The incoming Amtrak president, William Flynn, has agreed to forego his annual salary. He will take over for Anderson on April 18.

Amtrak has suspended its 401K retirement program match and is asking non-union employees to take voluntary time off or reduce their weekly hours to 32 per week.

An analysis of Anderson’s comments by Trains magazine said that his assertion that it takes $2 billion “over two and a half years  . . . to keep the long-distance network operating” is suggesting that expense would vanish if those trains were discontinued.

Trains said that figure is a largely allocated expense figure that Amtrak uses to to imply that they are avoidable costs.

That has been challenged by various rail passenger advocates and elected officials on routes served by those trains.

Before the pandemic began, Anderson said Amtrak had been “running 91 percent above plan” for fiscal year 2020, which ends in late September.

Overall ridership and revenue had been up by 6.5 percent.

But with both now plunging, Anderson said full year revenues are projected to be down $1 billion and Amtrak projects a $840 million loss even with expense reductions of $110-$150 million.

Top Amtrak Executives to Take Pay Cuts

March 23, 2020

Amtrak said over the weekend that it is taking what it termed aggressive steps in the wake of the COVID-19 pandemic, including reducing the salaries of its top executives.

For now Amtrak CEO Richard Anderson said Amtrak will not lay off employees.

An internal memo sent by Amtrak Senior Vice President Stephen Gardner said incoming President William Flynn will not draw his Amtrak salary during the crisis.

Gardner said Amtrak faces a loss of $1 billion due to plunging bookings and widespread cancellations of existing reservations.

The intercity passenger carrier has asked the federal government for a supplemental appropriation to cover lost revenue.

The pay cuts will take effect April 1. Flynn is scheduled to replace Anderson in the CEO chair on April 15.

Amtrak will suspend its its 401(k) matching contribution for management employees through the end of the calendar year.

“We recognize these actions have a serious impact on our employees and their families,” Gardner said in the memo. “But we are taking this action to help protect everyone. We appreciate your support as we work our way through this crisis together.”

Other measures being taken by Amtrak include ending all non-safety-critical hiring; cutting discretionary travel, professional fees, and advertising spending; and deferring non-priority capital expenses.

In a dial-in town hall meeting for Amtrak workers held on Friday, Anderson said the carrier is seeking to avoid involuntary furloughs.

The carrier will meet a commitment in current labor agreements granting employees a 3.5 percent pay increase on July 1, but Anderson called for union leaders to consider delaying but not cancelling the increase until Amtrak ridership recovers.

Anderson hinted that if the unions balk at delaying the pay raise the carrier might revoke its non-layoff stance.

“General chairmen need to get engaged and figure out how to do this if we are to avoid an involuntary furlough, given that we don’t have any business anymore,” Anderson said.

“We have been through a lot of tough times with Amtrak—from host railroads that want to put us out of business, to presidents who don’t want to fund us, to [a] Congress that doesn’t always want to properly fund us, and to states and private companies that would like to take over our services,” Anderson said.

He said Acela ridership in the Northeast Corridor has fallen by 92 percent, Acela reservations are down by 99 percent and bookings for long-distance trains have declined by 64 percent.

Anderson expects those numbers to worsen as additional government imposed restrictions are placed on personal mobility.

“On 9/11, we knew specifically what the root cause of the problem was at the time, [and] the transportation system recovered fairly quickly,” Anderson said. “In this instance, we don’t have clear direction of what the end point of the coronavirus is.”

Amtrak has more than $3 billion of cash on hand but Anderson said the carrier must continue to pay operating expenses and pay interest on its existing loans.

It has halted spending on capital projects except those needed to keeping trains moving.

“By any measure, the economy is in recession,” Anderson said. “We can’t just count on Congress to close our gap.”

Saying there is no reason to operate empty trains, Anderson said Northeast Corridor service has been cut by 40 percent and 10 routes have reduced service with more service cuts coming.

Although the long-distance network will remain intact, Anderson said 40 percent of its seat capacity has been removed in the form of operating fewer rail cars.

“We need to be aggressive in preserving our cash,” Anderson said.

“I’m certain that the long-distance network will be very different longer term,” he said. “Over the past three or four years, it has taken more than $2.5 billion of federal money to keep the long-distance network operating, and if we don’t have the subsidy from the Northeast Corridor and state [supported corridor] trains bearing their share of the national network, the loss gets that much bigger.”

Anderson acknowledged that the steps Amtrak has taken are “demoralizing,” but said it would be be more demoralizing to tell people they don’t have a job anymore.

“That’s what we are working to avoid. If we just stood here and didn’t do anything, and one day in July or August we told everybody that the company was near liquidation and that we were going to lay off 10,000 or 15,000 people, that would be far more demoralizing. That would be irresponsible,” Anderson said.

In the meantime, Amtrak announced it will suspend all Acela Express service in the Northeast Corridor on Monday.

Northeast Corridor service will be covered by a schedule of Northeast Regional trains operating at 40 percent of the regular weekday schedule.

Until now Amtrak had suspended only a small number of Acela Express trains.

Acela service carried 3.5 million in 2019 of the 12.5 million ridership in the Northeast Corridor.

Other service cuts today are set to be implemented in California and North Carolina.

Flynn’s Success Will Hinge on His Political Skills

March 2, 2020

It remains to be seen what, if any, changes will result from the installation of William Flynn as Amtrak’s next president and CEO next month.

Like the lumbering Boeing 747s that Flynn’s soon to be former company Atlas Air flies in cargo service, Amtrak is not something that can be turned around quickly or rapidly raced upward to cruising altitude after takeoff.

No doubt some rail passenger advocates are happy to see Richard Anderson leave although he’ll continue as an adviser to Flynn through the end of the year.

Anderson at times showed an abrasive personality that made him a lightning rod of criticism.

Perhaps that was what the Amtrak board of directors thought was needed in 2018 but it may have decided that in 2020 a kinder, gentler CEO is needed.

The news release announcing Flynn’s hiring contained the type of laudatory language that is standard in public relations products announcing personnel changes.

There were a lot of words that didn’t say much of substance.

It gave little indication about what role Flynn sees for Amtrak as a transportation provider.

The release tried to portray Flynn’s hiring as a planned succession although that might be boilerplate language that means little.

Anderson’s leaving had been foreshadowed in a Wall Street Journal article earlier this year yet the Amtrak board of directors had not given any public signals that Anderson’s departure was imminent.

Nor has the Amtrak board in public expressed any concerns or discontent with how Anderson has managed the passenger carrier.

The news release and a statement sent to Amtrak employees were filled with the type of self-congratulatory statements about how ridership is up and finances have improved.

Amtrak has hinted at breaking even this year on an operating basis which should be not confused with making a profit, something that has never happened in the company’s 48-year history.

More than likely Flynn was hired because of his executive experience rather than his views of the role of rail passenger service in the United States.

If asked, he’ll say all the right things about how the future of rail service is bright.

But I would be surprised if Flynn’s hiring means that certain things that have been lost during the Anderson regime, such as full service dining cars on the Capitol Limited and Lake Shore Limited, will make a comeback.

Don’t expect the new rules Amtrak just implemented to make it tougher to get refunds or change your travel plans to go away.

Private car owners and those wishing to charter an Amtrak train probably won’t see significant changes in Amtrak rules and policies.

In short, I don’t look for Flynn to herald the second coming of W. Graham Claytor Jr.

It may be that Amtrak’s directors decided Anderson had become too toxic on Capitol Hill to win the type of budgetary and policy victories that Amtrak is eyeing.

The passenger carrier has an ambitious legislative agenda that is tied in with a new surface transportation bill that Congress needs to pass to replace the one that expires on Sept. 30.

Among other things, Amtrak wants funding to establish new corridor-oriented services, laws that would gives it a stronger position when talking with his host railroads about on-time performance, and capital funding for new equipment and infrastructure.

There had been speculation earlier that Anderson’s replacement would be current Amtrak senior vice president Stephen Gardner.

Instead, Amtrak’s board hired another airline executive. Flynn has four decades of transportation industry experience but it is worth noting that he has spent his career in the private sector.

Such Amtrak heads as David Gunn and Joseph Boardman had experience in the public sector.

Amtrak may on paper be akin to a private company, but given its reliance on public funding it has much in common with a non-profit agency even if it tries to operate like a private company.

Ultimately, what is important is that Amtrak’s CEO understands not just how railroads operate but how to play the political games inherent in being an entity that has two boards of directors – the one that hired you and the members of Congress who control your funding and so much about the environment in which your company operates.

Amtrak to Get New CEO on April 15

March 2, 2020

Amtrak will get a new president on April 15 and the passenger carrier has again dipped into the airline industry executive ranks.

William Flynn

William Flynn, who will replace Richard Anderson, is currently CEO of Atlas Air Worldwide but once worked as an executive at CSX.

Flynn’s appointment was announced late Monday morning after the news was broken by The New YorkTimes.

An Amtrak news release said Anderson, 64, a former CEO of Delta Air Line and Northwest Airlines, will continue at Amtrak as a senior adviser through the end of the year.

Flynn, 66, will be the third time Amtrak president and CEO in just over three years.

Charles “Wick” Moorman, the former CEO of Norfolk Southern, stepped down on Dec. 31, 2017 and Anderson, who had been co-CEO of Amtrak with Moorman since July 2017.

Moorman had joined Amtrak on Sept. 1, 2016. He replaced the late Joseph Boardman.

Flynn held several positions at CSX between 2000 and 2002, including the post of senior vice president of strategic planning and senior vice president at CSX Transportation.

He also held senior management positions at CSX subsidiary Sea-Land Services.

Atlas has three carriers, Atlas Air, Polar Air Cargo and Southern Air. It has 3,200 employees and operates in 89 countries.

It carries air freight and operates military and passenger charter flights.

Flynn has been at Atlas for 13 years and has four decades of transportation and logistics experience

One of Atlas’ customers is Amazon. News reports indicate that Atlas has has been embroiled in tense labor negotiations with its pilots over the past three years.

The Wall Street Journal reported that Flynn’s Amtrak salary will be $475,000 and he is expected to serve as CEO for five years.

That is relatively small amount compared to the $6.9 million in compensation, including base pay and bonuses, which Flynn earned at Atlas in 2018.

Flynn received his undergraduate degree from the University of Rhode Island and a master’s degree from the University of Arizona.

Amtrak Sends Its FY2021 Funding Wish List to Congress

February 22, 2020

Amtrak has submitted its wish list to Congress, which includes funding in fiscal year 2021 of $1.33 billion for the National Network and $714 million.

The passenger carrier also is seeking $300 million to develop new corridors and contains various capital requests to cover the costs of replacing diesel locomotives and rebuilding passenger cars used on long-distance trains.

The carrier said it is “on track to achieve operational breakeven in FY2020.”

What Amtrak is seeking is far below what the Trump administration has proposed that it receive.

The administration’s budget request for FY2021 seeks $936 million for Amtrak, which the carrier notes is a 53 percent cut in the $2 billion funding it received from Congress for FY2020.

Amtrak said it appreciated the Trump administration’s focus on expanding intercity rail passenger service to underserved cities and corridors, but the carrier said that if its funding falls to what has been proposed by the administration that would “have significant negative impacts on vital capital projects and initiatives across Amtrak’s network and put at jeopardy the Corporation’s continued strong financial and operating performance.”

The budget request contains $4.9 million for Amtrak’s share of the rebuilding of the track used in Kansas, Colorado and New Mexico by the Chicago-Los Angeles Southwest Chief.

The Rail Passengers Association said its review of the Amtrak’s budget request found that the carrier is seeking $2 billion toward replacement of Superliner and Amfleet II equipment, which is used most of the time for long-distance trains, and $1.5 billion for the replacement of locomotives used in the national network.

Amtrak is also seeking $510 million for equipment that would be used in new corridors.

Although the budget request does not name any specific new corridors that Amtrak wishes to develop, it gives some detail about how the carrier proposes to fund those services.

Amtrak would fund up to 100 percent of the initial capital costs to develop new corridor services.

Operating and ongoing capital costs would be funded on a sliding scale over the next five years ranging from 100 percent by Amtrak in the first two years to 50 percent in the fifth year.

State support would begin in the third year at 10 percent, increase to 20 percent in the fourth year and 50 percent in the fifth year.

The budget document said these shares are of fully-allocated operating losses and capital costs.

After the fifth year of operation the expenses of a corridor would become subject to the terms of Section 209 of the Passenger Rail Investment and Improvement Act which requires that routes of 750 miles or less must be state-supported routes.

As for when Amtrak will begin to identify the emerging corridors, the budget request said that process will begin within one year after the date of enactment of Amtrak’s reauthorization.

The FAST Act that authorizes Amtrak expires on Sept. 30. Although Congress may adopt a new surface transportation authorization law by that date, some observers have suggested lawmakers may extend the existing authorization via a continuing resolution as they continue to hammer out the contentious political issues surrounding a new transportation authorization law.

That means a new authorization could be pushed into 2021.

Amtrak said in its budget request that once it has been reauthorized, it will consult with state departments of transportation, local municipalities, host railroads, and other stakeholders.

Those conversations will lead to the development of plans that Amtrak will submit to the U.S. Department of Transportation as well as the House and Senate authorizing committees for high-potential corridors.

Amtrak said that at that time it will show proposed routes, schedules and frequency of service information. It will also provide estimates of ridership, revenue and capital investment requirements.

“Amtrak shall consider market conditions, stakeholder funding commitments, public subsidy per passenger, and host railroad cooperation when selecting routes,” it said.

It is noteworthy that the budget request said Amtrak may (emphasis added) cover up to 100 percent of the capital costs needed to launch a route.

It will negotiate memorandums of understanding with state sponsors and, presumably, those negotiations will involve capital costs to be contributed by the states.

“As the nation’s passenger rail provider, Amtrak takes a system-wide lens to these investments to ensure efficiencies in operations, procurement, and supporting services,” the budget document said.

It is likewise noteworthy that the budget request in describing the new corridors program does not say per se that these corridors are intended to replace the long-distance trains.

At the same time, the budget request does not specifically say, as does the Trump administration FY2021 budget request does, that long-distance trains should be phased out in favor of new corridor services.

It does say that the funding being requested for new corridors is intended to supplement the funding requests for the Northeast Corridor and national network in FY2021.

That appears to be a way of saying that Amtrak will put off for at least another fiscal year the matter of carving up the long-distance routes into a series of corridor services.

The Amtrak budget request seeks to frame the new corridors program as an expansion of the Amtrak network and uses such language as the need to provide efficient and effective service.

It also repeats the boilerplate language that Amtrak President Richard Anderson has been espousing about the need to keep up with a changing and evolving transformation of population, demographic and travel needs.

Amtrak’s budget request can be found at https://www.amtrak.com/content/dam/projects/dotcom/english/public/documents/corporate/reports/Amtrak-General-Legislative-Annual-Report-FY2021-Grant-Request.pdf

Congressman Prodding Anderson over Food Service

February 15, 2020

A Tennessee congressman is demanding that Amtrak provide “accurate and credible evidence” that Amtrak ridership supports its decisions to end dining car service on some long-distance routes.

In a letter to Amtrak President Richard Anderson, Rep. Steve Cohen, a senior member of the House Transportation Subcommittee on Railroads, Pipelines and Hazardous Materials, reminded Anderson of their exchange over Amtrak onboard service during a committee hearing last November.

During that hearing, Cohen asked Anderson to provide market research and customer questionnaire responses that led to the changes.

Cohen said in a news release that Amtrak provided only “some vaguely worded surveys in which customer food service preferences, and an assessment of food service options, were not sought.”

During that hearing Cohen also dredged up a grudge that stemmed from Anderson’s time as CEO of Northwest Airlines.

Cohen reminded Anderson that at an April 2008 hearing of the House Judiciary Committee’s Subcommittee on Antitrust, Commercial and Administrative Law, he testified that Memphis would retain its hub and its non-stop flight to Amsterdam after its merger with Delta Air Lines.

However, after the merger, Delta shut down the Memphis hub and ended the Amsterdam flight. Anderson went on to serve as Delta’s CEO.

Illinois Lawmakers Continue to Prod Anderson

January 28, 2020

An Illinois U.S. Senator who described a $25,000 fee that Amtrak sought to impose on a group of wheel chair travelers is continuing to demand that Amtrak change its policies.

Senator Tammy Duckworth along with the other senator from Illinois, Richard Durbin, and U.S. Rep. Jesús Chuy have written to Amtrak President Richard Anderson to ask that the passenger carrier review and improve its disability and accessibility policies, create a new position on its  executive leadership team and work with Congress to establish a new seat on the Amtrak board of directors to be filled by a member of the disability community.

The letter was written after the passenger carrier backed down from the fee, which was to cover the costs of removing seats from a passenger coach to accommodate the five members of a group who use wheelchairs who were traveling from Chicago to Normal, Illinois, to attend a conference.

“The time has come for Amtrak to hold itself accountable for making intercity passenger rail readily accessible to all Americans,” the Illinois lawmakers said in the letter.

“Amtrak’s decision to shift accommodation costs onto disabled commuters undermined trust with loyal customers and damaged the Corporation’s brand. We support your decision to reconsider and end the existing policies and practices that led to the unlawful initial charge to these commuters.”

The lawmakers said they hope that the controversy over the fee “will serve as a turning point in the long-standing effort to make sure Amtrak customers with disabilities can travel as seamlessly as any other passenger on the national network.”

The letter was sent to Anderson on Monday.

The Tennessee Passenger Expansion Waltz: A Serious Proposal or Just a Talking Point for Public Consumption?

January 18, 2020

The news this past week that an Amtrak executive spoke to a Tennessee legislative transportation committee is being seen by some as the first tangible step that Amtrak is moving to seek to implement a vision that CEO Richard Anderson has been articulating for more than a year.

Anderson and Amtrak senior vice president Stephen Gardner have spoken in interviews and occasional appearances about transforming Amtrak’s route network to one more focused on corridor service between urban centers, particularly growing metropolitan areas.

They repeatedly have hammered home the point that many of the nation’s fastest growing cities are unserved by Amtrak or underserved by trains arriving at inconvenient hours.

Such talk has alarmed many rail passenger advocates who see is as code language that means dismantling the carrier’s long-distance routes.

Indeed Anderson and Gardner have been bad mouthing long-distance trains, saying they lose money and could be restructured into the type of corridor services they have described in principle.

Amtrak’s aborted efforts to truncate the route of the Chicago-Los Angeles Southwest Chief by creating a bus bridge between western Kansas and Albuquerque is often cited as Exhibit A of Anderson’s plan to kill long-distance passenger trains aside from one or two “experiential trains.”

Waltzing in Tennessee

The appearance of Ray Lang, Amtrak’s senior director of government affairs, at a meeting of the Tennessee House Transportation Committee was significant for a number of reasons, but two in particular stand out.

First, it was the first time Amtrak has named a specific route that fits the criteria that Anderson and Gardner have been talking up.

That route would link Atlanta and Nashville, but Lang also talked about extending a pair of Midwest corridor trains to Memphis.

Second, it offered concrete proof that Amtrak expects state and local governments to pay for its vision of the future of rail passenger travel.

It is not clear why Amtrak chose Tennessee as the opening act for what promises to be lengthy process.

Perhaps Amtrak has quietly sounded out other states on their interest in ponying up money for new rail passenger service and we just haven’t heard about it.

Or perhaps Amtrak projects the Tennessee routes as among the most likely to succeed.

The news reports out of the Volunteer State generally portrayed a favorable reception to Amtrak’s proposals with some legislators speaking well of the prospect of rail passenger service where none exists now.

Atlanta and Nashville have never been linked by Amtrak and Tennessee’s capitol has been off the Amtrak route network since the Floridian makes its final trips between Chicago and Florida in early October 1979.

Amtrak probably viewed its road show in Nashville as a first step. It might also have been seeking to gauge the interest of Tennessee lawmakers in funding the service.

An Amtrak spokesman and CSX executive said as much.

“We are also talking to current state partners regarding how additional frequencies might be implemented,” said Amtrak spokesman Marc Magliari to Trains magazine.

“This is the first we’re seeing of this,” CSX State Government and Community Affairs VP Jane Covington said during the committee hearing.

Covington said it was her understanding that Amtrak was trying “to simply gauge the state’s interest.”

Whatever the case, nothing is imminent and there is no assurance that the routes discussed will ever operate.

There are numerous hurdles the service needs to clear starting with the willingness of Tennessee legislators to spend the money to underwrite the operating losses of the trains, which have been estimated at $3 million annually.

State and local governments also will likely be asked to advance money for capital expenditures on such things as stations.

Warning Shots Fired

Other players in the process will also play a role in whether the trains operate.

Chief among them is would-be host railroad CSX.

CSX’s Covington fired a warning shot across the bow in saying, “introducing passenger trains to heavily used freight lines will be a complex, costly process.

“And I understand that you guys are hearing from your constituents about the crowded roads, and you’re obviously looking for solutions to that. But we want to make sure you do it in a way to make sure it doesn’t backfire and divert freight off the rails and onto the highways.”

That’s another way of saying that CSX will demand some very expensive infrastructure improvements as the price of agreeing to host the trains.

More than likely the price tag for those projects will be more than state lawmakers are willing to pay for a service that Amtrak said will lose money.

Another player will be the Illinois Department of Transportation, which funds the trains now operating between Chicago and Carbondale, Illinois, that Amtrak has proposed extending to Memphis.

Amtrak spokesman Magliari said it would be relatively easy to have the southbound Saluki and northbound Illini serve Memphis because Amtrak already has crews based in Carbondale who operate the City of New Orleans on host railroad Canadian National between Carbondale and Memphis.

But what looks easy or even possible on paper may not be so in practice. IDOT will want assurance that its interests won’t be harmed in any rescheduling of the trains.

An unknown about the additional service to Memphis is whether the state of Kentucky would be willing to help fund trains that run through their state.

Looming in the background is the Sept. 30 expiration of the current surface transportation act that authorizes Amtrak funding among other things.

No one in Congress has yet released to the public a draft surface transportation bill and details about what those drafts will ultimately contain have been scarce.

“It’s going to take anywhere from 12 to 24 months to redo the surface transportation bill,” said Amtrak’s Lang in the legislature hearing.

He reiterated the rhetoric that Anderson and Gardner have been using in suggesting that without a restructuring of its route network Amtrak will wither away.

“We think this presents us an opportunity to really transform the company,” Lang said.

Magliari echoed that theme in his interview with Trains when he said the passenger carrier is engaging in outreach efforts to enlist future support from states now underserved by outlining what routes might be viable.

History Lessons

At the time that Amtrak began in May 1971, the only intercity passenger service between Nashville and Atlanta was the former Georgian of the Louisville & Nashville.

That train operated with single coach between St. Louis and Atlanta and had a travel time of seven hours between Nashville and Atlanta.

Amtrak’s Chicago-Florida route served Nashville but not via Atlanta.

The planners who set up Amtrak’s initial route network considered operating between Nashville and Atlanta but declined to do so due to difficult operating conditions, including a top speed of 40 miles per hour between Chattanooga, Tennessee, and Atlanta.

Another complication was that Amtrak would need to build a station in Georgia’s capitol city.

The Floridian was one of Amtrak’s most troubled trains and then Amtrak President Paul Resitrup said in 1977 that its future was hopeless unless it could be routeded via Atlanta.

In April 1978 Amtrak announced a preliminary plan to route the Floridian via Atlanta, but it fell apart when L&N refused to host the train, citing freight train congestion.

The Southern Railway demanded $20 million in track improvements as its price for hosting the Floridian to Atlanta.

The Floridian never made it to Atlanta before its 1979 discontinuance.

In October 1989 Congress directed Amtrak to study resuming service between Chicago and Florida via Atlanta.

That plan has the support of the Atlanta Chamber of Commerce, which hosted a conference at which then Amtrak President W. Graham Claytor Jr. said the train would only become reality with financial support from the states along the route.

That never materialized and opposition from CSX and Norfolk Southern torpedoed a demonstration route during the 1996 Summer Olympic Games in Atlanta.

Claytor was involved in another effort to revive passenger service to Atlanta in the early 2000s.

That proposal was to extend the Kentucky Cardinal to Nashville from Louisville and a test train ran over the route in December 2001.

Amtrak told CSX it wanted to extend the Kentucky Cardinal over the 181-mile route once owned by L&N and used by the Floridian.

Claytor told a congressional committee he was bending over backwards and making every effort to get passenger service to Nashville.

Apparently Claytor couldn’t bend far enough or do enough because Amtrak still hasn’t returned to Nashville.

Political Strategy

All involved have been careful to emphasize that the proposed Nashville-Atlanta service is still in the idea stage.

Much needs to happen to make this train a reality and a best case scenario is it will be four to five years – or more – before the Music City Peach or whatever name it is given appears in the Amtrak timetable.

You have to wonder just how serious Amtrak is about its vision of bringing frequent daylight service to unserved or underserved corridors linking growing metropolitan areas.

Lang said this week in Nashville, “Our route map doesn’t really reflect where the nation’s population has shifted to — places like Nashville, Louisville, Columbus and Las Vegas that we don’t serve at all.”

Those make for good talking points, but Amtrak management must know based on its experience in working with host railroads how obstinate and demanding they can be.

It also must know that asking states for money is one thing but getting it is another. Remember the Hoosier State?

The Rail Passengers Association commented on its website on Friday, “CSX is required by law to host Amtrak trains, but has the ability to price state DOTs and Amtrak out of the market if it so chooses.”

RPA, Amtrak and anyone who has paid any attention at all to the behavior of Amtrak’s host railroads knows how they have wielded that power on multiple occasions.

Rail passenger advocates by nature must put on an optimistic face so RPA also said this about Tennessee service expansion proposal: “State officials will have to act accordingly, and work to bring all stakeholder groups onboard.”

That is much easier said than done particularly given that Tennessee has never funded Amtrak service and it is not know how committed state policy makers are to seeing through what Amtrak has proposed.

Has any else noticed that no one is talking about whether the Nashville-Atlanta service will need funding from Georgia, another state that has never funded Amtrak service?

This is not to say it can’t be done, but it won’t be easy and going into this process the odds are stacked against the prospect.

Amtrak’s top management probably has convinced itself that it really can have the type of network that Anderson and Gardner keep harping about.

But are they serious? Or is this just another talking point to be used to strategic advantage to provide political cover as management goes about scuttling the long-distance trains?

Amtrak could offer its plan to, say, carve up the route of the Capitol Limited into a Chicago-Pittsburgh service funded by Pennsylvania, Ohio, Indiana and Illinois.

When that funding fails to materialize, Amtrak can say it tried to “save” service to those states but their elected lawmakers declined to pay for it.

Don’t blame us, go talk to the folks in Harrisburg, Columbus, Indianapolis and Springfield because they’re the ones who made the decision.

It remains to be seen if Amtrak is actually going to release a master plan that spells out what specific new services it envisions.

That plan, if is exists, will look impressive and get a lot of people excited just as the Amtrak road show in Tennessee did this week.

But I can’t help but wonder if it will be just another plan that winds up sitting in a drawer somewhere as Amtrak shrinks to a company with service in the Northeast and a few other state-supported corridors.

Anderson May Be Leaving Amtrak in 2020

January 3, 2020

Buried in a recent Wall Street Journal article about the challenges that Amtrak faces in 2020 was for some a potential bit of good news.

The president and CEO that many rail passenger advocates love to hate, Richard Anderson, may be leaving the company this year.

The article said Anderson’s potential departure is among the challenges Amtrak is facing this year.

Although no details were provided in the Journal article, Anderson is reported to have a three-year contract that expires this year.

Anderson, 64, a former Delta Air Lines CEO, came to Amtrak in June 2017 and for several months served as co-CEO along with the now retired Charles “Wick” Moorman.

Amtrak Chairman Anthony Coscia would not comment to the Journal about Anderson’s potential departure other than to say the passengers carrier “takes succession planning very seriously, and its ability to attract world-class CEOs also brings with it the responsibility to assure there’s continued leadership at that level.”

Whether Anderson continues to lead Amtrak through and past 2020 may not matter if the carrier continues on its current path of emphasizing the pursuit of profitability or at least break-even operation.

Amtrak has touted its fiscal year 2019 operating loss of $29.8 million as the best financial performance in Amtrak’s nearly 50-year history.

Anderson has repeatedly spoke of breaking even in 2020, although it should be noted Amtrak counts its federal funding as revenue.

The Journal article noted that some members of Congress have been critical of Amtrak’s financial strategies, saying the carrier’s overall service has suffered.

Although Anderson doesn’t give many interviews, in those that he has, including with the Journal, he has spoken about shoring up Amtrak finances as a way to gain credibility in Congress so it can ask for and receive millions if not billions of new money for capital projects, including replacement of aging tunnels and other infrastructure in the Northeast Corridor.

Amtrak’s future will be a major topic of conversation in Washington this year because Congress may act on a new multiyear highway bill that is expected to include reauthorization of the federal grant programs that fund Amtrak.

The reauthorization, which would replace the current FAST Act, may contain policy directives that govern Amtrak’s operations.

The FAST Act expires in 2020. It is a five-year surface transportation law that funds road, rail and transit programs.

The Journal article noted that some Capitol Hill observes are skeptical that Congress will be able to agree on a new transportation bill during a presidential election year.

They base that on the reality that raising the gasoline tax will be part of that discussion and many lawmakers are loath to do that.

The federal gasoline tax funds most highway construction and has not increased since 1993.

Anderson and senior vice president Stephen Gardner, who may be Anderson’s replacement if he steps down, have articulated a vision in which Amtrak downgrades long-distance routes in favor of shorter corridor services between major population centers.

Although Anderson has spoken about retaining some long-distance routes as experiential services, he has also indicated that the passenger carrier may seek congressional approval this year to experiment with restructuring at least one long-distance route.

In an interview with the Journal, Amtrak Chairman Coscia sought to frame the changes Amtrak is eyeing as a way to provide better service to underserved regions.

“What we’re after here is the person who lives in Atlanta or Charlotte, who doesn’t have train service,” Mr. Coscia said. “The person who has to wake up at 3 in the morning in Cleveland to take a train.”

Amtrak management has yet to formally release a plan for doing that although Anderson has hinted that in advance of congressional action on a new Amtrak authorization the passenger carrier will release more specific details about its plans.

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

December 14, 2019

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.”