National
Railroad Passenger Corporation 60 Massachusetts Avenue, N.E.,
Fourth Floor Washington, D.C. 20002-4285 www.amtrak.com
FOR IMMEDIATE RELEASE
Contact: John
Wolf (202) 906-3860 ATK-00-19 February 28,
2000
AMTRAK UNVEILS MARKET-DRIVEN ROUTE STRATEGY
Expands Current Network In 21 States; Doubles Number of
Shipping Lanes for Mail and Express Business
WASHINGTON – Amtrak today announced
plans to expand passenger rail service in 21 states and strengthen
its competitive edge in the mail and express business, steps that
will generate $65 million in improvements to its bottom line
beginning in 2003. These actions, the first phase of Amtrak’s
Network Growth Strategy, are based on findings of its first
comprehensive economic analysis of the national rail system that is
designed to preserve and expand the existing rail
network.
Amtrak made the announcement today following a
meeting between President Bill Clinton and members of the Amtrak
Board of Directors at the White House. The President commended
Amtrak for the strategy and its recent business turnaround, and
reiterated his strong support for operational funding and the
development of high speed rail corridors.
"The Network Growth Strategy builds on Amtrak's
financial success over the last two years, but it is grounded in the
understanding that we can never grow complacent,"
said Gov. Tommy Thompson, Amtrak's
chairman of the board. "Amtrak must constantly search for new market
opportunities and keep on growing - just like any other business.
And like other businesses, we are using state-of-the-art commercial
tools and analysis to increase our market share and improve
efficiency."
Amtrak’s Network Growth Strategy is built on a
network of feeder routes that, much like the airlines, are connected
at major hubs, such as Chicago and Dallas/Fort Worth. This network
will offer passengers not only more attractive travel options, but
also will provide Amtrak's mail and express customers twice as many
shipping lanes than currently exist today in partnership with the
freight railroads. (Express is the shipment of time-sensitive goods
on Amtrak trains, a market that is currently served by trucks.)
Finally, the interconnected network also allows for more efficient
use of the railroad's fleet, enabling Amtrak to improve the
financial performance of routes and expand service at the same
time.
"The Network Growth Strategy will result in a
larger, better connected system of trains that provides greater
choices for travelers and shippers of time-sensitive express," said
George Warrington, Amtrak’s president and chief executive officer.
"As a result, Amtrak will be more competitive on both the passenger
side and in the mail and express market."
Pending agreements with the freight railroads,
commuter authorities and other partners, ridership on the routes
covered in the phase one analysis will increase by 7 percent; 11
routes will be expanded to serve additional markets; and, the number
of trains operating weekly will be increased on three routes. Amtrak
will activate 50 passenger cars and 45 locomotives, as well as 4,000
mail and express cars as part of the initial phase.
These phase one changes will be implemented using
Amtrak’s existing capital resources. Over the next several months,
Amtrak will work with states across the country on phase two of the
analysis, identifying additional capital requirements for future
high-speed rail corridors. Like other modes of transportation,
Amtrak will continue to need a reliable source of capital funding in
the future.
"Amtrak's new approach recognizes that a national
passenger railroad system is a valuable asset in and of itself,"
said Mayor John Robert Smith, Amtrak board
member. "We cannot become a stronger part of our country's
infrastructure by cutting routes one-by-one. On the contrary, we can
only improve our bottom-line by aggressively identifying new market
opportunities and acting boldly to increase our market
share."
During its extensive analysis, Amtrak considered
hundreds of route scenarios, including the elimination of select
underperforming routes. However, the analysis revealed that the loss
of revenue from a single poor performing route combined with the
loss of connecting revenue, derived from both passengers and mail
and express, exceeded the marginal cost savings. The financial
strength of the railroad is its interconnected system that serves as
a strong base to build revenue.
With the announcement of the Network Growth
Strategy, Amtrak is fulfilling another critical component of its
business plan initiatives. Other elements underway include the
development of one of the travel industry's first service guarantee
programs, the expansion of the mail and express business and the
development of commercial partnership opportunities with industry
leaders. Taken together these initiatives will enable Amtrak to
become operationally self-sufficient by 2003, as mandated by
Congress. For the past two fiscal years and through the first
quarter of this fiscal year, Amtrak has surpassed its business plan
targets, and is on course to achieve that goal.
Amtrak operates a 22,000-mile intercity passenger
rail system, serving more than 500 communities in 45 states. Under
Amtrak's new leadership, the corporation is turning the corner to
become a successful business enterprise. As part of its turnaround,
Amtrak is focusing on growing public and private business
partnerships, improving and guaranteeing consistency and quality of
service, introducing high-speed rail in the Northeast, and
developing other high-speed rail corridors nationwide. For more
information about Amtrak, including schedules, fares and
reservations visit Amtrak's Web site at www.amtrak.com.
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