Rail birthday: Amtrak's new train gets one-year profit party
The new Amtrak train in Charlottesville celebrated its one-year anniversary with a Thursday morning party that brought together state and local officials and revealed–- sort of–- that what might have been a subsidized extension of the Northeast Regional train is actually making a profit. At least on its operating costs.
"They've exceeded all our expectations," said Mayor Dave Norris at the October 7 event.
One year ago, the wheels began rolling with a promised three-year state subsidy as Amtrak brought one of its Boston-terminating trains though Charlottesville and as far south as Lynchburg.
By July, the train had doubled its goals with $5.2 million in revenue from 103,351 Virginia passengers (against an annual goal of $2.6 million from 51,000 passengers). And there are still two months of first-year data yet to be reported.
"This is one of the best-performing trains in the nation," Thelma Drake, the director of the Virginia Department of Rail and Public Transportation, told celebrants as she noted that there is "a little bit of money in the pot."
Pressed for details, she deferred to officials in the home office, but told a reporter that the contract for the first year of the service reserves at least 79 percent of any Virginia passenger's ticket revenue for the state, which committed to subsidizing the operating costs. (In a parallel move, the state agreed to subsidize a new link to Richmond for an additional $10+ million.)
The Hook emailed some questions to the home office and got more info on the deal:
The gross contract cost for the first year is $5.481 million, and the state was expecting that to be offset by just $2.58 million in revenue, according to Rail spokesperson Courtney Ware. Instead, the Commonwealth–- which had actually agreed to pay as much as $2.9 million for the first year–- has $5.2 million in revenue for the first 10 months, Ware reveals. With two months left to go, indeed it appears that the service will be showing a profit.
Meanwhile, back at the station, it appeared that 82 people climbed aboard the train whose on-time arrival interrupted the birthday party, and Richards noted that 217 people had already made reservations to climb aboard Friday morning. The goal was to get 70 people boarding each time.
So this is a developing story if it's the story of a profitable train. On the other hand, Richards conceded in a recent article that the state has handed over $43 million in infrastructure improvements to the rails and stations that made the Lynchburg extension possible. Moreover, the state has contributed the lion's share of the $37 million in tie-replacement, bridge repair, and signal upgrades that the Buckingham Branch Railroad has been undertaking along track it leases from CSX. The Hook is seeking details on those expenditures too.
On October 11, Amtrak announced that it set records for fiscal 2010 with 28.7 million passengers, up 5.7 percent, and $1.74 billion in revenue, a 9 percent increase. All lines posted growth, something that Amtrak attributes to high gasoline prices, bolstered business travel, and the introduction of Wi-Fi on Acela Express trains.
Still, Virginia's infusion of money into the freight railroads clouds the concept of passenger trains covering their own costs, but it has been state policy since then Governor Mark Warner signed into law something called the Rail Enhancement Fund. At the Amtrak station on October 7, the accomplishment of putting passengers onto the Northeast Regional took center stage.
"It was so unheard of that a train would make money," said Drake.
–-story updated for print on Tuesday, October 12
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(The above article was amended shortly after posting to note that it's a Boston-terminating train, not a New York-terminating train as the first draft alleged.)