Amtrak is set to get over $1 billion from the coronavirus bailout after its ridership was decimated

Amtrak conductor

Amtrak is set to get more than $1 billion from the federal government’s coronavirus relief bill, which the Senate approved Wednesday.
Last week, the Wall Street Journal reported that the railroad’s ridership had fallen more than 90% as the pandemic forced people to stay home and cancel trips.
As of Thursday morning, the coronavirus has infected more than 69,000 Americans.
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Amtrak will receive more than $1 billion in federal grants if the $2 trillion aid package approved by the Senate on late Wednesday becomes law.

Earlier this month, as ridership plunged more than 90%, Amtrak officials signaled they would need at least $1 billion to offset a plunge in revenue associate with cancelled trips, lightened schedules, and cancelled routes.

The Senate bill includes a breakdown of the grants between the Northeast Corridor, Amtrak’s only profitable service area and one where it cut the higher speed Acela trains this week, and the rest of its national network. In total, $492 million will go to the Northeast and $526 million will go to the rest of the network, which is largely operated on trackage not owned by the federal corporation but by private freight railroads.

For context, Amtrak received $2 billion — $700 million for the Northeast Corridor and $1.3 billion for its national network — in the 2020 federal budget. In proposing a 2021 spending plan, the White House has suggested steep cuts to the railroad’s subsidies of more than half.

The House of Representatives is set to vote on the bill Friday.

The pandemic couldn’t come at a worse time for Amtrak

Amtrak’s new reality is near about-face from its prospects at the start of the year. With a new chief executive set to take over in April after a record-setting year, Amtrak was on track to break even on an operating basis thanks to intense cost-cutting. Other means of shoring up the federally-subsidized balance sheet, like airline-style change fees for reservations, have proven less popular.

“We must conserve our resources, putting them to use as efficiently as possible and in ways that continue to drive safety and advance our future, so that when things get back to normal, we are ready to grow and prosper,” Stephen Gardner, senior executive vice president and chief operating and commercial officer, wrote in a memo last week.

Instead of breaking even, Amtrak …read more

Source:: Business Insider

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