Amtrak Sees Ballooning Losses as Virus Slashes Ridership by 95%

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(Bloomberg) -- Amtrak’s ridership has all but disappeared because of the coronavirus, dashing the company’s hopes of breaking even on an operating basis for the first time in its nearly 40-year history, the railroad’s chairman said Thursday.

Ridership is down about 95%, and the passenger railroad stands to lose more than $700 million on an adjusted operating basis, or possibly more, in the current fiscal year, Chairman Tony Coscia told reporters. The metric is Amtrak’s preferred method of evaluating operations, and excludes depreciation and other expenses.

“This has presented an enormous challenge to the company,” he said.

Service has been reduced by more than half nationwide to cope with cratering ridership. Some routes have been suspended, including the high-speed -- and lucrative -- Acela service between Boston and Washington.

The company has implemented cost controls and taken other steps to adjust. On trains that are operating, Amtrak is capping bookings in coach and business class cars at no more than 50% of available seats to ensure passengers can maintain social distancing, said William Flynn, the former chief executive officer of Atlas Air Worldwide Holdings Inc. who assumed the top role at Amtrak on April 15, taking over for CEO Richard Anderson.

The company is also evaluating how operations might need to adjust after restrictions end, including scheduling and customer-service operations, with touchless kiosks and order-ahead meal service on trains, Flynn said on a call with reporters.

“Part of our efforts right now and focus is to think about recovery and what does a recovery looks like, and how our operations are going to respond,” he said.

It’s a stark turnabout that illustrates just how damaging stay-at-home orders have been for travel and transportation companies.

Amtrak logged its best financial performance on record during the fiscal year that ended in September. It posted a $29 million adjusted operating loss -- its smallest ever -- while setting records for revenue and ridership. Under generally accepted accounting principles, Amtrak’s net loss was nearly $875 million.

©2020 Bloomberg L.P.

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