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

13 April 2020 (Last Updated April 13th, 2020 09:29)

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.

Covid-19 impact: Amtrak secures $1bn in federal funding
With the federal aid, Amtrak will offset the loss of ticket revenue, which is used to pay the employees and fund its operations. Credit: Kevin Phillips from Pixabay.

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.

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.