When Will Amtrak Turn a Profit?

Published August 27, 2008

Since ridership is “booming” on Amtrak, one might expect the rail line to start making money … not requiring billions in taxpayer subsidies to stay afloat (August 27, “Rail advocates urge closer look at train travel”). It’s time to take Amtrak off its $1.2 billion government life support and make it compete in the private sector.

Rail certainly has advantages over its air and ground counterparts. It’s more fuel-efficient and produces less pollution. But rail used for freight rather than passengers has shown to be more cost-effective at accomplishing these goals. Even without the use of federal subsidies and in spite of Amtrak’s preferential railway priority, freight rail is increasing its profits.

If Amtrak truly is the “great hope” for commuters fed up with high gas prices and obscene traffic, then the market should be ripe enough for a private passenger rail company to turn a profit. If not, then at least freight rail will be better positioned to compete with trucking freight and relieve road congestion.

John Nothdurft ([email protected]) is budget and tax legislative specialist for The Heartland Institute.