Amtrak says it needs another $1.5 billion bailout to survive the coronavirus crisis

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Amtrak says it needs another $1.5 billion bailout to survive the coronavirus crisis
Passengers board an Amtrak train inside New York's Penn Station, the nation's busiest train hub, which will be closing tracks for repairs causing massive disruptions to commuters in New York CityReuters
  • Amtrak was on the brink of breaking even financially for the first time ever before the coronavirus pandemic hit.
  • Now, the federally subsidized railroad says demand has fallen to just 5% of previous volumes.
  • To make up for the revenue shortfall, Amtrak needs another $1.5 billion bailout from Congress, it said in a letter Tuesday.
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U.S. passenger railroad Amtrak told Congress in a letter made public Tuesday it needs another $1.475 billion bailout or it will be forced to make sweeping service cuts and likely suspend some routes.

Amtrak, which has been devastated by the coronavirus pandemic, in April received $1 billion in emergency funding from Congress as part of the CARES Act. In its bid for further aid, the railroad said it will reduce its operating costs by approximately $500 million including restructuring its workforce and controlling discretionary expenses.

"In February of this year, as Amtrak was on track to have its first break-even year in the company's history, Amtrak transmitted its annual grant request to Congress and asked for $2.040 billion," CEO Bill Flynn, who took over in April, said in the letter.

"However, based on Amtrak's most recent revenue and ridership forecasts, we now project that an additional $1.475 billion in supplemental funding is needed for FY 2021 in order to maintain minimum service levels across our network, provide funding to Amtrak in lieu of state and commuter payments that will be difficult for our partners to provide, and continue our program of capital investment for the future."

Amtrak says it needs another $1.5 billion bailout to survive the coronavirus crisis
Amtrak

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Current demand is about 5% of the usual ridership, the railroad said. So far, it's been able to avoid cutting routes altogether. In many cases, Amtrak has instead pared service to a bare minimum while eliminating some duplicative services, like the Acela higher-speed service on the Northeast Corridor. Now, more routes are set to be cut.

Even with the proposed rescue package from Congress, Amtrak says nearly all long-distance services will be reduced to fewer than one train per day "to match capacity" with the sheer dropoff in ticket sales.

"Without this funding, we will be forced to make even more severe adjustments to our workforce, train services, and commitments to critical capital projects than those described above," Amtrak said in the letter.

Here's Amtrak's full letter to Congress:

Amtrak Supplemental FY21 Funding Letter to Congress Final Signed 5 25 20 (PDF)
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Amtrak Supplemental FY21 Funding Letter to Congress Final Signed 5 25 20 (Text)Read the original article on Business Insider
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