Will 2015 be the year that Amtrak turns a profit?

Nine months in to Amtrak’s fiscal year and it is clear that 2014 is going to be Amtrak’s best year ever financially. Indeed, not only is it set to post the lowest loss in inflation adjusted dollars in its history, but the lowest loss in nominal dollars. In three of the months this year; October, December, and June; Amtrak has posted an operational profit, that is to say that it’s revenues have exceeded the costs of providing the service (but not accounting for items such as depreciation). These revenues were sufficiently great that, even with November showing a loss, Amtrak managed to eke out a profitable first quarter.

For the year to date, Amtrak has posted a loss of $128.4 million and is currently projecting a total loss for the year of $233.3 million. However, to do this, it would need to lose $35 million each month during its best performing time of year. Last year, between all three months combined, it lost only $34 million, posting a slight profit in July of $3 million. For it to show a loss of over a hundred million dollars instead would require that some truly amazing feats of accounting over the previous year. That’s not to say that that hasn’t happened: There is currently a $40.4 million in Auto Train expenses that appear to have vanished into the ether. Should it reappear, it will pose a rather significant impact to Amtrak’s bottom line. If, however, it truly has disappeared, and Amtrak’s performance in the fourth quarter matches that of the rest of the year, we should see operating profits in July and August both, with a small loss in September bringing Amtrak to a total operational loss for the year of only $95 million compared to last year’s $355 million loss.

What accounts for this dramatic change in fortunes? Some of it is the result of increased state payments, but this would be the smallest change. There is so far only a $35.6 million increase in revenue credited to state supported train revenue and $62.9 million expected for the whole year. This is dwarfed by the $79.2 million in increased ticket revenues and the $72.2 million reduction in expenses compared to 2013.

Will Amtrak be able to match this performance next year and thus post a small operating profit? It’s possible. This year has shown a net drop in ridership, even with adjustments to represent more accurate counting (multi-pass ridership was significantly overestimated), and revenue has been mostly stagnant outside of the Acela. If Amtrak can manage to grow ridership and revenue in its other segments next year, it should have a fairly strong chance of meeting that goal. Even if 2015 turns out not to be the year that Amtrak makes an operating profit, we should see it by the end of the decade as new equipment, especially the Acela replacement, comes online and expands Amtrak’s capacity.