New Amtrak services like a high-speed express from Washington to New York and movies on long-distance overnights are combining to turn the little railroad that couldn't into the passenger rail service that just might.
With revenue that topped $1 billion in fiscal 1988, Amtrak would rest comfortably within the ranks of the Fortune 500 if it were a public company, and just below the majors if stacked against its rivals in the airline industry.Although the federally subsidized railroad still has its detractors in the Reagan administration and Congress, Amtrak's more aggressive marketing approach has helped boost passenger traffic to more than 21 million riders last year and reduced its financial dependence on the federal government to its lowest level ever.
"Amtrak does have a number of very dramatic success stories," said Ross Capon, executive director of the National Association of Railroad Passengers.
Still, Amtrak's success has come at some cost. While other measures of Amtrak's health were moving up, its on-time performance slipped 4 percentage points in fiscal 1988 as nearly a third of its trains rolled into the station behind schedule.
Such inconveniences don't appear to be dampening demand, particularly on Amtrak's hourly Metroliner service between Washington and New York. One important element of that service has been the addition of an express train designed to better compete with the Eastern Air Lines and Pan Am shuttles.
The Amtrak Express, which began operating about a year ago, leaves Union Station at 6:50 a.m., makes a stop at New Carrollton, and arrives at 9:30 a.m. at Pennsylvania Station in midtown Manhattan. The fare is $59 - it soon will rise to $65 - compared with $99 for a one-way shuttle trip.
Express riders have contributed to a 15 percent increase in overall Metroliner traffic in the past year. The number of early morning passengers traveling from Washington to New York was up 48 percent.
Amtrak also has benefited from the refurbishment of decaying train stations. Washington's newly renovated Union Station stands out as a dramatic example, but it isn't the only one. Significant improvements also have been made or are under way at stations in Pittsburgh, Boston, Dallas, Chicago and Kansas City.
Amtrak benefits two ways from station renovation: The railroad earns money as a participant in the real-estate development, and the attractiveness of Amtrak's service increases.
"I can't say enough about Union Station," said Timothy P. Gardner, vice president of passenger marketing for Amtrak. "Union Station was just a standing reproach to Amtrak. . . . Anyone who wanted to access our service had to walk past this building that said - `Here I am. Train service was once great, but now I'm dilapidated.' Now it says everything we want it to say about train travel: It was great - and is great. It unites the glamour of the past and the grace of the past with modern convenience."
Much of Amtrak's effort in the Northeast corridor and other areas has focused on building business traffic, but Amtrak also is courting vacation travelers with new amenities on long-distance trips. Some trains now offer movies, oversized windows for better views, tour guides who provide information on sights, and a happy hour and bingo in the lounge cars.
Amtrak soon will offer weekend service to Atlantic City and already provides train service during the summer from Washington and New York to Cape Cod. The railroad also is expanding some of its long-distance runs. This month, it began service between Dallas and Houston as an extension of its Chicago-to-Dallas run. This gives Chicago passengers another major destination in Texas and Houston travelers access by train to Dallas, Chicago and St. Louis.
Also this month, Amtrak extended a run from New York's Penn Station to Savannah and Jacksonville. "We get most of our revenue when we make an extension from a long-haul into a new market," Gardner said.
Part of Amtrak's ability to sell these new services can be attributed to its effort to reach travel agents, said Jerry Mitchell, a New England director of the American Society of Travel Agents. Traditionally, train tickets have been sold only at train stations, but with travel agents accounting for 80 percent of airline-ticket sales and playing an increasing role in travel planning, it was critical for Amtrak to crack that market.
Travel agents now write tickets for Amtrak, use computers to call up information on rail service and help the railroad market its package tours.
All this has helped increase the amount to which Amtrak covers its own costs to 69 percent, a record high. But the railroad's new fortunes may also prove to be its failing.
Amtrak supporters worry that a cost-conscious Congress may use the railroad's success as an excuse to cut funding. The Reagan administration has been trying since 1985 to end subsidies to the railroad, and a Bush administration is likely to follow suit.
The key to Amtrak's future may be selling Congress on the need to maintain funding to help it replenish operating equipment. The rail company bought a substantial amount of new equipment in the early 1980s, but now the system is stretched about as far as it can go, say officials familiar with its operations.
"It doesn't cost as much to run the railroad, but they haven't been buying as much capital equipment as they need to replenish the fleet," said Gregory R. Dahlberg, staff assistant to the House Appropriations transportation subcommittee. "It's not an immediate crisis, but it's something that's going to continue to grow and grow.