Amtrak's Losses Widen in Fiscal 2015
December 02 2015 - 1:10AM
Dow Jones News
Amtrak said Wednesday its adjusted operating losses in fiscal
2015 widened to $306.5 million from the previous year's loss of
$230 million, which was its lowest in four decades.
The railroad attributed the latest losses in part to at least
$50 million in damages and lost revenue stemming from a May
derailment in Philadelphia that killed eight people, damaged
equipment and suspended service for days along its busy Northeast
Corridor between Washington, D.C., and Boston.
Amtrak also cited at least $10 million in expenses and lost
revenue related to extensive repairs to an electrical system needed
to run trains through its pair of aging tunnels under the Hudson
River between New Jersey and Manhattan.
Problems with the tunnels this summer disrupted travel for
thousands of passengers and renewed a debate over how to pay for
Amtrak's backlog of construction projects and repairs.
Excluding those extraordinary items in the 2015 fiscal year,
which ended Sept. 30, Amtrak said it was able to largely hold the
line on revenue and expenses. Ridership remained steady despite low
gas prices that can lead passengers to drive instead of boarding
trains.
"Ridership has developed a strong affinity in passenger rail,"
said Anthony Coscia, Amtrak's chairman. "We think that riders will
stay with trains even as gasoline prices drop."
Ticket revenue of $2.2 billion and ridership of 30.9 million
fell 0.1% from the prior fiscal year. Total revenue slid 0.8% to
$3.2 billion. Expenses rose 1.4% to $4.3 billion.
Amtrak's measure of adjusted operating losses doesn't conform to
generally accepted U.S. accounting standards, and excludes costs
such as depreciation.
Amtrak expects insurance to largely pay for an estimated $164
million passenger-claim liability stemming from the May crash in
Philadelphia, according to documents provided by the railroad. The
National Transportation Safety Board has been investigating why the
train was speeding through a tight curve.
The railroad's financial reports show the Northeast Corridor
generates operating surpluses, excluding capital expenses, while
its long-haul national routes generate operating losses. Ridership
on the Northeast Corridor ticked up 0.5% in fiscal 2015 to 11.7
million, while ridership on long-distance routes dipped 1.2% to 4.5
million.
Robert Puentes, a senior fellow at the Brookings Institution,
said it would be difficult for Amtrak to significantly reduce
operating losses further without a shift in how its money-losing
lines are subsidized and operated.
"The question now is what we do with the long-distance routes,"
he said.
Congress has been weighing legislation that includes a provision
to let Amtrak use the Northeast Corridor's surpluses to help
finance major capital projects, such as a new pair of Hudson River
tunnels.
Write to Andrew Tangel at Andrew.Tangel@wsj.com
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(END) Dow Jones Newswires
December 02, 2015 00:55 ET (05:55 GMT)
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