Posts Tagged ‘Wall Street Journal’

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.

Amtrak Eyeing Major Revamp of Its Route Network

February 22, 2019

The big news concerning Amtrak this week was a report in the Wall Street Journal that Amtrak plans to revamp its route network to emphasize new corridors, primarily in the South and West.

The Journal quoted an unnamed Amtrak official as saying: “We are undertaking a major rethinking of the national network and how we offer service on the national network. That study and planning isn’t done yet, and we aren’t prepared to announce any plans or recommendations yet—those will come in our reauthorization proposal.”

The newspaper report said the route restructuring is being prompted in part by a need to replace or retire the aging Superliner fleet devoted to most long-distance trains.

Another factor is that Amtrak must be reauthorized by Congress later this year.

Amtrak officials have been hinting for at least a year at a change in the carrier’s business focus.

During a speech in California, Amtrak President Richard Anderson described the long-distance trains as experiential.

Anthony Coscia, the chairman of the Amtrak board of directors, told the Rail Passengers Association in a meeting last May that in the long term the overall shape of Amtrak’s national network is likely due to population shifts, demographic trends and economic growth.

Coscia expressed Amtrak’s desire to develop corridor routes with strong potential for growth in unserved or lightly served areas.

Writing on the Trains magazine website, columnist Fred Frailey said the implication of the report by the Wall Street Journal is that Amtrak wants to operate daylight service between large city pairs.

Frailey quoted at length the remarks of Amtrak’s Stephen Gardner, a senior executive vice president, at the Rail Trends meeting in New York City last November.

“We’re looking at a different America. They do not live half in the city and half in the country,” Gardner said. “Now the vast majority live in major metropolitan areas. And those metro areas are shifting. The Northeast will be a net loser.

“Where growth is happening is in the South, Mountain West and West. And guess who lives in those metro areas? It’s Millennials, by far.”

Gardner went on to say that this has resulted in a mismatch between population density, transportation demand and Amtrak’s current network.

Frailey speculated that what ultimately may occur is that some of Amtrak’s long-distance routes will be split into segments operating during the daytime.

He cited the example of the Chicago-New Orleans route, which might be broken into Chicago-Memphis and New Orleans-Memphis segments.