Monday, February 09, 2015


Amtrak's problem is that makes an operating profit on the NE corridor and loses money everywhere else. The recent obsession with the fact that it loses money on food services on its long distance routes is silly. It's a bundled good. Charge people for a seat or a sleeper on a long distance train and they want to have access to reasonably priced food, too. We aren't always perfectly rational in these decisions, but it probably makes sense for Amtrak to keep ticket prices a bit higher while "subsidizing" the food on these trains. People can have a more honest fight about whether to keep these routes, but the food issue is silly.

Last year, the NEC profit was nearly $400 million, Amtrak said, while the operating deficit of the long-distance routes was about $600 million.

The bill proposes to eliminate Amtrak's losses in its food and beverage services within five years, as Amtrak has promised to do.

In recent years, Amtrak has been losing about $80 million a year on food and beverage services, 99 percent of that on its long-distance routes. Cafe cars on the NEC break even or make a small profit, Amtrak says.