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Amtrak Hopes Expanded Service Will Boost Bottom Line
By Laurence Arnold   Associated Press
WASHINGTON — Amtrak, charting a course of expansion rather than cuts, aims to become financial viable by serving new passenger markets and filling a niche in the time-sensitive delivery business.

The railroad's new "network growth strategy" will be unveiled officially Tuesday, although portions were disclosed in recent days.

The plan would expand or improve service in 21 states, add 11 route segments and increase train frequency on three routes. It also would boost by 10 percent the number of station-to-station links and bring trains to the areas of 4 million potential new passengers.

"This is a very different approach to the business, a growth-oriented approach as opposed to a nickel-and-dime-yourself-to-death approach," said Amtrak President George Warrington.

Sen. Kay Bailey Hutchison, R-Texas, chairwoman of a Senate subcommittee overseeing Amtrak, praised the corporation's new strategy.

"It's very creative and innovative," she said. "I can't say enough about the new leadership at Amtrak. They're thinking outside the box, and that is what Amtrak needed."

Amtrak projects that the changes, when fully implemented, will generate $229 million in new annual revenue and cause a net gain of $65 million in 2003. The timing is crucial for Amtrak. Under legislation passed in 1997, it has until the end of fiscal year 2002 to wean itself from federal operating subsidies or face possible liquidation.

The railroad now operates a 22,000-mile system that serves more than 500 communities in 45 states.

The changes do not require approval by Congress. But in order to implement them, Amtrak will have to strike deals with various freight railroads whose tracks is uses.

Under the plan, Amtrak trains will begin stopping in Des Moines and Iowa City, Iowa; Rockford, Ill.; Vicksburg, Miss.; Monroe and Shreveport, La.; Lake Geneva and Janesville, Wis.; and destinations on the Atlantic Coast of Florida including Daytona Beach, Cape Canaveral and Fort Pierce.

Also, people as far north as Boston will be able to board a train and travel to Florida without having to transfer in New York. Gamblers will find more trains to take them to Shreveport's casinos. Riders can board in Michigan, sleep as their train dashes through Canada and wake up in upstate New York, on the way to New York City.

There are losers as well.

By taking a northern route through more heavily populated cities in Texas, the Sunset Limited train will no longer stop in Del Rio, Alpine and Sanderson.

Similarly, the International will stop in Ann Arbor and Dearborn, Mich., but no longer serve five other Michigan cities — East Lansing, Durand, Flint, Lapeer and Port Huron.

Warrington said the plan reflects a hard lesson Amtrak learned in the mid-1990s: Cuts in service bring numerous complaints and fewer financial savings than expected.

"We've tried in the past to shrink, and all we've done is irritate people, reduce service and profits and ridership. And that's no way to run a railroad," said Wisconsin Gov. Tommy Thompson, chairman of Amtrak's governing board. "The board is committed to building a national railroad system, and this is a giant step forward to doing it."

Illustrative of Amtrak's new philosophy is its treatment of the Sunset Limited, a money-loser that threads its way along the southern United States from Jacksonville, Fla., to Los Angeles.

The growth strategy says that eliminating the Sunset Limited would save $8 million in costs but deprive Amtrak of $9.5 million in fares from passengers and fees from deliveries that rely on that line to connect to other routes.

Warrington said dicates that adjustments, not wholesale changes, are needed to strengthen Amtrak, which was created in 1971 following the demise of passenger service by major railroads.

With the exception of a luxury transcontinental route designed to link New York and Los Angeles in 60 hours, Amtrak is proposing no new long-distance routes. Rather, the plan calls for strategic extensions, shifting equipment around and paying greater attention to mail and express business.

A case in point is the Crescent, which travels between New York and New Orleans.

Plans call for the train to separate in Meridian, Miss., with one segment heading west to Fort Worth, while the other continues south to New Orleans. This would allow Amtrak to add service to Vicksburg, Miss., and to Monroe and Shreveport, La., while building opportunities for mail and express deliveries between Dallas-Fort Worth and the East Coast.

The expected payoff is an additional $7.7 million a year as of 2003.

The mail and express business is key to Amtrak's recipe for financial recovery, as is a plan to begin hauling meat, poultry, fruit and vegetables in refrigerated cars attached to intercity trains.

Sensitive to the concerns of freight railroads, Warrington stressed that he is looking to complement what they do, not to compete, and to enter into partnerships to make the best use of the tracks they and Amtrak share.

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