Amtrak’s pandemic recovery
Amtrak’s steps (and missteps) to recover from pandemic
“YOU GOT THE LAST ONE,”
advised the Amtrak reservation agent, explaining why, a month in advance of an early June trip, the company was charging $793 for a Houston-Los Angeles roomette on Amtrak’s Sunset Limited.
“What about a roomette in the transition sleeper?” I asked. “We aren’t running that car,” the agent said.
Riding coach from New Orleans to Houston knocked $125 off the full-route roomette price, at the cost of missing out on a forgettable “flexible dining” bowl lunch available only to sleeper passengers. These too-familiar entrees were introduced in 2019 on long-distance trains east of the Mississippi, except Auto Train. They spread to western Superliner-equipped overnighters in July 2020 for pandemic-related reasons: the meals required less on-board staff to prepare, and were easily transportable back to private rooms, where many travelers preferred to eat.
DINING-CAR MEALS RETURN
But vaccinations helped fuel an alreadystrong long-distance ridership and revenue resurgence. And lawmakers, preparing to write Amtrak’s next five-year authorization, took note as federal assistance prescribed restoration of furloughed workers’ jobs, and customers complained about onboard food. So management began to react. Soon after that journey, which also included trips on the City of New Orleans, Pacific Surfliners, San Joaquins, Capitol Corridor, Coast Starlight, and Cascades, Amtrak reintroduced “traditional” dining-car meals on the Sunset, Starlight, Empire Builder, California Zephyr, and Southwest Chief.
“This is a step above where I thought we would go, especially with the direction we were going,” Chef Frank Villasenor says in the kitchen of the Chief departing Chicago on July 22, one month after the changeover. “The freshness and quality of our product is vastly superior and preparation is more intensive” than what dining cars offered before COVID-19 swept it away.
Food Specialist Brian Garrigues recalls preparing trays of salads in advance. “Now,” he says, “if someone wants a salad as an appetizer, it is tossed to order with dressing, greens, grape tomatoes, and baby Brie cheese.” As the rockets through western Illinois, the chef grills a flat iron steak, prepares chicken with wild mushroom risotto, plates Atlantic salmon with a beurre blanc sauce, and serves up pesto cream tortellini for the diners upstairs.
“Before, chicken and steaks were our best sellers,” says Villasenor. “Now it’s a combination of all the entrees, and a lot more desserts and appetizers going out.”
One of the appetizers, the lobster crab cake, proved popular enough that it migrated to the Northeast Corridor’s Acela First Class menu when an upgrade on that service was announced in August.
If dining cars aren’t sufficiently staffed,
it is difficult to accommodate passengers from an additional sleeping car or coaches. This was the case when the Empire Builder operated with two Portland sleepers, two Seattle sleepers, and a transition car. On a westbound 2019 trip, no one from the coaches could get a dinner reservation once the train left Milwaukee.
Amtrak says the decision to keep “flexible dining” on its eastern trains will be revisited once the western full-service operations are evaluated. New dishes and glassware are on order that promise to enhance service while eliminating tons of disposable waste nationwide. And officials say coach passengers, banned from dining cars under the “flexible” format, someday may be able to purchase food there. Whether that’s sit-down, take-out, or atseat service remains to be determined.
But the company must first address more pressing issues resulting from resource-management decisions it made during the pandemic.
REDUCED CAPACITY
Emergency funding legislation compelled Amtrak to return to daily operation the 12 long-distance trains reduced to triweekly departures the previous October. It restored daily service over a three-week period in late May and early June. Travelers quickly pounced to reserve space, which was mostly available on the four days each week when trains hadn’t been operating. In a brief “flash sale” the next month, Amtrak offered $50 maximum (or 50% off) oneway coach fares through mid-November.
Yet long-distance and state-supported service around the country rapidly began selling out, even after 50% coach capacity restrictions were lifted at the end of May. That’s because, despite COVID-19 funding intended to maintain Amtrak’s readiness to capture revenue when the pandemic ended, management failed to adjust equipment availability plans, leaving it unprepared.
Amtrak’s initial estimates for the fiscal year beginning Oct. 1, 2020, mistakenly assumed travelers would abandon longdistance trains, so the company sidelined equipment to save costs. Keeping cars and locomotives active requires federally prescribed periodic maintenance on brake systems and running gear, along with sufficient mechanical forces to conduct inspections. Why incur those expenses if riders weren’t expected?
Dozens of Superliner and Amfleet II coaches, sleeping cars, diners, and Sightseer Lounges that had been in regular use were placed in semipermanent storage. Meanwhile, trains where coach and sleeping-car capacity had been sharply reduced experienced consistent fall and winter sellouts. Amtrak was thus not able to sell tickets to people who wanted to travel but were discouraged by sold-out conditions or high fares for the last available seats or rooms.
For instance, an additional sleeping car was belatedly added to each shortened
Capitol Limited — already stripped of its transition sleeper and Sightseer Lounge — during the Christmas-New Year season. Yet its two coaches continued to sell out on some intermediate segments, blocking patronage from travelers wanting to take longer trips.
The fact long-distance trains’ ridership and revenue was consistently outperforming the fiscal 2021 operating plan should have triggered stepped-up maintenance to return more cars to service later in the year. That didn’t happen, and there were other factors.
Larry Chestler, Amtrak’s vice president of the long-distance service line, tells Trains, “We made some difficult decisions during the pandemic to postpone overhaul work on a broad set of railcars, to delay incurring materials costs and acknowledging labor availability challenges also driven by the pandemic.”
Amtrak had sidelined so much equipment and furloughed so many employees
that it was unable to respond when opportunity knocked.
This helps explain why that June Sunset
Limited had no roomettes a month in advance. Previously, five rooms in the transition sleeper were occupied by the onboard service crew, leaving up to eight roomettes for paying passengers. Without that car, space was reserved for the crew in one of the regular sleepers. That’s a potential loss of revenue from 13 roomettes per trip — or 78 per week — on the triweekly Sunset alone. The amount of missed income becomes staggering when a look at systemwide operations in 2021 shows 66 revenueproducing cars (including baggage cars, which generate funds with fees for such items as bicycles) withdrawn from the seven long-distance Superliner-equipped trains, compared to consists in summers 2019 and 2020 (see table, page 16). The City
of New Orleans was spared because host railroad Canadian National requires Amtrak trains to have a minimum of 32 axles until a signal shunting issue is resolved.
Regular sellouts and high fares do not signify good resource management if a company has the ability to add capacity, thereby attracting more customers at a lower price. The “ticket revenue per rider” metric, tracked by route on internal Amtrak reports, is meaningless if maximizing it leads to lower overall sales. Direct costs such as fuel, maintenance, and staffing rise when a car or locomotive is added. More nebulous are overhead and other allocated costs charged against a route, used in calculating its operating loss [see “Amtrak’s Money Mystery,” January 2019]. These shouldn’t figure in the decision to add capacity.
WINNERS AND LOSERS
The company’s inability to deploy sufficient equipment has accelerated a departure from offering similar onboard amenities on all long-distance trains.
Initially, Amtrak’s decision to restrict sales to 50% of capacity to comply with health protocols created a better environment for coach travelers. Instead of being forced to fill every seat, passengers were allowed to spread out throughout the train.
But once daily operation returned and those restrictions were lifted, reduced passenger-car availability significantly detracted from the onboard experience. The withdrawal of Sightseer Lounges from the
Capitol Limited and Texas Eagle is particularly impactful, since those trains have also been hit with substantial sleeping car and coach cuts.
How is patronage affected? Consider Trains’ analysis of six months of Texas
Eagle data. With only one Superliner coach and a coach-baggage car south of St. Louis, the train had numerous sellouts between Little Rock, Ark., and St. Louis, and even between Dallas and the next stop to the east, Mineola, Texas. Even when a St. Louis-Chicago coach is added, sold-out conditions days before departure preclude additional ticket sales for longer trips.
Dr. Bill Pollard, a Little Rock-area dentist and chairman of the Texas Eagle
Marketing and Performance Organization, was permitted by Amtrak to manage Eagle sleeping-car pricing and inventory nightly for 19 years, before then-CEO Richard Anderson insisted the task revert to paid Washington, D.C., staff in 2018. Having developed a hands-on understanding of the
Eagle’s market potential, Pollard has urged Amtrak to restore the Sightseer Lounge and add a third Chicago-San Antonio coach. In a May email to Amtrak management, Pollard wrote, “The absence of the Sightseer Lounge car reduces the Texas Eagle to a second-class train ... it provides travelers on longer trips a place to relax other than their room or coach seat, [is available for] overflow seating in cases where standee conditions might otherwise occur, and the upper level can be regularly utilized to accommodate short-distance, school-group moves, thus building a constituency of the next generation of train traveler without adversely impacting coach inventory.”
Amtrak’s Chestler tells Trains, “We have a number of routes on which we’d gladly deploy more equipment if it were available. We are working hard to put to use all available equipment, which drove the addition of [a second] Seattle sleeper on the Empire Builder at the beginning of July ... We will continue to restore more equipment to service-ready status in fiscal 2022 [beginning Oct. 1, 2021] which will allow for expanded deployment of equipment to the long-distance network.”
Chestler confirmed that the last two of 25 Viewliner II sleeping cars have been delivered. Although some are now running on the New York-Florida trains and Lake Shore
Limited, he declined to provide specifics as to which trains would now get Viewliner II diners, Sightseer Lounges, or a net increase of sleepers and coaches.
Additional capacity can’t come soon enough. Even with reduced consists, the 15 long-distance trains in June 2021 generated $45.9 million in ticket revenue, off only 4% from the same month in 2019. That was more than the $44.7 million all Northeast Corridor trains contributed, down 61% from the pre-pandemic year’s revenue.
NO TIMETABLES
Passengers wishing to ride Amtrak’s regional trains experienced a wide array of frequency-restoration decisions. These were dependent on local health restrictions, uncertain state budgets, and concerns by regional operators about Amtrak charges for operating and equipment costs at various service levels. North Carolina, which owns and maintains its Piedmont passenger cars and locomotives, was the first state operator to bring back all of its pre-pandemic service, fully restoring Charlotte-Raleigh, N.C., round trips in April 2021. Maine’s and the Wiscon
sin-sponsored Hiawathas followed the next month; Illinois and Vermont brought back full schedules in July.
But except for an initial burst of printable long-distance train timetables when triweekly service began in October 2020, Amtrak has declined to publish all-station, downloadable schedules as service gyrations occurred, either for its Northeast Corridor or regional routes. By June 2021, full schedules had been withdrawn from all but a few state-supported services, and these are only accessed through the “destinations” portion of Amtrak’s website, not under “schedules.”
The company contends queries to the Amtrak.com booking system or the Amtrak smartphone app displays not only show accurate departure choices to a prospective customer, but provide data giving the percentage of coach seats sold for each train. Whether that will continue to be relevant when all trains show a 90% sellout and pandemic issues recede is debatable.
To use Amtrak’s “schedules” tab, prospective customers must know the origin and destination — a potential problem for first-time rail travelers. They will see an array of departure and arrival times, but can only view 10 intermediate stops on one train at a time. It’s no wonder that on that June trip, an attendant posted a Coast
Starlight schedule on the wall of his sleeping car, just to let his passengers know where and when the train would stop.
Attracting travelers who have never used Amtrak and may not know the nearest station has always been a challenge. Since the company eliminated regional marketing staffs in 2018, the effort has devolved to little more than cryptic social media posts. Though management has been touting corridor expansion, the lack of timetables to help show travelers how to use existing services illustrates the lack of focus on revenue growth. It’s ironic Amtrak has widely distributed maps showing plans to add service by 2035 through its “ConnectsUS” initiative, but insists schedules showing stations it already serves, and the times trains leave, are an unnecessary anachronism.
The claim that “people don’t want that” is disguised cost-cutting, recycling the hollow reason management gave for the switch to “flexible” dining on eastern trains.
COMPARTMENTALIZED INCENTIVES
Why has an intense obsession with driving down costs led to the elimination of timetables and left Amtrak unprepared to earn more revenue? Many company insiders point to the annual Short Term Incentive bonus system approved by the Amtrak Board of Directors in 2015 and implemented during the final years of CEO Joe Boardman. It features compartmentalized incentives based on managers’ ability to “achieve or beat” metrics in their department’s annual plan. When buyouts during the administrations of Wick Moorman and Richard Anderson led to the exit of individuals with the institutional knowledge of how to generate repeat business and grow revenue, most incentives became dependent on cost reduction.
Suppose the Chief Mechanical Officer — or the manager of Amtrak’s carshop at Los Angeles’ Redondo Junction coach yard — can improve the department bottom line by recommending retirement of the Coast
Starlight’s expensive-to-maintain “Pacific Parlour Car.” The 1955-vintage first-class lounges were a staple of that train’s “superior service” from the time former product line manager Brian Rosenwald made the revenue-versus-cost case to refurbish them in the 1990s. Under Amtrak’s incentive system, and with no one whose job depends on an individual train’s ability to generate revenue, there is no countervailing force to the mechanical department’s cost-cutting plan. The cars were retired in early 2018 and sold off the following year.
The emphasis on containing operating costs without accounting for their impact on revenue can affect all aspects of Amtrak operations, from choosing to pull equipment through car washers to the quality of meals served.
WHAT CONGRESS WANTS
Nevertheless, the company is making a $28 million, multiyear “customer experi
ence investment” by upgrading Superliner coach seats, carpeting, and curtains; Sightseer Lounge interiors; sleeping-car bedding and towels; and dining-car furnishings. Roger Harris, Amtrak’s executive vice president, chief marketing and revenue officer, acknowledged at a promotional event in June, “As the prices go up [with increased demand] and we’re going to charge a little more, we better do a better job of looking after” passengers.
This is welcome news to members of House and Senate committees considering oversight changes as part of the upcoming Amtrak reauthorization. For the past 50 years, the nation’s lawmakers and greeneyeshade budget busybodies have attempted any number of ways to micromanage Amtrak. Their efforts have ranged from U.S. Rep. John Mica’s misguided effort to make all food service pay for itself (he apparently never ate a free hotel breakfast), to objectives that would somehow coerce profitability and make the company perform “like a business.”
In late July, House and Senate conferees agreed on the framework for the latest Amtrak “reforms,” clearly meant to modify company priorities. These changes were all but certain to be part of the final infrastructure package and Amtrak reauthorization:
• Mission: provide reliable passenger service to reflect the needs of all passengers and maintain routes through rural communities, eliminating cost-reduction references from the mission statement.
• Board of directors: must include eight individuals, from geographically diverse regions, with a record of support for national intercity passenger rail service. Both House and Senate versions want Amtrak’s CEO (currently, William Flynn) rather than president (Stephen Gardner) on the board as a nonvoting member, and seek state and local elected officials to serve. The terms of current board members, including chairman Anthony Coscia, have all expired.
• Food: Form a “working group” to improve onboard food and beverages, and ensure that all passengers — not just those in sleeping cars — have access to hot meals.
• Accounting: Make the methodology determining costs on state-supported routes more transparent, and improve oversight. A new system would also affect cost allocation for long-distance trains.
Other possible provisions include funding up to 10 multistate compact commissions, and reduction of the 750-mile demarcation between long-distance and state-supported service.
Is this micromanaging? Absolutely. With Congress promising increased oversight, it will be interesting to see how Amtrak portrays long-distance network performance. Will management decry a drop in ticket revenue compared to 2019, even when much more could have been generated if more equipment had been ready to use?
In any case, it is clear Amtrak’s approach to navigating the past year did nothing to diminish lawmakers’ willingness to urge changes in how the company runs its business. But with the recently implemented improvements in food service, which recognize the unique attributes of passenger-train travel, there’s a hint that management is ready to chart a different course.