Amtrak Operating Loss Widened In Fiscal Year 2015

Dow Jones Newswires

Amtrak said Wednesday its adjusted operating losses in fiscal 2015 widened to $306.5 million from the previous year's loss of $230 million, which was its lowest in four decades. The railroad attributed the latest losses in part to at least $50 million in damages and lost revenue stemming from a May derailment in Philadelphia that killed eight people, damaged equipment and suspended service for days along its busy Northeast Corridor between Washington, D.C., and Boston. Amtrak also cited at least $10 million in expenses and lost revenue related to extensive repairs to an electrical system needed to run trains through its pair of aging tunnels under the Hudson River between New Jersey and Manhattan. Problems with the tunnels this summer disrupted travel for thousands of passengers and renewed a debate over how to pay for Amtrak's backlog of construction projects and repairs. Excluding those extraordinary items in the 2015 fiscal year, which ended Sept. 30, Amtrak said it was able to largely hold the line on revenue and expenses. Ridership remained steady despite low gas prices that can lead passengers to drive instead of boarding trains. "Ridership has developed a strong affinity in passenger rail," said Anthony Coscia, Amtrak's chairman. "We think that riders will stay with trains even as gasoline prices drop." Ticket revenue of $2.2 billion and ridership of 30.9 million fell 0.1% from the prior fiscal year. Total revenue slid 0.8% to $3.2 billion. Expenses rose 1.4% to $4.3 billion. Amtrak's measure of adjusted operating losses doesn't conform to generally accepted U.S. accounting standards, and excludes costs such as depreciation. Amtrak expects insurance to largely pay for an estimated $164 million passenger-claim liability stemming from the May crash in Philadelphia, according to documents provided by the railroad. The National Transportation Safety Board has been investigating why the train was speeding through a tight curve. The railroad's financial reports show the Northeast Corridor generates operating surpluses, excluding capital expenses, while its long-haul national routes generate operating losses. Ridership on the Northeast Corridor ticked up 0.5% in fiscal 2015 to 11.7 million, while ridership on long-distance routes dipped 1.2% to 4.5 million. Robert Puentes, a senior fellow at the Brookings Institution, said it would be difficult for Amtrak to significantly reduce operating losses further without a shift in how its money-losing lines are subsidized and operated. "The question now is what we do with the long-distance routes," he said.

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