Intercity Passenger Rail: Financial Performance of Amtrak's Routes
(Letter Report, 05/14/98, GAO/RCED-98-151).

Pursuant to a legislative requirement, GAO reviewed the financial: (1)
performance of Amtrak's current routes; (2) implications for Amtrak of
multiyear capital requirements and declining federal operating
subsidies; and (3) effect on Amtrak of reforms contained in the Amtrak
Reform and Accountability Act of 1997.

GAO noted that: (1) Amtrak spends almost $2 for every dollar of revenue
it earns in providing intercity passenger service; (2) only the
Metroliner's high-speed service between Washington, D.C., and New York
City is profitable; all of Amtrak's other 39 routes operate at a loss;
(3) financial performance measures highlight the problems that Amtrak
routes generally are experiencing; (4) for example, 3 Amtrak routes
spent more than $3 for every dollar of revenue, and 14 routes lost more
than $100 per passenger in fiscal year (FY) 1997; (5) at the same time,
Amtrak has improved the financial performance of several routes by
negotiating support payments with affected states; (6) for example,
California supplemented the revenues of two routes by about $16.5
million each in FY 1997 because these routes particularly benefited its
residents; (7) any decisions about restructuring Amtrak's route system
need to consider whether and how Amtrak will continue to provide
national passenger service; (8) an analysis also needs to assess each
route's customer demand and financial performance, the willingness of
state and local governments to subsidize service, and the route's
broader benefits; (9) these benefits could include providing connecting
service to other routes, providing public transportation that links
smaller communities with major cities, and helping to alleviate highway
congestion and pollution; (10) Amtrak is in a very precarious financial
position and remains heavily dependent on federal funding to pay its
operating and capital expenses; (11) while Amtrak's goal is to eliminate
the need for federal operating subsidies by 2002, its Board of Directors
approved a revised strategic business plan in March 1998 that projected
substantially higher net losses in FY 1998 and FY 1999 than were
included in the previous plan; (12) to reduce these net losses, Amtrak's
revised plan would use federal capital appropriations to pay for
maintenance expenses that traditionally have been treated as operating
expenses; (13) as a result, Amtrak would spend $800 million, or 15
percent, less for capital improvements over the next 5 years than
previously planned; (14) as currently structured, Amtrak will continue
to require federal capital and operating support in 2002 and well into
the future; (15) the reforms included in the Amtrak Reform and
Accountability Act of 1997 will have little, if any, immediate effect on
Amtrak's financial performance, according to Amtrak and Federal Railroad
Administration officials; and (16) the officials added that the
longer-term benefits of these reforms are unclear.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-98-151
     TITLE:  Intercity Passenger Rail: Financial Performance of Amtrak's 
             Routes
      DATE:  05/14/98
   SUBJECT:  Cost analysis
             Railroad transportation operations
             Strategic planning
             Railroad industry
             Losses
             Federal aid to railroads
             Future budget projections
             Financial management

             
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Cover
================================================================ COVER


Report to Congressional Committees

May 1998

INTERCITY PASSENGER RAIL -
FINANCIAL PERFORMANCE OF AMTRAK'S
ROUTES

GAO/RCED-98-151

Intercity Passenger Rail

(348058)


Abbreviations
=============================================================== ABBREV

  FRA - Federal Railroad Administration
  FTA - Federal Transit Administration
  GAO - General Accounting Office
  SBU - strategic business unit

Letter
=============================================================== LETTER


B-279203

May 14, 1998

The Honorable Richard C.  Shelby
Chairman
The Honorable Frank R.  Lautenberg
Ranking Minority Member
Subcommittee on Transportation
Committee on Appropriations
United States Senate

The Honorable Frank R.  Wolf
Chairman
The Honorable Martin Olav Sabo
Ranking Minority Member
Subcommittee on Transportation
 and Related Agencies
Committee on Appropriations
House of Representatives

Since it began operations in 1971, the National Railroad Passenger
Corporation (Amtrak) has never been profitable and has received about
$21 billion in federal subsidies for operating and capital expenses. 
In December 1994, at the direction of the administration, Amtrak
established the goal of eliminating its need for federal operating
subsidies by 2002.  However, despite efforts to control expenses and
improve efficiency, Amtrak has only reduced its annual net loss from
$834 million in fiscal year 1994 to $762 million in fiscal year 1997,
and it projects that its net loss will grow to $845 million this
fiscal year.\1 Amtrak remains heavily dependent on substantial
federal operating and capital subsidies. 

Given Amtrak's continued dependence on federal operating subsidies,
the Conference Report to the Department of Transportation and Related
Agencies Appropriations Act for Fiscal Year 1998 directed us to
examine the financial (1) performance of Amtrak's current routes, (2)
implications for Amtrak of multiyear capital requirements and
declining federal operating subsidies, and (3) effect on Amtrak of
reforms contained in the Amtrak Reform and Accountability Act of
1997.  As agreed with your offices, we relied on Amtrak's financial
data and performance measures to assess the performance of Amtrak's
40 routes.  Furthermore, as agreed, we limited our review to the
reforms contained in the Amtrak Reform and Accountability Act that
repealed the statutory ban on contracting out work that would result
in employee layoffs, except for food and beverage service; eliminated
the statutory and contractual labor protection provisions associated
with discontinuing passenger service; and established a $200 million
limit on liability from a single accident or incident involving an
Amtrak train. 


--------------------
\1 Amtrak defines net loss as its total expenses minus total
revenues. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Amtrak spends almost $2 for every dollar of revenue it earns in
providing intercity passenger service.  Only the Metroliner's
high-speed service between Washington, D.C., and New York City is
profitable; all of Amtrak's other 39 routes operate at a loss. 
Financial performance measures highlight the problems that Amtrak
routes generally are experiencing.  For example, 3 Amtrak routes
spent more than $3 for every dollar of revenue, and 14 routes lost
more than $100 per passenger in fiscal year 1997. 

At the same time, Amtrak has improved the financial performance of
several routes by negotiating support payments with affected states. 
For example, California supplemented the revenues of two routes by
about $16.5 million each in fiscal year 1997 because these routes
particularly benefited its residents. 

Any decisions about restructuring Amtrak's route system need to
consider whether and how Amtrak will continue to provide national
passenger service.  An analysis also needs to assess each route's
customer demand and financial performance, the willingness of state
and local governments to subsidize service, and the route's broader
benefits.  These benefits could include providing connecting service
to other routes, providing public transportation that links smaller
communities with major cities, and helping to alleviate highway
congestion and pollution. 

Amtrak is in a very precarious financial position and remains heavily
dependent on federal funding to pay its operating and capital
expenses.  While Amtrak's goal is to eliminate the need for federal
operating subsidies by 2002, its Board of Directors approved a
revised strategic business plan in March 1998 that projected
substantially higher net losses in fiscal years 1998 and 1999 than
were included in the previous plan.  To reduce these net losses,
Amtrak's revised plan would use federal capital appropriations to pay
for maintenance expenses that traditionally have been treated as
operating expenses.  As a result, Amtrak would spend $800 million, or
15 percent, less for capital improvements over the next 5 years than
previously planned.  As currently structured, Amtrak will continue to
require federal capital and operating support in 2002 and well into
the future. 

The reforms included in the Amtrak Reform and Accountability Act of
1997 will have little, if any, immediate effect on Amtrak's financial
performance, according to Amtrak and Federal Railroad Administration
officials.  The officials added that the longer-term benefits of
these reforms are unclear.  These reforms may result less in
measurable financial savings for Amtrak than in additional
flexibility in negotiating with its unions or in addressing the
concerns of freight railroads about the extent of their liability if
an Amtrak train is involved in an accident on their track. 


   BACKGROUND
------------------------------------------------------------ Letter :2

The Rail Passenger Service Act of 1970 created Amtrak to operate and
revitalize intercity passenger rail service.  Amtrak is required to
operate a national passenger rail system that ties together existing
and emerging regional passenger rail service and other intermodal
passenger services.  Amtrak currently provides passenger service
along 40 routes that cover about 22,800 miles in 44 states and
Washington, D.C.\2 (See fig.  1 and app.  I.) Like all major national
intercity rail services in the world, Amtrak receives substantial
government support.  The administration's fiscal year 1999 budget
proposal would provide Amtrak with $621.5 million for capital
expenses and no separate funding for operating expenses. 

   Figure 1:  Amtrak's Route
   System

   (See figure in printed
   edition.)

   Source:  Amtrak.

   (See figure in printed
   edition.)

At the direction of the administration, Amtrak established the goal
in December 1994 of eliminating its need for federal operating
subsidies by fiscal year 2002, except for federal contributions to
retirement payments for railroad employees, and established a
"glidepath" of decreasing federal operating subsidies for each
intervening year.  To implement this goal, Amtrak's strategic
business plans have targeted opportunities for reducing expenses by
closing some routes and reducing the frequency of service on others. 
These plans have had varying degrees of success.  In addition, Amtrak
projects substantial revenue growth from the introduction of
high-speed rail service between Washington, D.C., and Boston,
Massachusetts, in fiscal year 2000 and from the expansion of mail
service and express service for transporting higher-value,
time-sensitive merchandise.  The Surface Transportation Board
currently is considering the terms and conditions under which the
Union Pacific Railroad and other freight railroads must make their
track and facilities available to Amtrak for its express merchandise
service. 

The Taxpayer Relief Act of 1997, enacted in August 1997, makes a
total of $2.2 billion available to Amtrak in fiscal years 1998 and
1999 to acquire capital improvements and to pay certain equipment
maintenance expenses, among other things.\3 Enacted in December 1997,
the Amtrak Reform and Accountability Act of 1997 authorized federal
funding for Amtrak's capital and operating expenses through fiscal
year 2002 and repealed several provisions of federal law that limited
Amtrak's ability to manage costs and maximize revenues.  Among other
things, the act also established an Amtrak Reform Council to evaluate
Amtrak's performance and make recommendations to Amtrak for financial
reforms and further cost containment and productivity improvements. 
In passing the act, the Congress found that intercity passenger rail
service is an essential component of a national intermodal passenger
transportation system. 


--------------------
\2 Amtrak currently does not serve Alaska, Hawaii, Maine, Oklahoma,
South Dakota, and Wyoming. 

\3 Amtrak is required to pay 1 percent of the $2.3 billion made
available under the act to each state that it does not serve. 


   FINANCIAL PERFORMANCE OF
   AMTRAK'S ROUTES
------------------------------------------------------------ Letter :3

As shown in table 1, Amtrak's expenses were at least 2 times greater
than its revenues for 28 of its 40 routes in fiscal year 1997.  In
addition, 14 routes lost more than $100 per passenger carried. 
Amtrak's financial system allocates all expenses of operating
intercity passenger trains to routes, including the depreciation of
its equipment and infrastructure, interest, and corporate and
strategic business unit (SBU) overhead costs.  Because the measures
of financial performance used in this report follow Amtrak's fully
allocated cost approach, they do not represent potential cost savings
to Amtrak if it discontinued a route:  Depreciation (a noncash
expense) and overhead and other shared expenses would not be
eliminated by closing a route.  If Amtrak's financial performance
data excluded depreciation, losses per passenger would be reduced by
at most $10 on 16 routes and by at least $30 on 8 other routes.  (See
table II.1 in app.  II for a comparison of losses per passenger when
depreciation is excluded.)



                                         Table 1
                         
                            Financial Performance of Amtrak's
                                 Routes, Fiscal Year 1997

                                                                                Profit or
                                                                Operating      (loss) per
Name                        Route                                 ratio\a       passenger
--------------------------  -----------------------------  --------------  --------------
Metroliners                 New York, NY-Washington, D.C.            0.94              $5
San Joaquins                Oakland, CA-Bakersfield, CA              1.23           ($11)
Carolinian                  New York, NY-Charlotte, NC               1.45           ($27)
Piedmont                    Raleigh, NC-Charlotte, NC                1.48           ($42)
Capitols                    Colfax, CA-San Jose, CA                  1.52           ($15)
Auto Train                  Lorton, VA-Sanford, FL                   1.56          ($118)
Northeast Direct            Boston or Springfield, MA-               1.65           ($29)
                             Washington, D.C., or Newport
                             News, VA
Pacific Northwest Corridor  Eugene, OR-Seattle, WA, or               1.76           ($26)
                             Vancouver, Canada
Illini                      Chicago, IL-Carbondale, IL               1.82           ($47)
Kansas City-St. Louis       Kansas City, MO-St. Louis, MO            1.91           ($45)
Southwest Chief             Chicago, IL-Los Angeles, CA              1.92          ($180)
San Diegans                 San Diego, CA-Los Angeles or             1.96           ($23)
                             Santa Barbara or San Luis
                             Obispo, CA
Vermonter                   Washington, D.C.-St. Albans,             2.00           ($58)
                             VT
Lake Shore Limited          Chicago, IL-Boston, MA, or               2.01           ($90)
                             New York, NY
Empire                      New York, NY-Albany or                   2.03           ($38)
                             Niagara Falls, NY
Adirondack                  New York, NY-Montreal, Canada            2.10           ($57)
Philadelphia-Harrisburg     Philadelphia, PA-Harrisburg,             2.15           ($22)
                             PA
Three Rivers                New York, NY-Chicago, IL                 2.18          ($138)
Silver Meteor               New York, NY-Miami, FL                   2.18          ($120)
Empire Builder              Chicago, IL-Seattle, WA, or              2.20          ($136)
                             Portland, OR
Illinois Zephyr             Chicago, IL-Quincy, IL                   2.21           ($61)
International               Chicago, IL-Toronto, Canada              2.23           ($47)
California Zephyr           Chicago, IL-Emeryville (San              2.24          ($149)
                             Francisco), CA
Capitol Limited             Chicago, IL-Washington, D.C.             2.27          ($133)
New York-Harrisburg         New York, NY-Harrisburg, PA              2.30           ($37)
Pere Marquette              Chicago, IL-Grand Rapids, MI             2.43           ($51)
Coast Starlight             Los Angeles, CA-Seattle, WA              2.43           ($92)
Silver Star                 New York, NY-Miami, FL                   2.47          ($143)
Silver Palm\b               New York, NY-Miami, FL                   2.48          ($163)
Crescent                    New York, NY-New Orleans, LA             2.56          ($163)
Clockers                    New York, NY-Philadelphia, PA            2.59           ($11)
Pennsylvanian               New York, NY-Pittsburgh, PA              2.70           ($53)
Chicago-St. Louis           Chicago, IL-St. Louis, MO                2.73           ($64)
Empire-Ethan Allen          New York, NY-Rutland, VT                 2.75           ($79)
 Express\c
City of New Orleans         Chicago, IL-New Orleans, LA              2.78          ($130)
Hiawathas                   Chicago, IL-Milwaukee, WI                2.92           ($50)
Texas Eagle                 Chicago, IL-San Antonio, TX,             2.99          ($201)
                             or Los Angeles, CA
Sunset Limited              Los Angeles, CA-Orlando, FL              3.16          ($284)
Cardinal                    Chicago, IL-Washington, D.C.             3.29          ($136)
Chicago-Pontiac             Chicago, IL-Detroit or                   3.66           ($66)
                             Pontiac, MI
=========================================================================================
Total route system                                                 1.86\d           ($47)
-----------------------------------------------------------------------------------------
Note:  These financial performance data do not represent the cash
impact on Amtrak's bottom line of operating each particular route
because (1) they show each route's fully allocated costs in operating
intercity passenger trains, including depreciation and overhead
costs; (2) they do not account for the impact travel on one route has
on the ridership and revenues of other routes; and (3) certain costs
are shared among routes and would shift to other routes if a route
were closed.  These issues are discussed later in this report.  The
three routes that Amtrak closed during fiscal year 1997 are excluded. 

\a A route's operating ratio is its expenses divided by its revenues. 
An operating ratio less than 1.0 means that the route was profitable,
while an operating ratio greater than 1.0 means that the route lost
money.  A ratio greater than 2.0 means that the route's expenses were
at least 2 times greater than its revenues during the fiscal year. 

\b Service was introduced in Nov.  1996. 

\c Service was introduced in Dec.  1996. 

\d Operating ratio for Amtrak's core intercity passenger services. 
Amtrak's overall operating ratio, which includes commuter operations
and other activities, was 1.46. 

Source:  GAO's analysis of Amtrak's data. 

Since 1994, Amtrak has completed two extensive assessments of its
routes that identified options for closing routes, truncating routes
by discontinuing service on segments of the routes, or adjusting the
frequency of service on routes in an effort to reduce Amtrak's
financial losses by cutting costs while minimizing revenue losses. 
In response to its first assessment, Amtrak closed 4 routes,
truncated 6 routes, and reduced the frequency of service on 11
routes, typically from daily to three or four times per week.  Amtrak
achieved $54 million in cost savings in fiscal year 1995; however, it
subsequently restored much of this service because the ridership and
financial performance of routes with less than daily service were
worse than anticipated.  While Amtrak currently has no plans to close
additional routes, it recently initiated a market-based analysis of
its route system to clarify the policy for and direction of its
national route system.  This analysis will shape Amtrak's long-term
investment and development program for passenger rail service. 


      AMTRAK'S KEY PERFORMANCE
      MEASURES
---------------------------------------------------------- Letter :3.1

Amtrak's primary financial performance measure is the operating ratio
of each route's expenses divided by its revenues.\4 The overall
operating ratio for Amtrak's core intercity passenger services was
1.86 in fiscal year 1997.  This ratio indicates that expenses were
almost twice as great as revenues for Amtrak's core intercity
passenger services, which include mail and express merchandise
services but exclude revenues and expenses from Amtrak's commuter
operations, other reimbursable activities, and commercial
development.  (See table II.2 in app.  II for each route's operating
ratio for fiscal years 1994 through 1997.) Figure 2 shows the three
routes that had operating ratios greater than 3.0, indicating that
expenses were more than 3 times greater than revenues.  Eight routes
had operating ratios between 2.5 and 3.0 in fiscal year 1997. 

   Figure 2:  Amtrak's Routes With
   the Highest Operating Ratios,
   Fiscal Year 1997

   (See figure in printed
   edition.)

   Source:  GAO's analysis of
   Amtrak's data.

   (See figure in printed
   edition.)

A related performance measure is the total operating profit or loss
of each route.  (See table II.3 in app.  II for each route's
operating profit or loss for fiscal years 1994 through 1997.) While
the Metroliners route was Amtrak's only profitable route, 7 routes
each lost at least $40 million and 10 additional routes each lost
between $20 million and $40 million in fiscal year 1997.  The
Northeast Direct route between Washington, D.C., and Boston had the
largest loss--$160 million--because it loses $29 per passenger, while
it transports 28 percent of all Amtrak passengers.  However, its
operating ratio of 1.65 was among the best of Amtrak's routes.  The
other routes that lost the most money during fiscal year 1997 were
primarily long-distance routes.  Only five Amtrak routes had revenues
that exceeded their train expenses, which include the train crew's
wages, fuel, and the depreciation of the train's locomotive and cars,
in fiscal year 1997.  (See table II.4 in app.  II for each route's
train, route, and system expenses in fiscal year 1997.)

Ridership is another key performance measure.  During fiscal year
1997, five Amtrak routes each carried more than 1 million passengers,
accounting for nearly 60 percent of the railroad's ridership.  In
contrast, 17 Amtrak routes carried only about 10 percent of Amtrak's
total ridership--9 routes each carried fewer than 100,000 passengers,
and 8 routes each carried between 100,000 and 200,000 passengers. 
(See table II.5 in app.  II for each route's ridership for fiscal
years 1994 through 1997.) Many of these routes connected a small city
with Chicago, New York City, or Philadelphia.  In addition, while
Amtrak routes generally provided at least daily service, three
routes--the Cardinal, Sunset Limited, and Texas Eagle--provided
service only three times per week during fiscal year 1997. 

Overall, Amtrak lost $47 per passenger during fiscal year 1997.  (See
table II.6 in app.  II for each route's profit or loss per passenger
for fiscal years 1994 through 1997.) As shown in figure 3, 14 of
Amtrak's current routes lost more than $100 per passenger during
fiscal year 1997.\5 The Sunset Limited route (between Los Angeles and
Orlando) lost $284 per passenger, the most among Amtrak's routes,
followed by the Texas Eagle route (between Chicago and San Antonio),
which lost $201 per passenger, and the Southwest Chief route (between
Chicago and Los Angeles), which lost $180 per passenger.  Amtrak
anticipates that each of these three routes could earn substantial
new revenues if the Surface Transportation Board permits Amtrak to
expand its express merchandise service for transporting higher-value,
time-sensitive goods. 

   Figure 3:  Amtrak's Routes With
   the Largest Losses per
   Passenger, Fiscal Year 1997

   (See figure in printed
   edition.)

   Source:  GAO's analysis of
   Amtrak's data.

   (See figure in printed
   edition.)

Amtrak's loss per passenger would have been greater in fiscal year
1997 if 12 states had not provided a total of $70.1 million to
subsidize service on 17 routes that particularly benefited their
residents.  (See table II.7 in app.  II.) For example, California's
contribution of $16.8 million for the San Joaquins route, which
carried 688,000 passengers between Oakland and Bakersfield, reduced
this route's loss from $35 to only $11 per passenger in fiscal year
1997 and improved its financial performance to second best among the
40 routes (behind the profitable Metroliners).  Similarly, North
Carolina's payment of $3.2 million for the Piedmont route, which
carried 43,000 passengers between Raleigh and Charlotte, reduced this
route's loss from $116 per passenger to $42 per passenger.  Amtrak
has sought state support primarily for shorter routes whose service
benefits residents in one or two states. 

Amtrak uses a load factor to assess each route's efficiency in
providing service.\6

(See table II.8 in app.  II.) Amtrak's overall load factor of 46.6
percent during fiscal year 1997 means that, on average, 46.6 percent
of Amtrak's seats were filled.  Amtrak's long-distance trains
generally had higher load factors than its short-distance trains. 
The International route (between Chicago and Toronto, Canada), the
Pennsylvanian route (between New York City and Pittsburgh), and the
New York-Harrisburg route had load factors under 30 percent.  Twelve
additional routes had load factors between 30 and 40 percent. 


--------------------
\4 In 1995, Amtrak made major revisions to its route profitability
system to more accurately allocate expenses to specific trains and
routes. 

\5 In addition, each of the three routes closed during 1997 lost more
than $100 per passenger. 

\6 Load factor is defined as the miles that passengers travel divided
by the total seat-miles available along the route. 


      RECENT ROUTE AND SERVICE
      CUTS AIMED AT REDUCING
      LOSSES WHILE PRESERVING
      NATIONAL NETWORK
---------------------------------------------------------- Letter :3.2

Since 1994, Amtrak has conducted two extensive assessments of its
route system that provided the basis for its decision to close 8
routes, truncate 7 routes, and, in 1995, reduce the frequency of
service on 11 routes.  (See tables II.9 and II.10 in app.  II.) In
making its decisions on route closures and service reductions, Amtrak
examined such factors as the financial performance of each route; the
effect of a route's closure on connecting routes and the overall
network; the efficient use of equipment; marketing concerns; states'
willingness to subsidize service; Amtrak's mandate to provide
national passenger rail service; and a route's potential for improved
profitability through, for example, the growth of mail and express
merchandise services. 

Faced with a major financial crisis in 1994, Amtrak contracted with
Mercer Management Consulting to develop recommendations for reducing
its route network to reduce its financial losses while maintaining
its national coverage.  Mercer analyzed Amtrak's route network by
determining the effects on the route system's bottom line of either
closing or reducing the frequency of service on the worst-performing
routes.  This analysis split Amtrak's operating expenses into train,
route, and system expenses to better determine the effect of
terminating a train or route.\7 It also considered the (1)
interconnectivity among routes by analyzing the extent to which
travel on one route affects the ridership and revenues of other
routes and (2) effect of cutbacks to less-than-daily service on
ridership and revenues by estimating the extent to which passengers
would adjust their travel plans to fit the schedules of the remaining
trains.  However, the study noted that its estimates of this "revenue
retention" were based on limited Amtrak experience and actual results
could vary.  Mercer recommended substantial eliminations of routes
and segments and reductions in the frequency of service designed to
maximize operating savings while limiting the loss of services and
coverage. 

In response to Mercer's recommendations, Amtrak closed 4 routes,
truncated 6 routes, and reduced the frequency of service on 11
additional routes, primarily from daily to three to four times per
week, during fiscal year 1995.  Amtrak also introduced the Piedmont
route (between Raleigh and Charlotte), supported by North Carolina,
and the Mount Baker International train (between Seattle and
Vancouver, Canada), supported by Washington State.  These route and
service changes resulted in a 13-percent reduction in the total miles
that Amtrak trains traveled from fiscal year 1994 to fiscal year 1996
and $54 million in cost savings in fiscal year 1995.  However, during
fiscal year 1996, Amtrak's overall ridership dropped by 1.1 million
passengers, or 5 percent, and anticipated reductions in operating
costs were not realized on routes with reduced frequency of service. 
Amtrak officials told us that these problems occurred because (1)
while passengers affected by frequency reductions generally adjusted
their travel plans to conform with Amtrak's more limited service in
1995, this rider behavior did not continue into 1996; (2) management
did not cut costs as much as planned; and (3) less-than-daily service
caused less efficient usage of equipment and other unforeseen
problems. 

During fiscal year 1995, Amtrak also decentralized its organizational
structure by creating the Northeast Corridor SBU to manage passenger
service between Virginia and New England; the Amtrak West SBU to
manage passenger service along the West Coast; and the Intercity SBU
to manage all remaining passenger service.  In April 1996, the
Northeast Corridor SBU reduced the frequency of service on its
Metroliner and Northeast Direct routes, in response to an ongoing
analysis of how to improve the SBU's financial performance.  These
changes, along with some ticket pricing changes, helped the Northeast
Corridor SBU to reduce its net loss by 19 percent between fiscal
years 1996 and 1997, according to Amtrak officials. 

In mid-1996, Amtrak's Intercity SBU analyzed its route structure to
identify opportunities to improve its financial performance,
primarily by more effectively using its locomotives and passenger
cars to raise revenues.  Intercity SBU's routes were responsible for
61 percent of Amtrak's passenger service losses, and its
long-distance routes were affected the most by the 1995 service
reductions.  Intercity SBU concluded from its analysis that it could
restore daily service on three routes with higher market potential by
closing two poorly performing routes and making certain other
adjustments to maximize equipment utilization.  In deciding which
routes to eliminate, Intercity SBU considered financial performance,
the costs saved by elimination, route interconnectivity, marketing
concerns, and long-term growth and profit opportunities, including
the expansion of mail and express merchandise services. 

In response to this analysis, Amtrak's Intercity SBU (1) truncated
the Sunset Limited route from Miami to Sanford, Florida, in November
1996 and (2) closed the Desert Wind and Pioneer routes and
reinstituted daily service on the California Zephyr, Empire Builder,
and City of New Orleans routes in May 1997.\8

Amtrak did not discontinue service on two other route segments
targeted for elimination because the affected states offered to
provide financial support.\9 The impact of these route and service
actions on the financial performance of Intercity SBU's routes is not
yet clear--the overall operating ratio of Intercity SBU's routes has
not shown any consistent trends since these changes were implemented. 
However, net losses for Intercity SBU's routes were 12 percent
greater in fiscal year 1997 than in fiscal year 1996.  About half of
this increase reflected higher depreciation costs for new equipment,
the allocation of a portion of the depreciation costs for the
Northeast Corridor's track, and about $13 million more in expenses
than the funding made available for extending service by 6 months for
routes scheduled for closure. 

Since 1996, Amtrak has focused on improving its financial performance
by identifying growth opportunities rather than by reducing service. 
Amtrak's September 1997 strategic business plan projected that net
revenues would substantially increase with the rapid growth of
Amtrak's express merchandise service, which would primarily transport
goods from the West Coast to the Midwest, and with the introduction
of high-speed rail between Washington, D.C., and Boston, which would
benefit all of the Northeast Corridor's routes.  Amtrak also has
fine-tuned the performance of specific routes.  For example, in
recent months, it (1) redesigned the Night Owl train (renamed the
Twilight Shoreliner) between Boston and Washington, D.C., by
modifying its departure times and extending service to Newport News,
Virginia; (2) extended the Sunset Limited route from Sanford to
Orlando, Florida, to increase ridership in the vacation market; and
(3) added a fourth train per week to the Texas Eagle route that runs
from Chicago through San Antonio to Los Angeles to support the
expected growth of its express merchandise business.  Amtrak also
plans to begin daily service between Los Angeles and Las Vegas by
January 1999.\10

In explaining the rationale for not cutting Amtrak's route system
further at this time, officials of Amtrak and the Department of
Transportation's Federal Railroad Administration (FRA) pointed to
Amtrak's mission of maintaining a national route system, noting that
such a system will consist of routes with a range of profitability,
including lower-performing routes that may provide connecting service
with other routes or public benefits, such as serving small cities
and rural areas.  The officials stressed that cutting the
worst-performing routes could damage the national network by reducing
or eliminating potential passengers' access to connecting routes.  In
addition, Amtrak Intercity SBU officials noted that (1) their routes
generally are profitable if revenues are compared with only the
variable costs that would be eliminated if a route were closed\11 and
(2) fixed costs, which generally are not eliminated when routes are
closed, would be spread over a smaller revenue base of remaining
routes, further worsening the financial performance of these routes. 
Finally, the officials cited the importance of assessing whether
growth options work before deciding on further cuts, pointing to the
recent 25- to 30-percent increase in ridership compared with that of
a year ago on the Coast Starlight route between Seattle and Los
Angeles, and the Pacific Northwest Corridor route between Seattle and
Eugene. 


--------------------
\7 Amtrak later incorporated this approach into its route
profitability system.  Train expenses include the train crew's
salaries, fuel, and depreciation of locomotives and cars.  Route
expenses, incurred by a route's existence, include station and track
maintenance.  System expenses, associated with the overall route
network, include overhead costs such as salaries of corporate and SBU
headquarters staff.  Reducing the frequency of service on a route
would decrease train expenses, while closing routes would reduce
train and route expenses. 

\8 Since 1995, the Intercity SBU has also reinstituted daily service
on the Crescent and Pere Marquette routes. 

\9 According to Amtrak officials, the St.  Louis-to-San Antonio
segment of the Texas Eagle was retained in return for a $5.6 million
loan from Texas.  The Boston-to-Albany segment of the Lake Shore
Limited also was retained because Massachusetts offered to help
finance a mail and express merchandise terminal in Springfield. 

\10 Amtrak's Desert Wind route had provided triweekly service between
Los Angeles and Salt Lake City, with a stop in Las Vegas, until it
was terminated in May 1997. 

\11 Amtrak's data show that seven routes have revenues that exceed
train expenses, when depreciation is excluded (see table II.1 in app. 
II). 


      AMTRAK RECENTLY INITIATED A
      STUDY OF ITS NATIONAL ROUTE
      SYSTEM
---------------------------------------------------------- Letter :3.3

In March 1998, Amtrak announced plans to initiate a year-long market
analysis of the role and growth potential of the national passenger
rail system.  The analysis will assess the service, demand, revenues,
and net contribution of Amtrak's current and alternative route
systems to identify service amenities, price changes, and changes to
the existing route system that may improve the ridership and revenue
potential of Amtrak's network in the short and long terms.  In
addition, the Amtrak Reform and Accountability Act directed the newly
created Amtrak Reform Council to assess Amtrak's financial
performance.  If the council determines, at any time after December
1999, that Amtrak is not achieving its financial goals or that Amtrak
will require operating grant funds after December 2002, the council
is required to develop an action plan for a "restructured and
rationalized national intercity rail passenger system."\12 A
restructured passenger rail system could range from a system similar
to Amtrak's current national route system to limited passenger
service between key pairs of cities. 

Amtrak officials stated that the design of an optimal route system
requires a vision of how intercity passenger rail service fits within
the national transportation system and the public benefits it should
offer.  They also noted that potentially profitable passenger
services could be identified by using market research and demographic
analyses to determine customer demand for services and potential
revenues and by then comparing these revenues with the expense of
providing such services, including the infrastructure and equipment
needed.  FRA officials stated that the design of an optimal route
system should involve an examination of key pairs of cities that
could generate substantial ridership and the linkages needed to make
them into a national system, assuming that Amtrak's mission of
operating a national passenger rail system would remain unchanged. 
They also stated that this type of analysis should incorporate the
(1) transportation policies of states and localities and their
willingness to fund passenger rail, (2) needs of small towns and
rural areas, and (3) relative benefits of passenger rail service
compared with other modes of transportation.  FRA officials
acknowledged that no clear public policy currently defines the role
of passenger rail in the national transportation system. 


--------------------
\12 Under such circumstances, Amtrak would be required to develop and
submit to the Congress an action plan for the complete liquidation of
the railroad. 


   AMTRAK'S OPERATING AND CAPITAL
   SUBSIDIES
------------------------------------------------------------ Letter :4

Since 1971, Amtrak has received about $21 billion in federal
operating and capital funding to help cover the costs of providing
intercity passenger rail service.  Amtrak's glidepath for eliminating
federal operating support by fiscal year 2002 established an
aggressive schedule for reducing net losses and overall losses.\13

While Amtrak has made progress in increasing revenues and reducing
losses, it has not achieved its annual budget goals.  Furthermore, in
March 1998, Amtrak's Board of Directors approved a revised strategic
business plan for fiscal years 1998 through 2003 that projects a net
loss of $845 million for fiscal year 1998--$83 million more than the
$762 million net loss that occurred in fiscal year 1997. 

Although Amtrak stands to receive historic levels of federal capital
support in the next few years, it is unlikely that sufficient funding
will be available to implement Amtrak's identified capital investment
projects.  Amtrak's management, in the September 1997 strategic
business plan, identified about $5.5 billion in capital improvement
projects between fiscal years 1998 and 2003.  However, the plan
identified only about $5.0 billion, or about $500 million short of
Amtrak's target for capital funding, that would be provided through
federal, state, and local support and commercial financing. 
Furthermore, Amtrak plans to use about $800 million of the federal
funding it receives between fiscal years 1998 and 2003 for
maintenance expenses, rather than for capital investment, because of
expected cash shortfalls during the next 3 years.  The
administration's proposed budget for fiscal year 1999 would provide
Amtrak with the flexibility to use capital funds to pay expenses for
equipment, facilities, and infrastructure maintenance, which have
traditionally been treated as operating expenses. 


--------------------
\13 Amtrak's overall loss is its net loss (expenses minus revenues)
offset by certain federal subsidies and noncash expenses (primarily
depreciation). 


      AMTRAK HAS NOT SUBSTANTIALLY
      REDUCED ITS ANNUAL NET
      LOSSES
---------------------------------------------------------- Letter :4.1

Amtrak has established a schedule for gradually reducing its federal
operating subsidy each year, beginning in fiscal year 1996, until the
subsidy is eliminated in fiscal year 2002.  (See table III.1 in app. 
III.) Federal appropriations for Amtrak's operations and the federal
retirement payments for railroad employees have dropped by almost
$200 million--from $542 million in fiscal year 1995 to $344 million
in fiscal year 1998.  However, Amtrak has struggled to reach its
annual targets for reducing its net loss, which provide the basis for
Amtrak's continued viability as federal operating subsidies are
eliminated.  For fiscal years 1995 and 1996, Amtrak's plans included
actions to reduce its net loss by $195 million--from about $834
million in fiscal year 1994 to $639 million in fiscal year 1996.  By
the end of fiscal year 1996, however, Amtrak's net loss had declined
by only $70 million to $764 million.  (See table III.2 in app.  III.)
In addition, Amtrak's net loss of $762 million in fiscal year 1997
would have been $69 million higher except for the one-time sales of
real estate and telecommunications rights-of-way in the Northeast
Corridor.  As a result of Amtrak's reduced federal operating subsidy
and slow progress in reducing its net losses, Amtrak's overall
loss--its loss after federal operating subsidies are
included--increased from $12 million in fiscal year 1995 to $70
million in fiscal year 1997.  (See table III.3 in app.  III.)

In March 1998, Amtrak's Board of Directors approved a revised
strategic business plan that projected a net loss of $845 million and
an overall loss of $98.5 million for fiscal year 1998.  The revised
plan reflects a serious cash-flow problem and Amtrak's need to borrow
substantially more money than originally planned to pay operating
expenses.  While Amtrak borrowed $75 million to meet its operating
expenses in fiscal year 1997 and initially planned to borrow $100
million in fiscal year 1998, the revised plan projects a cash-flow
deficit of $200 million in this fiscal year.  The change in Amtrak's
cash flow for fiscal year 1998 results from (1) a reduction of $47
million in the projected profits from its express merchandise service
for the delivery of higher-value, time-sensitive goods; (2) an
increase of $35 million in expenses to cover wage increases for all
of its union employees, which reflects its settlement with the
Brotherhood of Maintenance of Way Employees in November 1997; and (3)
an increase of $16 million in its accounts payable because payment
was deferred from fiscal year 1997. 

As discussed previously, Amtrak planned to reduce its net loss and
eliminate its need for federal operating subsidies primarily by
increasing revenues while controlling costs.  During fiscal year
1997, Amtrak increased its ridership by about 3 percent to 20.2
million passengers--the Amtrak West SBU increased its ridership by 11
percent, and the Intercity and Northeast Corridor SBUs both increased
their ridership by 1 percent.\14 Revenues from Amtrak's core
intercity passenger services grew by about 4 percent in fiscal year
1997, including a 7-percent increase in passenger revenues.  However,
expenses for the core intercity passenger services also grew by about
7 percent.  In addition, Amtrak's revised strategic business plan
sharply reduced projected 6-year profits from its express merchandise
service--from $436 million to $140 million between fiscal years 1998
and 2003.  This reduction reflects, in part, uncertainties pending
the Surface Transportation Board's determination of the terms and
conditions under which Union Pacific and other freight railroads must
make their track and facilities available to Amtrak for express
merchandise service.\15 (Freight railroads own about 97 percent of
the route miles over which Amtrak operates.) As a result, Amtrak
postponed plans to order 367 refrigerated express cars and will
expand this component of its express merchandise service more
gradually if the Surface Transportation Board issues a favorable
ruling.  The reduction in express merchandise service revenues
weakens Amtrak's ability to improve the financial performance of
certain of its long-distance routes. 

Amtrak plans to begin high-speed rail service between New York City
and Boston in October 1999, designed to reduce travel time from 4-3/4
hours to 3 hours by enabling passenger trains to travel at speeds of
up to 150 miles per hour.  Amtrak also is upgrading its track between
Washington, D.C., and New York City to further reduce travel time by
15 minutes to 2-3/4 hours by enabling trains to travel at speeds up
to 135 miles per hour.  Amtrak projects that high-speed rail service
between Washington, D.C., and Boston will be fully implemented in
October 2000 and will provide net returns of $190 million in fiscal
year 2001 and $219 million in fiscal year 2003, eliminating almost
all of the Northeast Corridor SBU's operating loss. 


--------------------
\14 Amtrak anticipates that ridership will grow by 6 percent in
fiscal year 1998. 

\15 A Surface Transportation Board decision in Sept.  1997 limits
Amtrak trains that use Union Pacific track to a total of 18 cars, of
which at most 9 cars may carry express merchandise.  Union Pacific
has asked the Surface Transportation Board to, among other things,
limit the definition of Amtrak's express merchandise service to the
movement of less than truckload shipments, which would limit Amtrak's
potential customer base. 


      AVAILABLE FUNDS MAY FALL
      SHORT OF AMTRAK'S CAPITAL
      INVESTMENT TARGET AND MAY BE
      USED TO PAY MAINTENANCE
      EXPENSES
---------------------------------------------------------- Letter :4.2

Capital investments play a critical role in supporting Amtrak's
business plans and ultimately in maintaining Amtrak's viability. 
Such investments will help Amtrak to retain revenues by improving its
quality of service and achieve future goals for revenue growth and
cost containment.  In the September 1997 strategic business plan,
Amtrak's management identified about $5.5 billion in capital
improvement projects from fiscal year 1998 through fiscal year 2003. 
(See table III.4 in app.  III.) This amount includes about (1) $1.7
billion for completing the high-speed rail program between
Washington, D.C., and Boston; (2) $900 million for other
infrastructure-related improvements along the Northeast Corridor; and
(3) $500 million for overhauling existing equipment.  However, Amtrak
anticipates that it will receive about $500 million less than its
target for capital funding through fiscal year 2003:  about $4.2
billion in federal funding\16 and about $800 million from commercial
financing and state and local funding.  Amtrak's Board of Directors
has approved capital spending only for fiscal year 1998; Amtrak's
management currently is developing a 5-year capital plan for fiscal
years 1999 through 2003 that it plans to present to the Board in
September 1998. 

Amtrak has stated that it will use Taxpayer Relief Act funds for
those high rate-of-return capital investments that over time would
strengthen its long-term viability, improve productivity and
efficiency, and reduce its reliance on federal operating support. 
However, Amtrak plans to temporarily use $100 million in Taxpayer
Relief Act funds in fiscal year 1998, $317 million in fiscal year
1999, and $200 million in fiscal year 2000 for equipment maintenance
expenses to reduce its cash-flow deficit in each of these years.\17
Amtrak projects that its net losses and cash-flow deficits will be
reduced in fiscal year 2001, when high-speed rail is implemented
between Washington, D.C., and Boston, enabling it to use Taxpayer
Relief Act funds for high rate-of-return capital investment projects. 

The administration's fiscal year 1999 budget proposes $621.5 million
for Amtrak's capital investments, including at least $200 million for
the Northeast Corridor program, and no funding for operating
expenses.  The Department of Transportation's budget justification,
submitted in March 1998, proposes that Amtrak be allowed to use its
annual capital appropriation to pay for the preventive maintenance of
equipment, facilities, and infrastructure, as currently allowed for
Federal Transit Administration (FTA) grantees.  This flexibility
would enable Amtrak to use appropriated capital funds as it uses
federal operating support that reduces its annual net losses.  Amtrak
estimates that, if approved, its capital appropriation could be used
for up to $542 million in maintenance expenses in fiscal year 1999
and $487 million in each subsequent fiscal year.  (Amtrak currently
does not plan to fully exercise this authority.)

Amtrak's March 1998 strategic business plan proposes to use
substantial amounts of federal capital funds appropriated from fiscal
year 1999 through fiscal year 2003 for maintenance expenses to
address the net losses and cash-flow deficits that Amtrak identified. 
Table 2 compares how Amtrak would spend federal funds under its
glidepath with how Amtrak proposes to spend its federal capital
appropriation under FTA's approach to maintenance expenses.  (See
table III.5 in app.  III for annual funding amounts under each
approach.) For the 5-year period, Amtrak would spend almost
two-thirds of the anticipated $2.8 billion in appropriated funds for
allowable maintenance--$800 million more than the glidepath would
allow for operating expenses.  The use of these federal funds for
maintenance expenses would correspondingly reduce the federal funding
available for capital improvements by $800 million through fiscal
year 2003.  Amtrak officials told us that using a portion of the
federal capital appropriation for maintenance will provide stability
for Amtrak over the next several years, thus averting a possible
bankruptcy.  They added that this stability will enable Amtrak to
complete the market analysis discussed earlier. 



                                Table 2
                
                  Proposed Use of Federal Funds Under
                  Amtrak's Original Glidepath and FTA
                 Approaches, Fiscal Years 1999 Through
                                  2003

                         (Dollars in millions)

Use of funds                                 Total             Percent
------------------------------  ------------------  ------------------
======================================================================
Capital grant appropriation                 $2,755                 100

Glidepath approach
----------------------------------------------------------------------
Operating expenses                          $1,010                  37
Capital expenses                            $1,745                  63

FTA's capital maintenance approach
----------------------------------------------------------------------
Maintenance expenses                        $1,795                  65
Capital expenses                              $960                  35
----------------------------------------------------------------------
Note:  Amtrak's original glidepath would eliminate federal operating
subsidies by 2002, except that the federal government would continue
its payments to the Railroad Retirement Account.  Amtrak's federal
grant request for fiscal year 1999 revised the glidepath to include
an additional $84 million in fiscal year 1999 to make up for federal
operating support that was lower than the glidepath amount in prior
years. 


--------------------
\16 Federal funding sources include the Taxpayer Relief Act, fiscal
year 1998 capital appropriations, and the administration's proposed
fiscal year 1999 budget (which projected spending for fiscal years
1999 through 2003). 

\17 The Taxpayer Relief Act made funds available to Amtrak for
certain expenses that include, among other things, maintaining
existing equipment in intercity passenger rail service.  Amtrak
traditionally has treated equipment maintenance as an operating
expense. 


   FINANCIAL EFFECT OF CERTAIN
   REFORM ACT PROVISIONS
------------------------------------------------------------ Letter :5

The Amtrak Reform and Accountability Act repealed several provisions
of federal law applicable to Amtrak's operations that limited its
ability to manage costs and maximize revenues.  In particular, the
act (1) repealed a statutory ban on contracting out work that would
result in employee layoffs, except for food and beverage service, and
(2) eliminated statutory and contractual labor protection
arrangements, effective May 31, 1998, that provided up to 6 years
compensation and benefits for employees who lose their jobs because
of the discontinuance of service on a route or such other covered
actions as the closure of a maintenance facility.\18 In addition, the
reform act established a $200 million cap on the amount of liability
claims, including punitive damages, that can be paid as a result of
an accident involving an Amtrak train.  Amtrak and FRA officials
stated that these reforms will provide few, if any, immediate
financial benefits and their longer-term benefits are unclear. 

Amtrak and FRA officials told us that the repeal of the statutory ban
on contracting out work that would result in layoffs will have
little, if any, immediate effect on Amtrak's financial performance. 
The act incorporated the statutory language on contracting out into
Amtrak's existing collective bargaining agreements and made
contracting-out issues subject to negotiation no later than November
1, 1999.  In the longer term, the repeal of this ban may provide
Amtrak with important flexibility in labor negotiations and in
controlling costs.  However, it will remain unclear how this reform
will affect Amtrak's financial performance until negotiations are
completed. 

Amtrak and FRA officials believe that the elimination of labor
protection arrangements is likely to have little, if any, immediate
effect on Amtrak's financial position.  Amtrak officials told us that
Amtrak paid $1.2 million in fiscal year 1997 in compensation to
employees affected by route discontinuances or certain other covered
actions.  They noted that the arrangements have resulted primarily in
wage differential payments for up to 6 years to employees who take
lower-paying jobs when their jobs are terminated and income
maintenance payments for up to 6 years to employees who lose their
positions entirely.  As of February 1998, 115 Amtrak employees were
receiving wage differential payments, and 21 employees were receiving
income maintenance payments.  Amtrak and FRA officials stated that
the long-term effect of eliminating existing labor protection
arrangements is unclear.  Amtrak and its unions are addressing this
issue in collective bargaining negotiations.  While Amtrak currently
does not have plans to close any of its 40 routes, the elimination of
these arrangements could become important if, for example, Amtrak's
market analysis of its route system results in a decision to
substantially reorganize the system. 

According to Amtrak and FRA officials, the $200 million cap on
liability claims is likely to have little financial effect on Amtrak
because this limit is significantly higher than the amounts Amtrak
has historically paid on liability claims--Amtrak's largest payment
was $35.5 million as a result of a 1987 accident in Chase, Maryland. 
(This accident also is the only Amtrak accident in which the total
payments for claims, including those of a freight railroad, exceeded
$100 million.) Amtrak officials noted that Amtrak has never purchased
insurance to cover claims of more than $200 million per accident. 
They added, however, that the liability cap probably will improve
Amtrak's relationship with the freight railroads whose track Amtrak
uses for its passenger service because the cap is a single cap for
all parties found liable for an accident, including freight
railroads. 


--------------------
\18 Under these arrangements, employees who lose their positions
entirely could elect an alternative one-time lump sum severance
payment. 


   AGENCY COMMENTS AND OUR
   EVALUATION
------------------------------------------------------------ Letter :6

We provided Amtrak and the Department of Transportation with a draft
of this report for review and comment.  We met with Amtrak officials,
including the Vice President for Finance and Administration and Chief
Financial Officer.  Amtrak stated that the report was accurate, but
it was concerned that the losses-per-passenger data presented in
table 1, which reflects fully allocated expenses including
depreciation and overhead, could lead policymakers to incorrect
inferences about dollar savings that might result from the closure of
a route.  Amtrak asked that we replace table 1 with table II.1, which
compares overall profits or losses per passenger with the results
when depreciation and system and route overhead expenses are
excluded.  We did not make this change primarily because the
Conference Report to the Department of Transportation and Related
Agencies Appropriations Act for Fiscal Year 1998 directed us to
consider all income and all costs in developing systemwide
performance rankings of all routes currently in service. 
Nevertheless, we clarified the report to note that the fully
allocated expenses do not represent potential cost savings to Amtrak
if a route is discontinued.  We also met with Department of
Transportation officials, including the Federal Railroad
Administration's Chief, Passenger Programs.  The Department stated
that the report fairly and accurately presented the issues.  Both
Amtrak and the Department provided clarifying information to improve
the report's technical accuracy that we incorporated as appropriate. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :7

To obtain the information in this report, we reviewed Amtrak's
revised strategic business plan for fiscal years 1998 through 2003,
approved by its Board of Directors in March 1998; its original
strategic business plan for fiscal years 1998 through 2000; its
annual report for 1997; its federal grant request for fiscal year
1999; and other related documents.  We also obtained financial and
other performance data for Amtrak as a whole and for each of its
routes for fiscal year 1994 through the first quarter of fiscal year
1998, and we examined Amtrak's financial performance report for the
first quarter of fiscal year 1998.  In addition, we interviewed
Amtrak officials at Amtrak's headquarters and its Intercity,
Northeast Corridor, and Amtrak West SBUs; Amtrak's former chief
financial officer; and FRA officials. 

While we did not verify the accuracy of Amtrak's financial data and
how Amtrak's route profitability system allocates costs to different
routes, we interviewed FRA officials and current and former Amtrak
financial officials, including SBU managers, about the reliability of
the data and the cost allocation procedures.  These officials told us
that Amtrak historically had problems with allocating its expenses to
specific routes and trains.  However, these officials added that
since Amtrak redesigned its route profitability system in fiscal year
1995, its cost allocation methodology has progressively improved,
enabling Amtrak's managers to use these data more effectively in
managing the route system.  We conducted our review from October 1997
through April 1998 in accordance with generally accepted government
auditing standards. 


---------------------------------------------------------- Letter :7.1

We are sending copies of this report to interested congressional
committees; the acting President of Amtrak; members of the Amtrak
Reform Council; the Secretary of Transportation; the Administrator of
FRA; and the Director, Office of Management and Budget.  We will also
make copies available to others upon request. 

If you or your staff have any questions about this report, please
contact me at (202) 512-3650.  Major contributors to this report are
Richard Cheston, Judy Guilliams-Tapia, Paul Lacey, and James
Ratzenberger. 

Phyllis F.  Scheinberg
Associate Director, Transportation Issues


AMTRAK'S CURRENT ROUTES, BY
STRATEGIC BUSINESS UNIT
=========================================================== Appendix I

Name                           Route
-----------------------------  ----------------------------------------------------------
Amtrak Intercity Strategic Business Unit (SBU)
-----------------------------------------------------------------------------------------
Auto Train                     Lorton, VA-Sanford, FL

California Zephyr              Chicago, IL-Salt Lake City, UT-Emeryville (San Francisco),
                               CA

Capitol Limited                Chicago, IL-Cleveland, OH-Pittsburgh, PA-Washington, DC

Cardinal                       Chicago, IL-Cincinnati, OH-Charleston, WV-Washington, DC

Carolinian                     New York, NY-Raleigh, NC-Charlotte, NC

Chicago-Pontiac                Chicago, IL-Detroit, MI, or Pontiac, MI

Chicago-St. Louis              Chicago, IL-St. Louis, MO

City of New Orleans            Chicago, IL-Memphis, TN-New Orleans, LA

Crescent                       New York, NY-Atlanta, GA-New Orleans, LA

Empire Builder                 Chicago, IL-St. Paul, MN-Spokane, WA,-Seattle, WA, or
                               Portland, OR

Hiawathas                      Chicago, IL-Milwaukee, WI

Illini                         Chicago, IL-Carbondale, IL

Illinois Zephyr                Chicago, IL-Quincy, IL

International                  Chicago, IL-Port Huron, MI-Toronto, Canada

Kansas City-St. Louis          Kansas City, MO-St. Louis, MO

Lake Shore Limited             Chicago, IL-Cleveland, OH-Albany, NY-Boston, MA, or New
                               York, NY

Pennsylvanian                  New York, NY-Philadelphia, PA-Pittsburgh, PA

Pere Marquette                 Chicago, IL-Grand Rapids, MI

Piedmont                       Raleigh, NC-Charlotte, NC

Silver Meteor                  New York, NY-Charleston, SC-Jacksonville, FL-Orlando, FL-
                               Miami, FL

Silver Palm\a                  New York, NY-Charleston, SC-Jacksonville, FL-Tampa, FL-
                               Miami, FL

Silver Star                    New York, NY-Columbia, SC-Jacksonville, FL-Orlando, FL-
                               Miami, FL

Southwest Chief                Chicago, IL-Albuquerque, NM-Los Angeles, CA

Sunset Limited                 Los Angeles, CA-San Antonio, TX-New Orleans, LA-Orlando,
                               FL

Texas Eagle                    Chicago, IL-Dallas, TX-San Antonio, TX
                               Chicago, IL-Dallas, TX-San Antonio, TX-Los Angeles, CA

Three Rivers\b                 Chicago, IL-Youngstown, OH-Pittsburgh, PA-Philadelphia,
                               PA-New York, NY


Northeast Corridor SBU
-----------------------------------------------------------------------------------------
Adirondack                     New York, NY-Albany, NY-Montreal, Canada

Clockers                       New York, NY-Philadelphia, PA

Empire                         New York, NY-Albany, NY
                               New York, NY-Albany, NY-Syracuse, NY-Niagara Falls, NY

Empire-Ethan Allen Express     New York, NY-Albany, NY-Rutland, VT

Metroliners                    New York, NY-Washington, DC

New York-Harrisburg            New York, NY-Philadelphia, PA-Harrisburg, PA

Northeast Direct               Boston, MA, or Springfield, MA-New York, NY-Washington,
                               DC, or Newport News, VA

Philadelphia-Harrisburg        Philadelphia, PA-Harrisburg, PA

Vermonter\c                    Washington, DC-New York, NY-St. Albans, VT


Amtrak West SBU
-----------------------------------------------------------------------------------------
Capitols                       Colfax, CA-Sacramento, CA-Oakland, CA-San Jose, CA

Coast Starlight                Seattle, WA-Emeryville (San Francisco), CA-Los Angeles, CA

Pacific Northwest Corridor     Eugene, OR-Seattle, WA, or Vancouver, Canada

San Diegans                    San Diego, CA-Los Angeles, CA, or Santa Barbara, CA, or
                               San Luis Obispo, CA

San Joaquins                   Oakland, CA-Bakersfield, CA
-----------------------------------------------------------------------------------------
Note:  In fiscal year 1995, Amtrak decentralized its organizational
structure by creating the Northeast Corridor SBU to manage passenger
service between Virginia and New England, the Amtrak West SBU to
manage passenger service along the West Coast, and the Intercity SBU
to manage all of Amtrak's remaining passenger service. 

\a Began service in November 1996. 

\b Replaced the Broadway Limited by initially providing service
between New York and Pittsburgh, which was subsequently extended to
Chicago. 

\c Replaced the Montrealer between Washington, D.C., and St.  Albans,
Vermont, with connecting Amtrak thruway bus service to Montreal. 

Source:  Amtrak. 


FINANCIAL PERFORMANCE OF AMTRAK'S
ROUTES
========================================================== Appendix II

This appendix presents information on (1) the effect of excluding
depreciation in calculating profit and loss per passenger for each
Amtrak route, fiscal year 1997; (2) the operating ratio of each
Amtrak route, fiscal years 1994 through 1997; (3) the profit or loss
of each Amtrak route, fiscal years 1994 through 1997; (4) revenues,
expenses, and profit or loss of each Amtrak route, fiscal year 1997;
(5) the ridership on each Amtrak route, fiscal years 1994 through
1997; (6) the profit or loss per passenger for each Amtrak route,
fiscal years 1994 through 1997; (7) the improved financial
performance of certain Amtrak routes as a result of state payments,
fiscal year 1997; (8) the load factor for each Amtrak route, fiscal
year 1997; (9) Amtrak routes discontinued since fiscal year 1994; and
(10) the segments of Amtrak routes discontinued since fiscal year
1994. 



                                        Table II.1
                         
                           Effect of Excluding Depreciation in
                         Calculating Profit or Loss per Passenger
                         for Each Amtrak Route, Fiscal Year 1997

                                          Profit or (loss) per passenger
                          --------------------------------------------------------------
                                               Train and   Train, route,   Train, route,
                                   Train           route      and system      and system
                              (excluding      (excluding      (excluding      (including
Name                       depreciation)   depreciation)   depreciation)   depreciation)
------------------------  --------------  --------------  --------------  --------------
Metroliners                          $42             $25             $19              $5
San Joaquins                           5             (3)             (9)            (11)
Carolinian                            10             (9)            (16)            (27)
Piedmont                              18               1            (19)            (42)
Capitols                               1             (7)            (15)            (15)
Auto Train                          (27)            (62)            (81)           (118)
Northeast Direct                       8            (10)            (15)            (29)
Pacific Northwest                    (3)            (14)            (24)            (26)
 Corridor
Illini                               (8)            (28)            (40)            (47)
Kansas City-St. Louis               (16)            (29)            (39)            (45)
Southwest Chief                     (73)           (132)           (151)           (180)
San Diegans                          (4)            (13)            (19)            (23)
Vermonter                           (12)            (35)            (41)            (58)
Lake Shore Limited                  (30)            (61)            (73)            (90)
Empire                              (15)            (28)            (34)            (38)
Adirondack                          (35)            (48)            (52)            (57)
Philadelphia-Harrisburg                1             (9)            (15)            (22)
Three Rivers                        (25)            (85)           (105)           (138)
Silver Meteor                       (40)            (76)            (88)           (120)
Empire Builder                      (66)           (104)           (118)           (136)
Illinois Zephyr                     (21)            (38)            (51)            (61)
International                       (13)            (32)            (42)            (47)
California Zephyr                   (83)           (117)           (130)           (149)
Capitol Limited                     (58)            (93)           (106)           (133)
New York-Harrisburg                  (2)            (15)            (21)            (37)
Pere Marquette                      (11)            (30)            (45)            (51)
Coast Starlight                     (56)            (73)            (81)            (92)
Silver Star                         (54)            (94)           (107)           (143)
Silver Palm                         (57)           (111)           (128)           (163)
Crescent                            (71)           (117)           (133)           (163)
Clockers                             (3)             (7)             (8)            (11)
Pennsylvanian                       (10)            (29)            (38)            (53)
Chicago-St. Louis                   (26)            (47)            (58)            (64)
Empire-Ethan Allen                  (30)            (48)            (57)            (79)
 Express
City of New Orleans                 (70)           (100)           (113)           (130)
Hiawathas                           (12)            (30)            (45)            (50)
Texas Eagle                        (116)           (161)           (176)           (201)
Sunset Limited                     (164)           (213)           (233)           (284)
Cardinal                            (68)            (96)           (106)           (136)
Chicago-Pontiac                     (25)            (49)            (59)            (66)
========================================================================================
Total                               ($8)           ($27)           ($35)           ($47)
----------------------------------------------------------------------------------------
Note:  The first three columns of numbers are based on Amtrak's fully
allocated cost system, except that they exclude depreciation, which
is a noncash expense to the corporation.  The first column,
train-related profit or loss per passenger, reflects revenues minus
expenses that generally vary with the number of trains operated.  The
second column, the sum of train- and route-related profit or loss per
passenger, adds such costs as maintaining Amtrak-owned stations,
track roadbed, and other facilities.  The third column adds costs
associated with managing the entire system to those in the second
column.  The fourth column, the fully allocated profit or loss per
passenger, includes all costs of operating Amtrak's intercity
passenger trains, including depreciation. 

Source:  Amtrak. 



                                        Table II.2
                         
                          Operating Ratio of Each Amtrak Route,
                              Fiscal Years 1994 Through 1997

Name                        FY 1994           FY 1995           FY 1996           FY 1997
-----------------  ----------------  ----------------  ----------------  ----------------
Metroliners                    1.13              1.02              0.91              0.94
San Joaquins                   1.71              1.50              1.35              1.23
Carolinian                     1.87              1.51              1.44              1.45
Piedmont                         \a              0.62              2.08              1.48
Capitols                       1.35              1.87              2.17              1.52
Auto Train                     1.18              1.19              1.29              1.56
Northeast Direct               1.85              1.72              1.59              1.65
Pacific Northwest              3.81              2.16              2.38              1.76
 Corridor
Illini                         2.50              2.50              1.69              1.82
Kansas City-St.                2.25              2.25              1.86              1.91
 Louis
Southwest Chief                1.94              1.96              1.83              1.92
San Diegans                    2.58              2.34              2.01              1.96
Vermonter                      3.60              3.76              2.68              2.00
Lake Shore                     2.10              2.10              2.03              2.01
 Limited
Empire                         2.01              2.03              2.34              2.03
Adirondack                     1.90              1.94              2.28              2.10
Philadelphia-                  4.23              5.76              1.76              2.15
 Harrisburg
Three Rivers                   2.27              2.03              1.64              2.18
Silver Meteor                  2.33              1.94              2.09              2.18
Empire Builder                 2.13              1.99              2.26              2.20
Illinois Zephyr                2.28              2.20              2.00              2.21
International                  2.71              2.77              2.79              2.23
California Zephyr              1.94              2.10              2.32              2.24
Capitol Limited                2.29              2.42              2.34              2.27
New York-                      2.52              1.96              2.26              2.30
 Harrisburg
Pere Marquette                 2.19              1.88              2.49              2.43
Coast Starlight                2.37              2.61              2.77              2.43
Silver Star                    2.39              2.10              2.26              2.47
Silver Palm                      \b                \b                \b              2.48
Crescent                       2.53              2.34              2.40              2.56
Clockers                       1.85              1.70              1.97              2.59
Desert Wind                    2.48              2.22              2.56            2.64\c
Pennsylvanian                  2.09              2.21              2.11              2.70
Chicago-St. Louis              3.21              3.21              2.56              2.73
Empire-Ethan                     \d                \d                \d              2.75
 Allen Express
City of New                    2.30              2.39              2.88              2.78
 Orleans
Hiawathas                      3.96              3.48              2.59              2.92
Texas Eagle                    2.36              2.57              3.14              2.99
Pioneer                        2.81              2.94              2.85            3.11\c
Sunset Limited                 2.56              2.83              3.47              3.16
Cardinal                       3.19              3.21              3.33              3.29
Chicago-Pontiac                3.03              3.15              3.48              3.66
Gulf Coast                       \e                \e              2.10           10.32\e
 Limited
=========================================================================================
Total                          1.99              1.88              1.85              1.86
-----------------------------------------------------------------------------------------
Note:  A route's operating ratio is its expenses divided by its
revenues.  An operating ratio less than 1.0 means that the route was
profitable, while an operating ratio greater than 1.0 means that the
route lost money.  A ratio greater than 2.0 means that the route's
expenses were at least two times greater than its revenues during the
fiscal year. 

\a Service was introduced in May 1995. 

\b Service was introduced in Nov.  1996. 

\c Service was discontinued in May 1997. 

\d Service was introduced in Dec.  1996. 

\e Experimental service was introduced in June 1996 and discontinued
in Mar.  1997. 

Source:  Amtrak's route profitability system. 



                                        Table II.3
                         
                           Profit or Loss of Each Amtrak Route,
                              Fiscal Years 1994 Through 1997

                                  (Dollars in millions)

Name                        FY 1994           FY 1995           FY 1996           FY 1997
-----------------  ----------------  ----------------  ----------------  ----------------
Metroliners                 ($17.6)            ($2.4)             $14.2              $9.6
San Joaquins                 (16.7)            (13.0)             (9.9)             (7.2)
Carolinian                    (8.2)             (9.5)             (5.3)             (6.2)
Piedmont                         \a               0.4             (1.8)             (1.8)
Capitols                      (4.8)             (8.0)            (13.7)             (7.4)
Auto Train                    (7.2)             (8.2)            (13.0)            (28.4)
Northeast Direct            (189.7)           (159.0)           (142.0)           (160.4)
Pacific Northwest             (4.5)             (8.7)            (13.6)             (8.9)
 Corridor
Illini                        (4.8)             (5.2)             (3.3)             (4.1)
Kansas City-St.               (7.1)             (6.4)             (6.0)             (7.0)
 Louis
Southwest Chief              (36.6)            (38.2)            (37.8)            (46.2)
San Diegans                  (37.7)            (33.7)            (36.8)            (37.7)
Vermonter                    (16.4)            (13.0)             (7.1)             (4.9)
Lake Shore                   (25.5)            (27.9)            (30.6)            (31.8)
 Limited
Empire                       (35.1)            (36.6)            (47.8)            (40.6)
Adirondack                    (3.6)             (4.4)             (5.8)             (5.6)
Philadelphia-                 (8.4)             (8.6)             (3.8)             (4.6)
 Harrisburg
Three Rivers                 (24.4)            (19.0)             (7.4)            (19.4)
Silver Meteor                (43.5)            (28.1)            (32.8)            (30.6)
Empire Builder               (51.4)            (37.8)            (41.1)            (47.0)
Illinois Zephyr               (3.7)             (3.7)             (3.6)             (5.0)
International                 (6.0)             (6.8)             (8.1)             (5.8)
California Zephyr            (41.3)            (42.5)            (34.2)            (43.6)
Capitol Limited              (17.0)            (21.8)            (27.6)            (23.8)
New York-                    (10.0)             (8.6)             (9.3)            (16.1)
 Harrisburg
Pere Marquette                (2.5)             (1.7)             (2.9)             (3.3)
Coast Starlight              (36.4)            (39.9)            (44.6)            (46.0)
Silver Star                  (41.8)            (33.4)            (39.3)            (38.7)
Silver Palm                      \b                \b                \b            (30.6)
Crescent                     (41.9)            (32.1)            (30.8)            (40.3)
Clockers                     (12.0)             (9.6)            (12.2)            (17.1)
Desert Wind                  (20.6)            (14.6)            (23.2)          (13.9)\c
Pennsylvanian                 (6.2)             (7.8)             (6.6)             (8.5)
Chicago-St. Louis            (16.6)            (17.8)            (16.2)            (16.4)
Empire-Ethan                     \d                \d                \d             (2.3)
 Allen Express
City of New                  (16.0)            (17.0)            (20.2)            (22.6)
 Orleans
Hiawathas                    (16.3)            (14.5)            (15.6)            (17.9)
Texas Eagle                  (19.1)            (18.7)            (22.3)            (19.2)
Pioneer                      (16.3)            (14.6)            (19.0)          (11.8)\c
Sunset Limited               (28.4)            (31.8)            (39.8)            (35.3)
Cardinal                     (12.9)            (12.8)             (9.8)            (10.8)
Chicago-Pontiac              (18.7)            (19.9)            (24.1)            (27.5)
Gulf Coast                       \e                \e           (0.6)\e           (2.5)\e
 Limited
Routes closed                (31.4)            (18.6)                 0                 0
 before 1997\f
=========================================================================================
Total                      ($958.3)          ($855.4)          ($855.3)          ($949.5)
-----------------------------------------------------------------------------------------
Note:  Amtrak's financial data for individual routes include only the
revenues and expenses associated with providing intercity passenger
service along the route. 

\a Service was introduced in May 1995. 

\b Service was introduced in Nov.  1996. 

\c Service was discontinued in May 1997. 

\d Service was introduced in Dec.  1996. 

\e Experimental service was introduced in June 1996 and discontinued
in Mar.  1997. 

\f Includes losses of the Atlantic City Express, Palmetto, and
Hoosier routes, which were closed during fiscal year 1995. 

Source:  Amtrak's route profitability system. 



                                               Table II.4
                                
                                 Revenues, Expenses, and Profit or Loss
                                 of Each Amtrak Route, Fiscal Year 1997

                                         (Dollars in millions)

                                                            Expenses
                                       --------------------------------------------------
                                Total                                                            Profit
Name                         revenues       Train\a     Route\b    System\c         Total        (loss)
-----------------------  ------------  ------------  ----------  ----------  ------------  ------------
Metroliners                    $173.1         $90.8       $60.0       $12.8        $163.5          $9.6
San Joaquins                     31.3          28.8         5.1         4.6          38.6         (7.2)
Carolinian                       13.6          12.4         5.9         1.5          19.8         (6.2)
Piedmont                          3.8           4.0         0.8         0.9           5.6         (1.8)
Capitols                         14.1          13.8         3.6         4.1          21.5         (7.4)
Auto Train                       50.7          64.8         9.8         4.5          79.1        (28.4)
Northeast Direct                245.2         215.7       163.4        26.5         405.6       (160.4)
Pacific Northwest                11.7          13.6         3.6         3.3          20.5         (8.9)
 Corridor
Illini                            5.1           6.3         1.8         1.1           9.2         (4.1)
Kansas City-St. Louis             7.6          10.9         2.1         1.6          14.6         (7.0)
Southwest Chief                  50.3          74.7        17.0         4.9          96.5        (46.2)
San Diegans                      39.1          51.3        14.9        10.6          76.8        (37.7)
Vermonter                         4.9           7.1         2.3         0.5           9.9         (4.9)
Lake Shore Limited               31.5          47.5        11.4         4.4          63.3        (31.8)
Empire                           39.3          59.9        14.2         5.8          79.8        (40.6)
Adirondack                        5.1           9.0         1.2         0.4          10.7         (5.6)
Philadelphia-                     4.0           4.6         3.0         1.0           8.6         (4.6)
 Harrisburg
Three Rivers                     16.4          21.5        11.6         2.7          35.8        (19.4)
Silver Meteor                    26.0          41.1        12.3         3.3          56.6        (30.6)
Empire Builder                   39.4          67.4        14.0         4.9          86.4        (47.0)
Illinois Zephyr                   4.1           6.6         1.4         1.1           9.2         (5.0)
International                     4.7           6.9         2.4         1.2          10.5         (5.8)
California Zephyr                35.2          64.3        10.8         3.7          78.8        (43.6)
Capitol Limited                  18.8          33.6         6.6         2.4          42.6        (23.8)
New York-Harrisburg              12.3          14.8        10.7         3.0          28.4        (16.1)
Pere Marquette                    2.3           3.5         1.2         1.0           5.7         (3.3)
Coast Starlight                  32.2          65.5         8.6         4.1          78.2        (46.0)
Silver Star                      26.3          46.9        14.4         3.7          65.0        (38.7)
Silver Palm                      20.6          34.6        13.5         3.1          51.1        (30.6)
Crescent                         25.8          46.7        15.4         4.0          66.1        (40.3)
Clockers                         10.7          17.9         8.0         2.0          27.9        (17.1)
Desert Wind\d                     8.5          17.9         3.5         1.0          22.4        (13.9)
Pennsylvanian                     5.0           7.7         4.3         1.5          13.5         (8.5)
Chicago-St. Louis                 9.5          17.6         5.5         2.7          25.9        (16.4)
Empire-Ethan Allen                1.3           2.8         0.6         0.3           3.6         (2.3)
 Express
City of New Orleans              12.7          27.4         5.5         2.4          35.2        (22.6)
Hiawathas                         9.3          15.3         6.5         5.4          27.2        (17.9)
Texas Eagle                       9.6          22.7         4.6         1.5          28.8        (19.2)
Pioneer\d                         5.6          13.7         2.9         0.9          17.5        (11.8)
Sunset Limited                   16.3          42.3         7.0         2.4          51.7        (35.3)
Cardinal                          4.7          12.4         2.3         0.9          15.6        (10.8)
Chicago-Pontiac                  10.3          23.5        10.5         3.8          37.8        (27.5)
Gulf Coast Limited\d              0.3           1.8         0.4         0.5           2.8         (2.5)
=======================================================================================================
Total                        $1,098.5      $1,391.5      $504.6      $151.9      $2,047.9      ($949.5)
-------------------------------------------------------------------------------------------------------
Note:  Amtrak's financial data for individual routes include only the
revenues and expenses associated with providing intercity passenger
service along the route.  These core services are passenger-related
service, mail and express service, other transportation services, and
states' payments supporting certain routes. 

\a Primarily includes the train crew's salaries, fuel and power
costs, all maintenance of train equipment, depreciation and debt
interest for train locomotives and passenger cars, payments to
freight railroads for the use of their track, and marketing and sales
support. 

\b Primarily includes maintenance and depreciation for Amtrak-owned
stations, track roadbed, and other facilities, as well as
reservations and management support computer systems. 

\c Primarily includes staff salaries, rent, and associated expenses
for corporate and SBU headquarters operations. 

\d Amtrak discontinued service on the Desert Wind, Pioneer, and Gulf
Coast Limited during fiscal year 1997. 

Source:  Amtrak's route profitability system. 



                                        Table II.5
                         
                          Ridership on Each Amtrak Route, Fiscal
                                 Years 1994 Through 1997

                                (Passengers in thousands)

Name                        FY 1994           FY 1995           FY 1996           FY 1997
-----------------  ----------------  ----------------  ----------------  ----------------
Metroliners                   2,025             2,001             2,011             2,081
San Joaquins                    554               524               567               688
Carolinian                      206               445               232               231
Piedmont                          0               9\a                29                43
Capitols                        367               353               455               490
Auto Train                      207               248               232               241
Northeast Direct            5,880\b           5,871\b             5,665             5,548
Pacific Northwest               127               268               304               335
 Corridor
Illini                          108               101                85                89
Kansas City-St.                 160               143               131               156
 Louis
Southwest Chief                 262               255               236               257
San Diegans                   1,629             1,445             1,566             1,635
Vermonter                       125                96                75                85
Lake Shore                      328               358               352               355
 Limited
Empire                        1,071             1,046               979             1,057
Adirondack                       85                96                95                99
Philadelphia-                   214               198               177               215
 Harrisburg
Three Rivers                    184               163               250               140
Silver Meteor                   421               374               346               255
Empire Builder                  453               372               310               347
Illinois Zephyr                  83                82                77                82
International                   116               115               110               124
California Zephyr               379               322               224               292
Capitol Limited                 176               186               189               179
New York-                       334               438               342               442
 Harrisburg
Pere Marquette                   70                51                54                65
Coast Starlight                 452               432               402               497
Silver Star                     395               398               353               270
Silver Palm                       0                 0                 0             188\c
Crescent                        316               270               220               247
Clockers                      1,711             1,746             1,623             1,493
Desert Wind                     147               120               143              80\d
Pennsylvanian                   178               233               202               160
Chicago-St. Louis               292               285               255               256
Empire-Ethan                      0                 0                 0              29\e
 Allen Express
City of New                     216               195               161               174
 Orleans
Hiawathas                       447               379               320               361
Texas Eagle                     149               123                98                95
Pioneer                         113                88                95              51\d
Sunset Limited                  175               161               144               124
Cardinal                        107               108                80                80
Chicago-Pontiac                 395               372               375               418
Gulf Coast                        0                 0              13\f              21\f
 Limited
Routes closed                   467               207                 0                 0
 before 1997\g
Special trains\h                 42                47                98               113
=========================================================================================
Total                        21,169            20,725            19,674            20,191
-----------------------------------------------------------------------------------------
\a Service was introduced in May 1995. 

\b Includes ridership for the route between New York City and Newport
News, Virginia. 

\c Service was introduced in Nov.  1996. 

\d Service was discontinued in May 1997. 

\e Service was introduced in Dec.  1996. 

\f Experimental service was introduced in June 1996 and discontinued
in Mar.  1997. 

\g Includes ridership on the Atlantic City Express, Palmetto, and
Hoosier routes, which were closed during fiscal year 1995. 

\h Specially contracted trains that are not part of Amtrak's regular
intercity or commuter passenger service. 

Source:  Amtrak. 



                                        Table II.6
                         
                          Profit or Loss per Passenger for Each
                         Amtrak Route, Fiscal Years 1994 Through
                                           1997

Name                        FY 1994           FY 1995           FY 1996           FY 1997
-----------------  ----------------  ----------------  ----------------  ----------------
Metroliners                    ($9)              ($1)                $7                $5
San Joaquins                   (30)              (25)              (17)              (11)
Carolinian                     (40)              (21)              (23)              (27)
Piedmont\                        \a              44\a              (62)              (42)
Capitols                       (13)              (23)              (30)              (15)
Auto Train                     (35)              (33)              (56)             (118)
Northeast Direct               (32)              (27)              (25)              (29)
Pacific Northwest              (35)              (32)              (45)              (26)
 Corridor
Illini                         (44)              (51)              (39)              (47)
Kansas City-St.                (44)              (45)              (46)              (45)
 Louis
Southwest Chief               (140)             (150)             (160)             (180)
San Diegans                    (23)              (23)              (23)              (23)
Vermonter                     (131)             (135)              (95)              (58)
Lake Shore                     (78)              (78)              (87)              (90)
 Limited
Empire                         (33)              (35)              (49)              (38)
Adirondack                     (42)              (46)              (61)              (57)
Philadelphia-                  (39)              (43)              (21)              (22)
 Harrisburg
Three Rivers                  (133)             (117)              (30)             (138)
Silver Meteor                 (103)              (75)              (95)             (120)
Empire Builder                (113)             (102)             (133)             (136)
Illinois Zephyr                (45)              (45)              (47)              (61)
International                  (52)              (59)              (74)              (47)
California Zephyr             (109)             (132)             (153)             (149)
Capitol Limited                (97)             (117)             (146)             (133)
New York-                      (30)              (20)              (27)              (37)
 Harrisburg
Pere Marquette                 (36)              (33)              (54)              (51)
Coast Starlight                (81)              (92)             (111)              (92)
Silver Star                   (106)              (84)             (111)             (143)
Silver Palm                      \b                \b                \b             (163)
Crescent                      (133)             (119)             (140)             (163)
Clockers                        (7)               (5)               (8)              (11)
Desert Wind                   (140)             (122)             (162)           (174)\c
Pennsylvanian                  (35)              (33)              (33)              (53)
Chicago-St. Louis              (57)              (62)              (64)              (64)
Empire-Ethan                     \d                \d                \d              (79)
 Allen Express
City of New                    (74)              (87)             (125)             (130)
 Orleans
Hiawathas                      (36)              (38)              (49)              (50)
Texas Eagle                   (128)             (152)             (228)             (201)
Pioneer                       (144)             (166)             (200)           (231)\c
Sunset Limited                (162)             (198)             (276)             (284)
Cardinal                      (120)             (119)             (123)             (136)
Chicago-Pontiac                (47)              (53)              (64)              (66)
Gulf Coast                       \e                \e            (46)\e             (119)
 Limited
=========================================================================================
Total                         ($46)             ($41)             ($44)             ($47)
-----------------------------------------------------------------------------------------
Note:  Amtrak's financial system fully allocates all expenses of
operating intercity passenger trains to routes, including the
depreciation of its locomotives, passenger cars, and railroad tracks
and equipment. 

\a Service was introduced in May 1995. 

\b Service was introduced in Nov.  1996. 

\c Service was discontinued in May 1997. 

\d Service was introduced in Dec.  1996. 

\e Experimental service was introduced in June 1996 and discontinued
in Mar.  1997. 

Source:  GAO's analysis of Amtrak's data. 



                                        Table II.7
                         
                            Improved Financial Performance of
                           Certain Amtrak Routes as a Result of
                             State Support, Fiscal Year 1997

                                              Fiscal year        Loss per        Loss per
                                             1997 payment       passenger       passenger
                                              (dollars in       excluding       including
Name                       State                millions)  state payments  state payments
-------------------------  --------------  --------------  --------------  --------------
San Joaquins               California               $16.8           ($35)           ($11)
Carolinian                 North Carolina             1.8            (35)            (27)
Piedmont\                  North Carolina             3.2           (116)            (42)
Capitols                   California                 8.4            (32)            (15)
Pacific Northwest          Oregon/                   1.2/            (41)            (26)
 Corridor                   Washington                3.6
Illini                     Illinois                   2.1            (70)            (47)
Kansas City-St. Louis      Missouri                   3.7            (69)            (45)
San Diegans                California                16.2            (33)            (23)
Vermonter                  Vermont                    0.5            (64)            (58)
Adirondack                 New York                   1.0            (67)            (57)
Illinois Zephyr            Illinois                   1.8            (83)            (61)
International              Michigan                   1.3            (57)            (47)
Pere Marquette             Michigan                   0.8            (63)            (51)
Philadelphia-Harrisburg    Pennsylvania               2.0            (41)            (22)
Chicago-St. Louis          Illinois                   2.4            (73)            (64)
Empire-Ethan Allen         Vermont                    0.1            (83)            (79)
 Express
Hiawathas                  Illinois/                 0.6/            (59)            (50)
                            Wisconsin                 2.7
-----------------------------------------------------------------------------------------
Note:  State payments totaled $70.1 million in fiscal year 1997. 

Source:  GAO's analysis of Amtrak data. 



                                        Table II.8
                         
                            Load Factor for Each Amtrak Route,
                                     Fiscal Year 1997

                            (Passenger miles and seat miles in
                                        thousands)

Name                            Passenger miles\a        Seat miles\b       Load factor\c
-----------------------------  ------------------  ------------------  ------------------
Metroliners                               298,159             622,880                47.9
San Joaquins                              103,077             285,946                36.0
Carolinian                                 72,898             175,178                41.6
Piedmont                                    5,539              14,103                39.3
Capitols                                   40,963             123,682                33.1
Auto Train                                207,760             344,231                60.4
Northeast Direct                          912,619           2,355,817                38.7
Pacific Northwest Corridor                 53,178             129,270                41.1
Illini                                     18,333              55,568                33.0
Kansas City-St. Louis                      31,704              77,728                40.8
Southwest Chief                           299,777             518,839                57.8
San Diegans                               156,282             476,249                32.8
Vermonter                                  26,166              58,742                44.5
Lake Shore Limited                        204,583             324,019                63.1
Empire                                    204,193             507,264                40.3
Adirondack                                 27,555              63,627                43.3
Philadelphia-Harrisburg                    15,848              40,030                39.6
Three Rivers                               69,766             131,152                53.2
Silver Meteor                             179,609             318,241                56.4
Empire Builder                            315,976             511,829                61.7
Illinois Zephyr                            14,315              43,208                33.1
International                              24,582              98,339                25.0
California Zephyr                         263,666             489,726                53.8
Capitol Limited                            97,698             181,456                53.8
New York-Harrisburg                        40,651             143,858                28.3
Pere Marquette                              9,614              25,031                38.4
Coast Starlight                           234,683             387,272                60.6
Silver Star                               181,178             331,593                54.6
Silver Palm\d                             125,633             285,428                44.0
Crescent                                  152,966             301,045                50.8
Clockers                                   71,968             137,387                52.4
Desert Wind\e                              75,610             144,306                52.4
Pennsylvanian                              26,919             105,026                25.6
Chicago-St. Louis                          45,779             133,337                34.3
Empire-Ethan Allen Express\f                5,890              16,673                35.3
City of New Orleans                        96,071             199,990                48.0
Hiawathas                                  29,442              85,804                34.3
Texas Eagle                                79,403             160,081                49.6
Pioneer\e                                  50,522             111,201                45.4
Sunset Limited                            144,011             274,711                52.4
Cardinal                                   30,811              60,672                50.8
Chicago-Pontiac                            84,372             201,005                42.0
Gulf Coast Limited\g                        2,312               7,161                32.3
Special trains\h                           34,122              35,247                96.8
=========================================================================================
Total                                   5,166,203          11,093,953                46.6
-----------------------------------------------------------------------------------------
\a The total number of passengers that ride Amtrak trains times the
total miles that they travel. 

\b The total number of seats available on each Amtrak train times the
number of miles the train travels. 

\c Passenger miles divided by seat miles.  Load factor measures the
extent to which each train's seats are occupied by passengers. 

\d Service was introduced in Nov.  1996. 

\e Service was discontinued in May 1997. 

\f Service was introduced in Dec.  1996. 

\g Experimental service was introduced in June 1996 and discontinued
in Mar.  1997. 

\h Specially contracted trains that are not part of Amtrak's regular
intercity or commuter passenger service. 

Source:  Amtrak. 



                               Table II.9
                
                   Amtrak's Routes Discontinued Since
                            Fiscal Year 1994

                                Date
Route                           discontinued    Service affected
------------------------------  --------------  ----------------------
Desert Wind                     May 1997        Salt Lake City, UT-
                                                Los Angeles, CA

Pioneer\a                       May 1997        Denver, CO-Seattle, WA

Gulf Coast Limited\b            Mar. 1997       New Orleans, LA-
                                                Mobile, AL

Loop\c                          June 1996       Chicago, IL-
                                                Springfield, IL

Hoosier State\d                 Sep. 1995       Chicago, IL-
                                                Indianapolis, IN

Atlantic City Express           Apr. 1995       Philadelphia, PA-
                                                Atlantic City, NJ

Gulf Breeze\e                   Apr. 1995       Birmingham, AL-
                                                Mobile, AL

Palmetto\f                      Feb. 1995       New York, NY-
                                                Jacksonville, FL
----------------------------------------------------------------------
\a The Pacific Northwest Corridor provides service between Portland
and Seattle. 

\b The Sunset Limited provides service between New Orleans and Mobile
three times a week. 

\c The Chicago-St.Louis route provides service between Chicago and
Springfield three times daily. 

\d The Cardinal provides service between Chicago and Indianapolis
three times a week. 

\e Train service was replaced with Amtrak's thruway bus service. 

\f In Nov.  1996, Amtrak initiated the Silver Palm, which provides
service between New York and Miami. 



                              Table II.10
                
                Segments of Amtrak's Routes Discontinued
                         Since Fiscal Year 1994

                                Date
Route                           discontinued    Service affected
------------------------------  --------------  ----------------------
Sunset Limited\a                Nov. 1996       Sanford, FL-Miami, FL

Broadway Limited\b              Sep. 1995       Chicago, IL-
                                                Pittsburgh, PA

Cardinal\c                      Sep. 1995       Washington, D.C.-New
                                                York, NY

Texas Eagle\d                   Sep. 1995       Dallas, TX-Houston, TX

Lake Cities\d                   Apr. 1995       Detroit, MI-Toledo, OH

Montrealer\e                    Apr. 1995       St. Albans, VT-
                                                Montreal, Canada

Northeast Direct\f              Apr. 1995       Boston, MA-
                                                Springfield, MA
----------------------------------------------------------------------
\a Service was extended from Sanford to Orlando in Aug.  1997. 

\b Replaced by the Three Rivers, which initially provided service
between New York City and Pittsburgh.  In Nov.  1996, Amtrak extended
the service to Chicago. 

\c Northeast Direct trains and Metroliners provide frequent service
between Washington, D.C., and New York City. 

\d Train service was replaced with Amtrak's thruway bus service. 

\e Replaced by the Vermonter between Washington, D.C., and St. 
Albans, Vermont, with connecting Amtrak thruway bus service to
Montreal. 

\f The Lake Shore Limited provides daily service between Boston and
Springfield.  In Nov.  1996, Northeast Direct service was restored
with a single frequency. 

Source:  Amtrak. 


AMTRAK'S FEDERAL OPERATING AND
CAPITAL SUPPORT
========================================================= Appendix III



                                       Table III.1
                         
                             Comparison of Amtrak's Original
                            Glidepath for Eliminating Federal
                         Operating Subsidies by 2002 With Federal
                         Appropriations and the Administration's
                                     Budget Proposal

                                  (Dollars in millions)

                Amtrak's calculation of the federal
                         operating subsidy
              ----------------------------------------
                                                              Total federal
                                                         appropriations for
                              Retirement                          operating
Fiscal year      Glidepath       payment         Total           expenses\a    Difference
------------  ------------  ------------  ------------  -------------------  ------------
1995                  $392          $150          $542                 $542            $0
1996                   260           120           380                305\b          (75)
1997                   250           142           392                  365          (27)
1998                   225           142           367                  344          (23)
1999                   150           142           292                292\c             0
2000                   100           142           242                242\c             0
2001                    50           142           192                192\c             0
2002                     0           142           142                142\c             0
-----------------------------------------------------------------------------------------
Note:  Amtrak's original glidepath would eliminate federal operating
subsidies by 2002, except that the federal government would continue
its payments to the Railroad Retirement Account.  Amtrak's federal
grant request for fiscal year 1999 revised the glidepath to include
an additional $84 million in fiscal year 1999 to make up for federal
operating support that was below the glidepath in prior years. 

\a Includes the federal contribution to the Railroad Retirement
Account.  The House Committee on Appropriations has disagreed with
Amtrak on how the federal railroad retirement payment is calculated. 

\b Excludes an additional $100 million appropriated in fiscal year
1996 to pay for Amtrak's one-time reorganization costs. 

\c The administration's budget proposal for fiscal year 1999 follows
Amtrak's request for the glidepath and the federal railroad
retirement payment. 

Source:  Amtrak and the administration's fiscal year 1999 budget. 



                              Table III.2
                
                 Amtrak's Revenues and Expenses, Fiscal
                        Years 1995 Through 1997

                         (Dollars in millions)

Revenues/expenses                  FY 1995       FY 1996       FY 1997
----------------------------  ------------  ------------  ------------
Revenues
----------------------------------------------------------------------
Core revenue
Passenger related                   $874.4        $900.7        $963.9
Mail and express                      60.9          66.1          69.7
Other transportation                 174.9         147.9         122.6
State contribution                    35.7          64.2          70.1
Subtotal                           1,145.9       1,178.9       1,226.3
Commuter                             212.8         234.4         241.6
Reimbursable                         107.3         107.5          91.1
Commercial development                30.9            34       114.7\a
Total revenues                     1,496.9       1,554.8       1,673.7

Expenses
----------------------------------------------------------------------
Core expenses                      1,995.7       1,955.4     2,096.5\b
Commuter                             195.0         218.5         204.1
Reimbursable                         114.4          98.4          86.2
Commercial development                 0.0           9.7          11.4
Overhauls                               \c          36.4          37.4
======================================================================
Total expenses                     2,305.1       2,318.4       2,435.6
======================================================================
Net profit/(loss)                 ($808.2)      ($763.6)      ($761.9)
----------------------------------------------------------------------
\a Primarily one-time sources of income, including (1) $45 million
from the sale of telecommunications right-of-way to Qwest Telecom;
(2) $11 million from the sale of land in Providence, Rhode Island;
(3) $5.7 million from the sale of the east end of the concourse at
Penn Station in New York City to New Jersey Transit; and (4) $3
million from the sale of telecommunications rights to OmniPoint. 

\b The Omnibus Consolidated Appropriations Act for Fiscal Year 1997
provided $22.5 million for the costs associated with continuing
service on six routes proposed for closure for an additional 6
months.  According to Amtrak, this funding was $13.5 million less
than the actual cost. 

\c Amtrak's fiscal year 1995 data did not separately identify
overhaul expenses. 

Source:  Amtrak. 



                              Table III.3
                
                 Amtrak's Overall Losses, Fiscal Years
                           1995 Through 1997

                         (Dollars in millions)

Budget category                    FY 1995       FY 1996       FY 1997
----------------------------  ------------  ------------  ------------
Revenues                          $1,496.9      $1,554.8      $1,673.7
Expenses                           2,305.1       2,318.4       2,435.6
Net profit/(loss)                  (808.2)       (763.6)       (761.9)
Federal operating grants             392.0         285.0         222.5
Federal capital -interest              0.0           0.0          42.0
Federal capital -equipment             0.0          36.4          37.4
 overhauls and maintenance
Federal funding for excess           150.0         120.0         142.0
 railroad retirement taxes\a
Profit/(loss) after federal        (266.2)       (322.2)       (318.0)
 subsidies
Non-cash expenses\b                  254.0         240.0         247.6
======================================================================
Overall loss                       ($12.2)       ($82.2)       ($70.4)
----------------------------------------------------------------------
\a Amtrak is required to participate in the railroad retirement and
unemployment systems.  Each participating railroad pays a portion of
the costs for all retirement and unemployment benefits in the
industry.  Amtrak's payments exceed its specific retirement and
unemployment costs. 

\b Primarily depreciation. 

Source:  Amtrak. 



                                       Table III.4
                         
                         Amtrak's Draft Capital Investment Plan,
                              Fiscal Years 1998 Through 2003

                                  (Dollars in millions)

Category                 1998      1999      2000      2001      2002      2003     Total
-------------------  --------  --------  --------  --------  --------  --------  --------
High-speed rail        $609.0    $489.9    $357.7    $118.5     $83.7     $72.7  $1,731.5
Other business           30.3      44.1       0.8       0.8       0.8       0.5      77.3
 development
Overhauls\a             126.6      73.9      69.5      76.2      71.1      79.8     497.0
Refleeting\b            334.3      45.8      53.2       5.6       5.6       5.6     450.0
Life safety\c            42.8      39.7      41.8      41.8      41.8      41.8     249.7
Operational              81.9     137.9     162.8     180.0     173.7     169.3     905.2
 reliability\d
Yards, shops and         55.4     173.4      82.8      67.0      60.0      46.1     484.8
 stations
Technology               22.3      69.5      38.8      32.6      33.3      26.8     223.4
Discretionary             0.0      37.1      47.0      53.4      50.6      44.7     232.8
Mandatory\e              71.5      95.5      76.3      89.9      98.4     141.1     572.7
Preliminary               6.9      17.3      10.0       0.0       0.0       0.0      34.2
 engineering
=========================================================================================
Total capital        $1,381.0  $1,224.0    $940.2    $665.8    $619.1    $628.3  $5,458.5
-----------------------------------------------------------------------------------------
Note:  Amtrak's Board of Directors has approved capital spending only
for fiscal year 1998; spending in subsequent years is preliminary. 
Amtrak's management currently is developing a capital plan for fiscal
years 1999 to 2003 and plans to present it to the Board in September
1998. 

\a Heavy and progressive overhauls of equipment designed to reduce
maintenance costs. 

\b Replacement of old locomotives and passenger cars with new or
remanufactured equipment. 

\c Primarily improvements or repairs to aging or damaged
infrastructure and equipment. 

\d Primarily state-of-good-repair maintenance of the Northeast
Corridor. 

\e Primarily debt service. 

Source:  Amtrak, "Strategic Business Plan:  FY 1998 - FY 2000," Sept. 
23, 1997. 



                                       Table III.5
                         
                           Proposed Use of Federal Funds Under
                         Amtrak's Original Glidepath and Federal
                         Transit Administration (FTA) Approaches,
                              Fiscal Years 1999 Through 2003

                                  (Dollars in millions)

Use of funds             1999      2000      2001      2002      2003     Total   Percent
-------------------  --------  --------  --------  --------  --------  --------  --------
Capital grant            $621      $571      $521      $521      $521    $2,755       100
 appropriation

Glidepath approach
-----------------------------------------------------------------------------------------
Operating expenses        292       242       192       142       142     1,010        37
Capital expenses          329       329       329       379       379     1,745        63

FTA capital maintenance approach
-----------------------------------------------------------------------------------------
Capital maintenance       511       427       282       285       290     1,795        65
Other capital             110       144       239       236       231       960        35
 expenses
-----------------------------------------------------------------------------------------
Note:  Amtrak's original glidepath would eliminate federal operating
subsidies by 2002, except that the federal government would continue
its payments to the Railroad Retirement Account.  Amtrak's federal
grant request for fiscal year 1999 revised the glidepath to include
an additional $84 million in fiscal year 1999 to make up for federal
operating support that was below the glidepath in prior years. 


*** End of document. ***