“During the past few months, we have witnessed almost unimaginable change to our world — and also to our business,” Flynn said. “This reduction is necessary to ensure we have a sustainable Amtrak that can continue to make critical investments in our core and long-term growth strategies, while also keeping safety as our top priority.”
On Monday, Amtrak requested nearly $1.5 billion in supplemental funding from the federal government to maintain “minimum service levels,” anticipating ridership will not recover to pre-pandemic levels in fiscal 2021.
In a letter to Congress, Flynn said that the economic fallout from the pandemic has become “clearer” and that the company needs a larger subsidy to offset revenue losses, prevent interruptions to capital investments and support Amtrak’s state-funded routes.
Amtrak has reduced or suspended service on many of the routes across its network, implemented pay reductions and voluntary furloughs, and suspended the 401(k) match for employees through the end of the year. The company’s next steps, Amtrak said to Congress, include cutting $350 million through workforce adjustments.
“For a period of time we’ll be operating a smaller network, and we will be a different-size company as we come out of this crisis,” Flynn said in an interview Wednesday.
Amtrak will continue to offer reduced service into 2021 both in the Northeast Corridor and its national network, Flynn said. That means fewer and shorter trains and overall reduced frequencies to meet the lower demand from travelers.
The frequency of long-distance trains, for example, will be reduced from a daily round trip to maybe five days a week or less depending on the demand, Flynn said.
William DeCarlo, vice president and legislative director for the Transportation Communication Union, which represents 7,500 Amtrak workers, said the company failed to ask for more federal aid sooner to avert impacts on jobs. He said union leaders fear Amtrak may “seek to retain management positions, cut union-represented jobs, and likely outsource our members’ work on the back end when the pandemic abates.”
Amtrak has in recent years outsourced some jobs and reduced staff levels, including in its police department. A coalition of railroad unions are lobbying Congress to provide Amtrak with funding tied to the retention of workers and their benefits.
“This is the same workforce who are proving to be the real heroes of this COVID-19 pandemic — hundreds of whom have tested positive for the virus,” DeCarlo said in a statement. “Amtrak is thanking them for their service by furloughing them, and dropping their health insurance when they need it most.”
More than 150 Amtrak workers had tested positive for covid-19 by mid-April, according to Amtrak. The number is expected to be higher now.
Amtrak was likely to have another record-setting year in number of riders and routes before the coronavirus crisis hit in early March, derailing projections that 2020 would yield positive earnings for the first time in the company’s 50-year history. Ridership began to plummet in early March, dropping 95 percent systemwide.
Amtrak had a record 32.5 million passengers in 2019, and it is projecting it may take years to return to those pre-coronavirus levels, saying substantial growth will “have to be achieved against a backdrop of stunning unemployment, socioeconomic dislocation and a potential recession.” The company estimates ridership in the next fiscal year may reach 16 million, or roughly 50 percent of the pre-pandemic levels.
“We will get through this crisis, we will recover, and we will come back stronger than ever before. But there is no getting around this fact: We have tough times ahead of us,” Flynn told the staff.