Amtrak: Looking to Curb Food, Beverage Losses Over Next Five Years

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Throughout the course of its four-plus decade history, Amtrak has drawn the scorn of detractors who saw the federally-subsidized passenger railroad is a drain on taxpayers.

Now, millions of dollars in losses on the railroad’s food and beverage service have given more ammunition to opponents.

For its part, Amtrak said it plans to eliminate losses on food and beverage service over the next five years. Whether that will silence critics in Congress who next year will have the opportunity to fund — or not fund — Amtrak remains to be seen.

“Amtrak has been working to implement a strategic plan that will improve our focus on the bottom line, the elimination of the food and beverage loss is consistent with this strategy,” Amtrak Chief of Customer Service Thomas Hall, told Congress last month. “To ensure the proper management focus, we have this past summer consolidated responsibility for operations and accountability for financial performance into a single department. The current loss is heavily concentrated in the dining car services of our long distance trains, and we have identified several strategies that will help us to improve the financial performance of our food and beverage service.”

The passenger railroad lost $72 million in Fiscal Year 2012, according to a recent report from the inspector general (IG). Nearly the entire loss — $71.5 million — was on the railroad’s long-distance routes. The railroad did see an $800,000 profit on the Northeast Corridor.

The Auto Train was the biggest loser, hemorrhaging more than $13 million during the year, according to the inspector general’s report.

The railroad’s food and beverage losses have totaled more than $1 billion over the last 12 years, according to U.S. Rep. John Mica,
R-Fla.

“Amtrak has never broken even on food and beverage service, and I intend to investigate these outrageous expenditures within our Government Operations Subcommittee,” Mica said last month. “Amtrak must be held accountable to the taxpayer and Congress. I will continue to fight to improve the cost-effectiveness of Amtrak’s money losing routes and stop these extreme losses.”

The story is hardly a new one for Amtrak.

In 2005, for example, the IG found Amtrak’s food and beverage operations lose up to $150 million each year. A review also found that for every dollar Amtrak brings in for food and beverage revenue, it spends about two dollars.