Lower gas prices and bad weather are hurting Amtrak’s bottom line, and CEO Joseph Boardman is calling for cutbacks starting in April. Boardman is requesting cuts averaging 3.8% from Amtrak’s deparment heads and also said more significant cuts will be made later.
The average cost of gas nationwide is $2 a gallon, the lowest it has been since 2009. Boardman said this means that people are opting to drive short distances and fly long distances.
For example, at the $2-a-gallon rate, a car getting 20 miles to the gallon driving about 300 miles from Chicago to St. Louis, Mo., would use $30 in gasoline. The same one-way trip in coach on Amtrak's Northeast Regional train, would cost a passenger $91, booked that same day.
Thanksgiving, a typically busy time for rail transit, was “disappointing” according to Boardman. Amtrak ended last year with a $305 million operating loss, $70 million worse than what was projected, and anticipated an operating loss of $245 million this fiscal year, which began Oct. 1.
Cost-cutting measures will include eliminating nonessential business travel, and asking employees to conduct business by phone or video conference, if possible. Boardman also recommends delaying expensive new projects or making new hires.
The agency hopes to increase revenue and keep fixed costs low, moving further into the current fiscal year.