NEW YORK (Pakistan Point News / Sputnik - 26th May, 2020) The US passenger railroad service Amtrak said in a letter to Congress on Tuesday that it was asking for a bailout of nearly $3.5 billion, or about 75 percent more than what it asked at the beginning of the year, due to the impact of the novel coronavirus pandemic on its ridership and finances.
"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 $2.04 billion for the Northeast Corridor (NEC) and National Network," the letter submitted to US House Speaker Nancy Pelosi and Senate President Mike Pence said. "This request was based on our projected needs before COVID-19. 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 [fiscal year] 2021."
Amtrak said the wider bailout was required to maintain minimum service levels across its network, provide funding that will be difficult for state partners and commuter payments to increase and continue with its capital investments for the future.
To help cushion its revenue loss, Amtrak will attempt to reduce operating costs by approximately $500 million through temporary reduction of train capacity across its system to match demand and restructure its workforce, while controlling discretionary expenses.
But even with these steps, the service will still require additional Federal investment for fiscal year 2021, the letter said.
"It is clear that Amtrak faces daunting challenges in Fiscal Year 2021, which will require us to take action to protect our rail network, our critical capital assets, and the livelihoods of our employees," Amtrak President and CEO Bill Flynn said in the letter. "As the severity and duration of this pandemic and its economic fallout become clearer, we are seeking supplemental federal funding for the next fiscal year."
Amtrak said it expected ridership to drop by approximately 50 percent in fiscal year 2021 to reach just over 16 million based on the current situation on many of our routes, which were struggling to reach even 10 percent of the ridership seen just months ago.
