Given the uncertainty of supplemental funding for the fiscal year that begins Oct. 1, Flynn said the railroad has no option but to slash operations and its workforce next month.
“As difficult as these actions are, if we do not take such cost-saving measures and fail to receive supplemental funding, we anticipate burning nearly $250 million each month,” Flynn said. “At this rate of loss, we would be forced to take drastic measures, with long-lasting impacts on the company, on our employees and on our network.”
The two-hour hearing, before the House Transportation subcommittee on railroads, pipelines and hazardous materials, was on Amtrak’s response to the pandemic and came just days after the company announced it would be furloughing 2,050 workers at the end of the month. The railroad also announced substantial service cuts beginning Oct. 1.
Amtrak is decreasing service on most of its long-distance trains to three times a week from daily. The carrier also is reducing train frequencies in the Northeast Corridor, the busiest in its network, and on its state-funded routes.
Congress is weighing a request from the railroad for approximately $2.8 billion — double the nearly $1.5 billion in supplemental federal funding that Amtrak projected in May it would need to maintain service levels. The funding is in addition to the roughly $2 billion in federal subsidies it receives annually to cover operations.
Rep. Daniel Lipinski (D-Ill.), chair of the subcommittee, asked Flynn to commit to rescind the furloughs and service cuts if Congress decided to give the company the $4.9 billion it wants.
“We will do as directed by Congress,” Flynn answered. “If that $4.9 billion instructs us to rescind the furloughs and rescind the service cuts, we’ll do that.”
If Congress does not provide the supplemental funding, however, even more dramatic reductions across the company would be necessary to “stave off bankruptcy,” Flynn said.
In April the federal government released more than $1 billion in relief money to Amtrak to keep the railroad running and its front-line workers on the job during the pandemic. Amtrak said those funds helped it avoid furloughs and maintain operations in the fiscal year that ends Sept. 30.
But some committee members said Congress provided the Cares Act money with the understanding that part of the funds would be used to prevent furloughs for the duration of the pandemic. Some said the recent announcement that Amtrak will furlough 2,050 employees at the end of September “is extremely disappointing.”
Rep. Stephen F. Lynch (D-Mass.) said that by cutting the workforce Amtrak is going to lose the support of members of Congress and that the service cuts will only “continue to spiral that bottom-line deficit.”
“These 2,000 line workers are very important to us. They are the heart and soul of Amtrak,” Lynch said. “You are not keeping faith with the people who run those trains and maintain those trains every single day.”
Lipinski lamented that Amtrak did not request additional funding sooner.
“Amtrak has had months to come to Congress and request additional funding to help keep workers on the payroll,” he said. “The principal reason Amtrak didn’t get any money in the Heroes Act passed by the House was that Amtrak didn’t submit a supplemental request until 10 days after passage.”
Lipinski said he is urging Congress to act soon to prevent the furloughs and the cuts to long-distance service. It’s unclear if Congress will act quickly enough for Amtrak to reverse the changes that will take effect Oct. 1.
Amtrak’s ridership plummeted 97 percent in the weeks after the coronavirus hit the nation. Six months into the crisis, ridership and revenue are still down 80 percent compared to a year ago, according to the company.
At the hearing, two labor unions and the Rail Passengers Association also pleaded with lawmakers to avert the service and workforce cuts, saying they will hurt Amtrak in the long run.
Jim Mathews, president and chief executive of the Rail Passengers Association, which represents 28,000 members, said nine months of daily service cuts could cost the interior regions of the country that are served by Amtrak’s long-distance trains at least $2.3 billion. The figure could rise above $3 billion if the cuts remain in place for the full year, according to the group’s analysis of the economic impacts of Amtrak’s decision.
“The existence of Amtrak buoys the economies of hundreds of towns and cities all across America,” Mathews said. “Degrading that service means withdrawing those benefits from millions of Americans, even those who don’t necessarily ride the trains themselves, because in many cases lives and livelihoods depend on the routes’ operation.
“Amtrak is a taxpayer-supported public service,” Mathews said. “Its object is not profit, but to serve the nation. It cannot fulfill its mandate by cutting service for half the country during one of the most severe economic crises our nation has experienced and during a pandemic that has made air travel a perilous gamble for millions of Americans.”