Baltimore Sun, GAO, and Amtrak’s Revenues and Losses

The Sun’s nice report on Amtrak’s relook at putting a hotel in Baltimore Penn Station was marred by this statement: “The national rail service is struggling with declining revenues and operating losses that are exceeding $1 billion annually and are projected to grow by 40 percent within four years, according to the Government Accountability Office.”
The GAO’s reference to operating losses growing 40% within four years is based on the incorrect assumption that management is doing nothing to reduce its losses. (The “exceeding $1 billion annually” phrase of course includes depreciation, which was $557.9 million in Fiscal 2005.)
While total revenues have been declining as Amtrak has exited various business, the net loss (including depreciation) declined in Fiscal years 2002, 2004 and 2005. The Fiscal 2005 net loss at $1.05 billion was 10.6% below the Fiscal 2001 loss of $1.18 billion.
Amtrak’s “passenger-related revenues” have not been “declining.” The Fiscal 2005 level actually was 3.6% above the FY 2001 level. However, Fiscal 2005 also was slightly below that of Fiscal 2004—primarily the loss of Acela Express for several months, but also the impact of Hurricanes Katrina and Rita and the discontinuance of Three Rivers and part of the Palmetto. To illustrate the importance of Acela Express, September 2005 revenues (last month of the fiscal year) actually were up 12% compared with the year-earlier month.