Amtrak 2011 Update

Stephen Gardner, Vice President, Policy and Development

AASHTO Meeting, March 4, 2011

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Amtrak 101 – basic company and system statistics

• Congressionally chartered corporation

• Amtrak mission: “provide efficient and effective intercity passenger rail mobility consisting of high quality service that is trip-time competitive with other intercity travel options”

• System basics:

– 21,100 mile system, 20,000 employees

– 308 daily intercity trains, 528 stations

• Record Ridership: – 28.7 million riders in FY 10

– 4 of last 5 years have been records

– 37% growth since 2000

• Record revenue of $2.5 billion in FY 10

– Covered 85% of operating cost

– Our FY 10 farebox recovery was 76% - highest recovery in US

• Federal funding for Amtrak was $1.5 billion in FY 2010:– Roughly $1 billion for capital, debt, ADA

– $563 million for operating support

3

The Amtrak system

Cascades

Californiacorridors

Chicago Hub

NortheastCorridor

(NEC)

Long distance routesconnect major hubsand corridor services

4

Business lines – what we do, and why we do it

• NEC - high-yield, short distance travelers

– Financial Engine

– Business Travelers- Acela 80%+- Northeast Regional 35%+

• Long Distance - high-value sleeper travelers, shorter haul coach markets

– Network Connectivity

– Foundation for Future Growth

– Underserved Areas, Federal Operating Subsidy

• State Corridors - high-volume, low-yield short distance travelers

– Feeders to Other Services

– State Supported

• Commuters – revenue opportunities, economies of scale

– For profit, contractual basis

– Expand system connectivity

• Commercial Development – maximize revenue opportunities inherent in the property

– Includes stations, advertising opportunities, utilities, etc.

Avg. Ticket Revenue / Rider

Amtrak Total $60NEC Spine $86

Acela $136NER $64

State Corridors $28Long Distance $99

Sleeper $240Coach $74

Ridership (millions)

  FY 10 FY 09 chg

Amtrak Total 28.7 27.1 5%

NEC Spine 10.3 9.9 4%

Acela 3.2 3 6%

NER 7.1 6.9 3%

Short Distance 13.8 13 6%

Long Distance 4.4 4.2 6%

Ticket Revenues (millions)

  FY 10 FY 09 chg

Amtrak Total $1,742 $1,599 9%

NCE Spine $899 $841 7%

Acela $440 $409 7%

NER $458 $431 6%

Short Distance $390 $346 12%

Long Distance $453 $411 10%

Federal Gov’t

States

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State PartnersCom

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unicipaties,

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Ticket Revenue by Business Line

Long Distance, $446m,

26%

Acela, $435m,

25%

Northeast Regional, $458m,

26%

State Corridors, $390m,

23%

Ticket Revenue by Business Line

Long Distance, $446m,

26%

Acela, $435m,

25%

Northeast Regional, $458m,

26%

State Corridors, $390m,

23%

FY10 Revenue and Ridership Breakdown

• NEC makes up over half of Amtrak revenue and requires most of Amtrak capital funding

• State Corridors make up nearly half of Amtrak ridership

• Long Distance trains require bulk of Federal operating subsidy

NEC

Ridership by Business Line

Northeast Regional,

7.2m, 25%

Acela, 3.2m, 11%

State Corridors,

13.8m, 48%

Long Distance,

4.5m, 16%

Ridership by Business Line

Northeast Regional,

7.2m, 25%

Acela, 3.2m, 11%

State Corridors,

13.8m, 48%

Long Distance,

4.5m, 16%

NEC

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The near-term funding situation

• Amtrak and HSIPR grants:

– FY 11: - House-passed CR cut Amtrak to $1.413B – slightly more than FY 08 – and eliminates HSIPR funding

- Sessions amendment to further cut to $966 million defeated on bipartisan vote

– FY 12:- Amtrak requested $2.2B – right around the authorized funding level- Detailed discussion on this budget won’t start for some time – but will be protracted.

- Lower baselines make increases harder

• Surface Transportation Reauthorization:- Administration proposes merging Amtrak/HSIPR into new consolidated rail program:- $4 billion for System Preservation (initially Amtrak)- $4 billion for Network Development (competitive)

- Hinges on ability to raise revenues

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FY10 Intercity Travel Market

• US travel market has been shrinking due to recession and high unemployment:

– Amtrak is growing

– US Outlook- Leisure travel - modest growth (~50% of Amtrak ridership)

- Business Travel – flat (~46% of Amtrak ridership)

• Amtrak market share strongest in high frequency markets, mainly in NEC and West

• Near-term growth through increasing rail market share:

– Southeast corridors

– California corridors

– Chicago – Midwest

----------------------Market Shares----------------------------National-------- ---Northeast Corridor---2009 2011 2009 2011

% % % %

Amtrak 1.7 2.0 16.0 22.0Car 67.0 69.0 69.0 58.0Air 29.0 27.0 9.0 12.0Bus 2.0 2.0 6.0 7.0

----------------------Market Shares----------------------------National-------- ---Northeast Corridor---2009 2011 2009 2011

% % % %

Amtrak 1.7 2.0 16.0 22.0Car 67.0 69.0 69.0 58.0Air 29.0 27.0 9.0 12.0Bus 2.0 2.0 6.0 7.0

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NEC Spine On-Time Performance

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

100.0%

FY 06 FY 07 FY 08 FY 09 FY 10

NEC Spine On-Time Performance

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

100.0%

FY 06 FY 07 FY 08 FY 09 FY 10

Key Ridership Drivers – Fast, Frequent, Reliable, and Comfortable

• “Hard” service improvements

– On-time performance

– Faster trip times

– Frequency of service (departures)

– Information and access

• “Soft” service improvements

– On-board amenities/service

– Station and equipment design features/elements consistent with customer expectations

– Comfort, convenience

– Personal space

– Productivity support, business amenities (especially Acela)

NEC Spine Customer Satisfaction Index

64%

66%

68%

70%

72%

74%

76%

78%

80%

FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10

NEC Spine Customer Satisfaction Index

64%

66%

68%

70%

72%

74%

76%

78%

80%

FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10

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• Amtrak is now the dominant provider in the NEC

– Frequency, competitive trip times, OTP drive share shift

• Acela product quality also critical to increased share

– Wi-Fi, Leather seats, quality of customer experience

– Improved Food and Beverage service

– En route cleaning, customer service focus

Fast/Frequent Service Induces Modal Shift – NEC

FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10

DC-NY 36% 37% 45% 56% 50% 50% 51% 55% 56% 63% 61% 69%

NY-Boston 18% 20% 27% 41% 35% 39% 38% 36% 41% 49% 50% 53%

Daily Round Trips

New York - Washington 36New York - Philadelphia 46New York - Boston 19

0%

10%

20%

30%

40%

50%

60%

70%

80%

Trends in Amtrak Share of Air-Rail Market

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Why do we need passenger rail?

• Competing modes are congested, and getting worse:

– Number of urban areas with more than 20 hours of annual rush hour traffic delay increased sevenfold between 1982 and 2007

– Between 2000 and 2008, number of flight delays due to airport terminal volume increased by 42%

• Rail’s niche is the sub-500 mile intercity market:

– More than 79% of total trips USDOT classifies as ‘long distance’ (50+ miles) fall into this category

– Number of Americans living in urban areas expected to double (150M to 300M) by 2050

100 100 100 98 97 8870 66 61 50

170%

10%20%30%40%50%60%70%80%90%

100%

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Top ten corridors – Air-rail share, FY 09

Where we can offer reliable andtrip-time competitive service,Amtrak thrives – and demonstrates the latent and growing demand for intercity passenger service

Where we can offer reliable andtrip-time competitive service,Amtrak thrives – and demonstrates the latent and growing demand for intercity passenger service

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The rail network must evolve to address these needs

• Rail – including HSR – needs to be part of the solution

• Rail solutions must:

– Match speed and operating characteristics to market demand - Auto? Air? Both?

– have connectivity – other modes must feed nodes

– Tailor investment to address the mobility challenges, particularly in places like:- California- Northeast- Florida- Chicago area

HSRExpress

(150+ mph)

HSRRegional

(110-150+ mph)

Emerging HSR(90-110 mph)

ConventionalRail

(up to 90mph)

CommuterRail

Light/Heavy Rail

Auto and Bus Peds andother transit

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State Partnerships…

• States are vital partners for Amtrak and together, we form a cooperative system

• States provide:- Service initiatives and planning - operating funds - $191 million annually, or 23% of total costs. With revenues and state payments, 76% of fully allocated costs

- Capital investments (stations, equipment, etc)- Intermodal integration- Service focus and innovation

• Amtrak provides:- ~25% of fully-allocated costs of all corridor services- Railroad access- Liability arrangement - Major systems (reservations, etc)- Equipment & facilities- Service planning

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• trains less than 750 miles, most in partnership with 15 states

• Are only service at 203 of Amtrak’s 528-served stations

• 220 daily trains – more than half our total!

• We are dedicated to working with states to:• Improve current services• Develop plans for the future• Pursue joint processes (Sec. 209 & 305)• Support and pursue investment opportunities (HSIPR)

• 2011 Partner Satisfaction Program:• Annual survey of partner satisfaction• Integrated local teams to focus on partner top priority issue• Responsiveness and empowerment

….. are Amtrak’s future

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Corridor trains are the key to system growth

Top Ten Performers – Ridership Growth

Piedmont +46%

Blue Water +18.7%

Vermonter +16.5%

Missouri River Runner +14.4%

Alb-N Falls-Toronto +13.8%

Adirondack +13.4%

Chicago-St. Louis +13.1%

Cascades +13.0%

Heartland Flyer +11.1%

Carolinian +11%

Top Ten Performers – Ridership Growth

Piedmont +46%

Blue Water +18.7%

Vermonter +16.5%

Missouri River Runner +14.4%

Alb-N Falls-Toronto +13.8%

Adirondack +13.4%

Chicago-St. Louis +13.1%

Cascades +13.0%

Heartland Flyer +11.1%

Carolinian +11%

Top Ten Performers – Revenue Growth

Piedmont +39.1%

Cascades +31.6%

Missouri River Runner +24.4%

Vermonter +19.1%

Carolinian +17.9%

Chicago-St. Louis +17.6%

Hoosier State +17.5%

Blue Water +15.3%

Adirondack +14.0%

Heartland Flyer +13.5%

Top Ten Performers – Revenue Growth

Piedmont +39.1%

Cascades +31.6%

Missouri River Runner +24.4%

Vermonter +19.1%

Carolinian +17.9%

Chicago-St. Louis +17.6%

Hoosier State +17.5%

Blue Water +15.3%

Adirondack +14.0%

Heartland Flyer +13.5%

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Partnerships with Host Railroads

• Most Amtrak train-miles (70+%) run on freight railroads– We have longstanding relationships with all Class I carriers

– Work with them on grant agreements, as well as daily service issues

• All Amtrak trains on host railroads rely on Rail Passenger Service Act access authority to any US railroad:

– Amtrak gets access in exchange for host railroads not having to offer passenger service

– Basis for entry is contractual – but a host railroad cannot simply refuse to permit:

- new or additional trains- Higher speeds

– Can’t insist unilaterally on dedicated tracks as long as Amtrak and states willing to make improvements needed for safe and practicable service

• Access is at incremental cost not market rates

• Passenger trains receive preference over freight

• Hosts increasingly seeking to modify arrangement based on concern over freight growth and capacity.

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Amtrak and High Speed Rail

• Establishing new Amtrak HSR Department

– Green field projects – participate in design and operation of new HSR corridors

– Lead Next-Gen HSR development on the Northeast Corridor- Major reductions in trip time and significant increases in frequency- Increases in speed up to 220mph, using dedicated trackage and some new alignments

• We have the experience needed for HSR

– 150 MPH service, largest electrified operation, maintenance, panning and engineering experience

• Working with partners

– Amtrak’s principal interest is operational

– NEC Next-Gen HSR: International peer review underway

– FLHSR: partnered with SNCF and Bechtel

– Interconnectivity: integrate new and existing services, especially during development

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Fleet Needs

• Age, utilization, and

• Fleet age, utilization, mileage, and demand are all issues

– Hardest-run fleet in America

– Average age at an all-time high

– No capacity to accommodate growing ridership

• More than 2,000 pieces of rolling stock

• Issued fleet plan in 2010, update out in March

• First tranche of orders last year:

– 70 electric locomotive

– 130 single-level long distance cars

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Working with the 305 Equipment Pool Committee

• Incorporating 305 Activities into Amtrak Fleet Strategy

– Will utilize 305 Specifications

– Helps achieve:

- Standardization

- Opportunities for state corridor(s) joint acquisitions/partnerships

- Economies of Scale

- Orders of sufficient size to help rebuild the domestic equipment industry

- Create pool of equipment that can be flexibly deployed as necessary

• Implementation framework will be of great importance

– Acquisition and management structure

– Financing

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Questions??

Thank you!