Deteriorated Financial and Operating Conditions

T-RCED-95-90: Published: Jan 26, 1995. Publicly Released: Jan 26, 1995.

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GAO discussed Amtrak's operations and finances and its strategic business plan. GAO noted that: (1) Amtrak's financial condition has declined steadily since 1990, to the point that its ability to continue national service is seriously threatened; (2) it is unlikely that Amtrak can overcome its problems in financing, capital investments, and service quality while continuing to operate its current nationwide system without significant increases in passenger revenues or funding; (3) Amtrak suffers from intense fare competition from airlines; (4) Amtrak faces substantial costs for equipment and facility maintenance, labor negotiations, and access to freight railroads; (5) none of Amtrak's routes is profitable when capital costs are taken into account; (6) Amtrak's new strategic business plan is an aggressive first step toward closing the gap between the expected operating deficit and federal grants, but long-term solutions depend on even more substantial changes; and (7) Congress needs to consider the nation's expectations for intercity rail passenger service and the scope of Amtrak's mission to provide that service when it decides the appropriate roles of the federal government in funding Amtrak's operating losses and capital investments.

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