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April 13, 2020

Covid-19 impact: Amtrak secures $1bn in federal funding

US-based passenger railroad service Amtrak has received $1bn in federal funds as it faces an unprecedented fall in ridership due to the Covid-19 crisis.

US-based passenger railroad service Amtrak has received $1bn in federal funds as it faces an unprecedented fall in ridership due to the Covid-19 crisis.

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The emergency aid was allocated by the Department of Transportation’s (DOT) Federal Railroad Administration (FRA) through the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The funding will help Amtrak to maintain its services as well as respond to the present crisis and the pandemic’s impact on its business.

FRA Administrator Ronald L. Batory said: “This funding will help ensure that Amtrak is able to quickly return to service supporting both the public’s transportation mobility needs, and America’s economic recovery from the Covid-19 public health emergency.

“We are committed to transparency and are requiring enhanced reporting from Amtrak to show how the CARES Act funding is being efficiently and effectively used to respond to present challenges.”

In the recent weeks, Amtrak’s ridership plummeted more than 90% forcing the rail operator to suspend operations on certain routes. The company also witnessed a sharp drop in future ticket purchases for the coming months.

With the federal aid, Amtrak aims to offset the loss of ticket revenue, which is used to pay the employees and fund its operations.

Of the total funding, FRA allocated $492m for the Northeast Corridor and $526m for the National Network.

Amtrak senior executive vice-president Stephen Gardner said: “After Amtrak’s best year ever in 2019, this essential funding will help keep our people working during this unprecedented reduction in travel demand.

“We thank Secretary Chao and Administrator Batory for their leadership and with this necessary financial support, we will come out of this crisis ready to continue growing ridership and improving our performance.”

Overall, Amtrak operates more than 300 trains daily across 46 states, the District of Columbia and three Canadian provinces.

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Free Report
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What’s missing from your IPO industry assessment?

IPO activity all but stopped in 2020, as the investment community grew wary of the effects of COVID-19 on economies. No matter how deserving a business was of flotation, momentum was halted by concerns of when a ‘new normal’ of working patterns and trade would set in. Recently, sentiment has changed. Flotations picked up again during the second half of 2021, and now in 2022 the mood is decidedly optimistic. Business leaders have their eyes on fast rebounding economies, buoyant market indices and the opportunity once again to take their businesses public. As a result, global IPOs are expected to hit back this year. With GlobalData’s new whitepaper, ‘IPOs in Consumer and Retail: 5 must-include elements for your prospectus industry report’, you can explore exactly what is needed in the essential literature. GlobalData’s focus lies in the critical areas to get right:
  • Macroeconomic and demographic environment
  • Consumer context
  • Industry environment
  • Competitive environment
  • Route to market
Interested to learn more about what to include in your IPO Industry Assessment report? Download our free whitepaper.
by GlobalData
Enter your details here to receive your free Report.

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