The CEO of perennially unprofitable Amtrak joked to Congress Tuesday that the fastest track to a financial turnaround would be to stop operating trains and instead “go into the real estate business.” But he said he has no intention of doing so.
Instead, CEO Stephen Gardner asked a congressional subcommittee on Tuesday to tolerate losses for several more years for the federally funded rail system while the company and country invest billions into improving passenger rail service.
“Financial performance is not Amtrak’s sole objective,” CEO Stephen Gardner said in his written testimony to a House Transportation subcommittee. “If it were, we would do what the Penn Central, the railroad that was the last private owner of the Northeast Corridor, did: declare bankruptcy; get rid of our obligations to maintain the infrastructure and operate passenger trains; and go into the real estate business with the property and assets we own along the corridor.”
Amtrak executives had predicted break-even in fiscal year 2020, but the pandemic and associated passenger drop interrupted that. Passenger levels are rebounding, Gardner said, but reaching the break-even milestone is at least five years away – and potentially longer because of major investments through the federal infrastructure law.
“We’re still a ways off from achieving breakeven results,” Gardner told the subcommittee.
The White House says the infrastructure law includes $22 billion for Amtrak. The company said on Monday it officially submitted applications for $8 billion to improve the busy Northeast corridor – known for the Acela service – and Long Distance Network that snakes across the country.
Amtrak is also developing new lines of service to connect fast-growing regions and growing frequencies on existing routes.
Subcommittee Chairman Troy Nehls, a Texas Republican, said Amtrak needed to prioritize its existing network over adding new routes.
“While growth is a positive trend for a company, Amtrak must prioritize its current network, including current system maintenance and upgrades, and improving safety, security, and customer service issues that have plagued Amtrak for years over expansion ambitions,” Nehls said.
