- Amtrak ridership is down as much as 92% amid the spread of the coronavirus, The Wall Street Journal's Ted Mann reported.
- The already federally subsidized railroad is now asking Congress for $1 billion to shore up its balance sheet in the face of lost revenue.
- It's a seismic shift for Amtrak, which just months ago was on track to break even financially for the first time in its five-decade history.
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Amtrak ridership as cratered as the spread of the coronavirus forces Americans to stay home and rethink travel in ways that could upset the railroad's plan to turn a profit for the first time this year
Overall ridership fell 92% last week, while a 99% dropoff in Acela bookings forced the railroad to outright cancel the higher speed Northeast Corridor service this week. CEO Richard Anderson broke the news to staff in a conference call Friday, according to a recording obtained by The Wall Street Journal.
Amtrak did not immediately respond to a request for comment from Business Insider.
"It's as dramatic a falloff as you'd see in any business," Anderson said on the call, The Journal reported. "So we are working very hard to make up $1 billion in cash right now."
Last week, an industry group called on Congress to include Amtrak in any economic stimulus measures it passed to ward off the downturn catalyzed by the coronavirus. Like airlines, softening demand has forced Amtrak to drastically cut service on some of its most lucrative routes.
Details were still being finalized for a bailout package on Monday, but a Senate bill, which initially failed a procedural vote contains $1.018 billion for Amtrak, to make up for lost revenue. A similar law being drafted Monday in the House may contain similar provisions.
"This will help Amtrak sustain Northeast Corridor (NEC) and National Network (NN) service, and withstand reduced payments from states for state-supported services,"the Rail Passengers Association said in its letter to congress.
While the House bill makes its way through Capitol Hill bargaining, Amtrak executives have taken pay cuts of more than 20%, The Wall Street Journal reported, while other workers were asked to take unpaid leave. Involuntary layoffs, the paper reported, are not out of the question.
The headache couldn't come at a worse time for Amtrak.
Amtrak's new reality is a near about-face from its prospects at the start of the year. With a new chief executive set to take over in April after a record-setting year, Amtrak was on track to break even on an operating basis thanks to intense cost cutting under Anderson. Other means of shoring up the federally-subsidized balance sheet, like airline-style change fees for reservations, have proven less popular.
"We must conserve our resources, putting them to use as efficiently as possible and in ways that continue to drive safety and advance our future, so that when things get back to normal, we are ready to grow and prosper," Stephen Gardner, senior executive vice president and chief operating and commercial officer, wrote in a memo last week.
Full details on Amtrak's service cuts can be found here.
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