Amtrak’s second fire sale in a year

Photo courtesy The Boston Globe.

In follow-up to my previously published article in Railway Age (“Does the Emperor Wear No Clothes?” June 23, 2017) critically analyzing why would Amtrak put sleeper compartments on sale without any black-out dates during the last part of summer and Thanksgiving, “There ya go again, Mr. Anderson!”

So, now in its desperation, Amtrak has once again reverted to an advertising campaign that proves how devoid Amtrak is of competent marketing. As I can only surmise Anderson is throwing us a large piece of coal for this Christmas in his scheme to defund the long-distance routes, one can only ask, did Delta ever put on sale its first-class seats, particularly during an extended period that included the seasonal bump at the tail end of the winter holidays, and throughout the spring holidays?

Frankly, in response to what I perceived as an Amtrak “flack” piece pushed to the media, and picked up by the Fort Worth Star-Telegram on Dec. 4 (Wanna Take An Amtrak Train Across the Country in Style? Now is a Good Time to Book), my response—after a sense of bewilderment why Amtrak cannot focus its limited talents beyond spreading manure with the acknowledgment of its obligatory political sponsors—was to question why what is left of the legacy media cannot decipher and interpret how Amtrak is maligning the truth?

As the great Yogi Berra reminds us, this is “deja vu all over again,” as it is the second fire sale on sleeping accommodations by Amtrak in less than one year. Interesting how each sale runs through heavier travel seasons; not just geared to cover the lighter shoulder periods. This attempt to re-engineer rail travel clearly evidences a desperate response by Amtrak to a serious deterioration in revenues, in relationship to a drop in traffic.

Certainly to note in this advertisement is how Amtrak no longer promotes the experience in the dining car, let alone the concept of crafted beverages in the lounge car. Another example how Amtrak is out of touch with its customers is how Amtrak exclusively pushes Pepsi products when the market is clearly with Coke, 17.8% to 8.4%.

Ironically, Amtrak continues to ignore advising passengers in its advertising that the Silver Star lost its diner and operates with but a cafe car offering a selection far less than the neighborhood 7-11; how the Capitol Limited and Lake Shore Limited lost their diners and begrudgingly only provide cold box meals. (all that’s missing is the cold, isolated tundra through the window en route to the Gulag.)

With such a downward-spiraling track record, a knowledgeable passenger can only question, “What’s next?” and worry what the response will be. Clearly, this desperate advertising to offer roomettes on a fire sale is a result of Amtrak shooting itself in the foot by loudly attempting to derail long-distance trains over the past year.

Such efforts ordained by an unsavory board of directors lacking even the rudimentary experiences to properly provide oversight and stewardship are factually documented to include:

1) Reducing consists to turn away passengers. Note how Amtrak does not accumulate data to evidence how many potential passengers are unable to book travel; to use such data in a proforma to Congress to fund additional equipment to capture the lost revenues. Indeed, how does this correlate to what extent Anderson has set a course to intentionally dilute revenue in peak periods to further show no meaningful revenue potential on long-distance trains?

2) Downgrading dining and reducing service staff in diners to slow-turning tables, to prevent serving coach customers.

3) Starting with the Southwest Chief, seeking to disrupt the continuous trip by substituting buses. Obviously, on top of the irregular cost allocation penalizing the long distance trains to protect the NEC, the only effect would be on such routes to chase away revenue passengers and kill the route.

4) Trashing long-distance trains in the media; deliberately stabbing these trains before Congress, as if the public is no different than passengers of the 1960s who ran away from the Southern Pacific’s determined effort to shoo away any and all interested passengers, including die-hard rail enthusiasts.

5) Whatever happened to a staffed lounge car, let alone a properly trained bartender equipped to craft cocktails? Obviously, this is another attempt by Amtrak to deflate any revenue potential; to torpedo passenger expectations (unlike the Santa Fe right up to May 1, 1971)

6) Unable to work with the freight railroads who own the track to ensure timely dispatching per schedule. How many Amtrak board members and management officers actually worked in private business, let alone Wall Street, to appreciate how nothing is a “bet on the come” or given away free? Had they learned from such experience and respected how private business works, they would not act so insidiously, expecting the Class I’s to roll over and continue at their cost to convey Amtrak. Instead, there would be meaningful negotiations that would identify and respect the costs for providing track access and dispatching Amtrak.  Interestingly, as the Class I’s convert to Precision Scheduled Railroading, with elongated freights and no sidings to hold them. This can only mean the passenger schedules will be further stabbed.

The bottom line takeaway starts with how obviously Amtrak lacks competent marketing, as no viable business trashes its own product without reaping the public’s negative response. Also, what doesn’t help Amtrak is how it has lost its most experienced management from buyouts and layoffs, thus paralyzing the operation, as it pays top-dollar salaries to new entrants to learn the business and the industry.

Clearly, we can interpret this desperate swan dive act by Amtrak in parallel to how New York Governor Andrew Cuomo is now maneuvering to vacate Amtrak from the Hudson River tunnel project (and eventually the Gateway Project). In parallel, hanging out there is the expressed concern by Frank Wilner of Railway Age that Amtrak may not achieve the hurdle necessary to secure funding. Of course, we also have the inside joke how New York Democratic Senator Schumer (the incoming Majority Leader) is scheming with Amtrak Board Chair Anthony Coscia to divert federal funding from the National Network to shore-up the deficit-ridden Northeast Corridor (NEC) may actually be shooting himself in the foot and “tanking” the NEC.

As we know, so much of the NEC infrastructure and corporate costs are inappropriately dumped onto the long-distance and state-supported trains due to Amtrak’s highly irregular ignoring of GAAP (Generally Accepted Accounting Principles). Therefore, if Schumer/Coscia succeed in killing off the long-distance trains, what happens to Amtrak’s full-cost-allocation methodology? All those costs would further burden the state-supported corridors and take them down, and possibly even default to the NEC—thus, causing me to encourage stock investments in Bolt and Peter Pan.

For far too long, Amtrak has spun its own interpretation of how to fulfill its mission to serve the National Network. Now, that jilted business perspective is to continue to narrow Amtrak’s business opportunities, as it doggedly persists in pushing itself into a very narrow corner.

Frankly, I am enthralled, as Amtrak negates itself and destroys any sense of viability, thus, ideally to encourage California’s three successful Joint Powers Authorities (JPAs) to elect to take the next step and lease their own equipment (new, not at fully depreciated costs) and to negotiate directly with the Class I’s on realistic costs for track access and dispatching.

And coming up on Amtrak’s red block signals will be Virgin Trains USA to open up the paralyzed passenger train market, serving ignored or underserved markets, and, importantly, to offer a competent vision to compete head-on with Amtrak in current corridors—and eventually competing with Amtrak on the NEC.

M.E. Singer is an observer and commentator on the passenger rail industry, identifying shortfalls and growth opportunities. He is currently Principal at Marketing Rail Ltd. in Chicago, a consultancy to achieve passenger rail customer experience and product branding. Singer has prior corporate experience in turnaround operations management, marketing, and mergers and acquisitions in the healthcare field.

Editor’s Note: According to industry observer and frequent (at least until recently) Amtrak passenger Marcus S. Kostolich, “This is an Amtrak response to my question as to why I should spend hundreds of dollars for a roomette or bedroom on a train from New York City or Washington to Chicago, where the food included in my ticket is a cold boxed meal instead of hot food served in a dining car. Notice how this is not even addressed. My e-mail question to them was sent more than three weeks ago: Thank you for contacting us regarding our changes to the meals on our long distance trains. We apologize that it has taken longer than expected for us to answer your inquiry. We are experiencing an unusually high volume of email requests. Thank you for your patience. We appreciate your comments regarding our service. Your feedback is valuable to us and has been forwarded to the appropriate department to address your concerns. Thank you for taking the time to write to us. Sincerely, Linda, Amtrak Customer Service.”

Unhappy Meals + unhappy customers + indifferent customer service = no repeat business. But maybe that’s what Richard Anderson wants? — William C. Vantuono