Amtrak CEO Stephen Gardner testified to the House Transportation and Infrastructure Committee on June 12 that the national rail company has yet to turn a profit in a 12-month period but hopes to break even by 2030.
Mr. Gardner’s comments came from a question posed by Rep. David Rouzer (R-N.C.) during a hearing on Amtrak’s funding, current operations, and uncertain future.
The CEO also discussed how Amtrak is making a comeback from a downturn during the COVID-19 pandemic and gave projections for future profitability based on May being the “best revenue month ever” in the company’s history.
Amtrak is owned by the federal government and governed by a board of directors appointed by the executive branch and confirmed by the U.S. Senate. It is a quasi-public corporation in that it receives a combination of state and federal subsidies while it is managed as a for-profit company.
During opening statements, Mr. Gardner said that so far in fiscal year 2024, Amtrak’s ridership is up by more than 20 percent and that revenue is up by more than 10 percent from 2023 figures.
“We’re on track to set a new record [for] ridership this year and will further reduce our operating losses,” the CEO said.
“We’ve expanded service with our state partners, and on the Northeast Corridor, we’ve added frequencies to meet demand.”
Mr. Gardner touted Amtrak’s new fleet of long-distance trains and the company’s “dramatic transformation” in recent years.
“We are not the company we were a few years ago. We have rebuilt and expanded our workforce with some of the best in the business,” including enhancing safety and security, he said.
The CEO argued that, as the country’s population grows, “passenger rail can and must play a bigger role.”
Mr. Rouzer asked him if “Amtrak has ever turned a profit in a year.”
“No, sir,” Mr. Gardner replied.
The representative then asked whether Mr. Gardner had a timeline for when the CEO thinks Amtrak can “get to a point where we can turn a profit.”
Mr. Gardner said it hinges on a “balance of both financial performance and efficiency.” He explained that Amtrak was “essentially about to be at break-even” before the COVID-19 pandemic.
“We lost all our business. We’re working to get back there,” he said.
The CEO noted that Amtrak’s goal is to break even by 2030. “And we’re working hard to achieve that,” he said.
Revenue is back to pre-pandemic levels, but Amtrak’s cost structure is about “30 to 40 percent higher depending on the area,” Mr. Gardner said. The company hopes to keep reducing losses each year while driving “value and service to the American people.”
Rep. Seth Moulton (D-Mass.) took issue with the question, suggesting that talks of Amtrak’s profitability are unique compared with other publicly funded transportation networks.
“Why, when we have hearings on highways, do we not open the hearings by saying why are our interstate highways not profitable?” the congressman asked.
Mr. Moulton explained that highways cost U.S. taxpayers billions of dollars per year to maintain, along with the billions needed to clean up car accidents. More than 40,000 Americans died on highways in 2023 alone.
He argued that despite the massive costs of maintaining the public highway system, his colleagues “don’t have a problem with the fact that the interstate highway system doesn’t make a profit” before extending the analogy to the airline industry as well.
“They barely squeeze a profit as it is,” Mr. Moulton said.
He said taxpayers have bailed out airlines “multiple times in the last 20 years” without questions about how they could be profitable without subsidies.
“So there’s a huge double standard here,” the congressman said.
