Amtrak doesn’t have enough passengers. On many of their routes trains ride mostly empty. They have a cost problem and they have a ridership problem.
The government train operator is addressing the cost of meals, Amtrak has lost nine figures on food service, but doing surprisingly (or not so surprisingly) little to address labor costs.
However they seem to see their ridership problem as a lack of revenue problem and they’er looking to generate more money out of each passenger rather than boost the number of passengers. The Amtrak team, led by former Delta Airlines CEO Richard Anderson, is taking a page from the airline business unbundling looking for possible ways to impose new fees.
A leaked Amtrak memo suggests the National Railroad Passenger Corporation will begin imposing new change and cancellation fees in January.
Riders no longer able to get refunds on or change “Saver” fares 24 hours after they’ve been purchased (Currently, you can get a 75% voucher when you cancel this fare).
The fare classification that’s one level up from “Saver” (“Value”) would be subject to a 25% cancellation fee. And if you change the fare within two weeks of your departure, that would incur a 15% fee (At the moment, these fares can be refunded in full up to eight days before you depart).
Amtrak says this is part of their strategy to become profitable in 2020 but it’s all an accounting gimmick counting government subsidies as revenue and excluding capital expenses (depreciation) as expenses. Amtrak’s 2019 losses are 35 times as high as Anderson claims.
As CEO of Delta, Richard Anderson saw his job as making sure other airlines didn’t get government subsidies. Now his job is literally securing the most government subsidies possible. His strategy for doing this is making Amtrak look fiscally responsible. However making train travel more costly and less convenient isn’t a recipe for higher ridership.
And lest you think you can live with the changes remember that earlier this year Amtrak Guest Rewards imposed new points expiration rules without even telling members.