Despite an increase in ridership, Amtrak is expected to lose an additional $506 million in the 2011 fiscal year, company officials projected.
Amtrak has seen an increase in ridership for 18 consecutive months, something the company believes is the result of high gasoline prices drawing commuters to passenger rail. Last year, Amtrak set a record of 28.7 million passengers, and it is on pace to set a new record this year.
But the growing ridership has yet to offset Amtrak's growing losses, and CEO Joseph Boardman blamed the financial woes primarily on the cost of operating the company's long-distance trains.
It's almost entirely the long-distance trains. While there have been an increase in both ridership and revenue on the long-distance trains, it is nowhere near what the increase has been on the Northeast Corridor, Boardman said at a Senate Appropriations hearing on Tuesday.
Boardman identified the Northeast Corridor, which operates between Boston, Mass., and Washington, D.C., as one profitable route for Amtrak. He said the company has used revenue from trains operating on the Northeast Corridor to pay off debt from the purchase of electric trains.
Some lawmakers on Capitol Hill will most likely suggest eliminating Amtrak's long-distance rail service, although opposition will come from the areas that rely on such trains.
You are not going to cut costs far enough on the long-distance trains to make the long-distance trains profitable, Boardman said.
Like other government-subsidized companies, Amtrak has been under the microscope as lawmakers have searched for ways to cut federal spending.
Amtrak most recently received $450 million from the Federal Railroad Administration. The company said the money will be used to improve a rail line between Morrisville, Pa., and New Brunswick, N.J., thereby increasing the maximum speed of Amtrak's Acela express trains from 135 mph to 160 mph.
Republicans have voiced concern over Amtrak's losses and the cost of federal subsidies for passenger rail, while President Barack Obama announced his support for plans to create a high-speed rail system in the United States.
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