Amtrak Serves Free Wine, Loses $72 Million

The taxpayer-supported passenger railroad is losing millions of dollars a year on food and beverage services

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Correction appended

Amtrak, the federally-supported U.S. national railroad, lost $72 million in food-service expenses last year, with some losses stemming from long-distance trains on which passengers get complimentary wine and cheese.

Inspector General Ted Alves highlighted the food-related shortfalls in testimony at the House Oversight and Government Reform Committee hearing Thursday. Alves said operating losses on food and drink are a major cause of the railroads dependence on federal dollar to keep running.

The railroad’s customer service chief said in prepared remarks that Amtrak expects to break even on food service within five years through changes like introducing cashless sales, staffing reductions and supply-chain improvements.

Florida Republican John Mica said that any improvements in food service finances were a result of mere accounting tricks, Bloomberg reports.

“The Amtrak Inspector General has confirmed that Amtrak cooked the books to cover up food service losses that now approach $1 billion,” Mica said.

Correction: This story originally reported incorrectly the extent to which trains serving complimentary wine and cheese are responsible for the losses Amtrak incurs on food services. Only some of the trains responsible for the heaviest food-services losses serve free wine and cheese, not “almost all” of them.

[Bloomberg]

23 comments
JimLoomis
JimLoomis

This is a distillation of a Bloomberg story that still has Ed Murrow spinning in his grave. Grossly and -- unless the 'reporters' involved are monumentally stupid -- deliberately misleading. Free wine for passengers? Well, yes ... on two trains, Amtrak holds on board wine tastings for as many as 15 or 20 sleeping car passengers. The wine  is provided by wineries in exchange for the promotion and Amtrak makes a few dollars when passengers purchase a bottle or two. Otherwise, wine in the dining cars is sold: 15 bucks for a half bottle.  Seriously, folks, this "story" is a joke and one or more of the TIME editors should be plenty upset at being snookered by this atrocious piece of non-reporting.

JohnKovacich
JohnKovacich

why does the name 'amtrak' and 'loose money' always seem to go together.

1Chuck
1Chuck

I don't get it. Who says one fraction of Amtrak service has to break even? Do station agent salaries have to be balanced by…what, station admission charges? Do we have to pay extra so Amtrak can afford to have conductors and engineers without running a payroll deficit? Maybe we should have to volunteer to work on track gangs and on rolling-stock maintenance? Remember the millions the government provides for airport and highway support. 

reallife
reallife

And they say the government can't do anything right...

One more reason to give them control of our healthcare

LOL


MarkStephenSouder
MarkStephenSouder

The lead paragraph was a bit misleading... the wine and cheese are part of an afternoon "wine and cheese tasting" for sleeping passengers on the Coast Starlight route. The author makes it sound like everybody on every route is getting free wine.

chrism_68
chrism_68

$72 million in losses in 1 year makes no sense to me either.  Airlines somehow manage to serve free meals to millions of passengers it is just built into the ticket price.  Does Amtrack divert no money from tickets to food?  Is it all based on sales of food?  This is ridiculous then they are running at a huge loss because they know it will be covered somewhere else?

DanielMoreau
DanielMoreau

This simply doesn't make sense. Seventy-two millions in cheese and wine? This is something that might happen in Afghanistan, but not here. Really. Questions that number, someone.

AlphaJuliette
AlphaJuliette

Another reason Amtrak is losing money is because taking the train is usually much slower than taking a plane or even your car.  It's inconvenient and the ride is simply awful.  Amtrak shares the rails with freight trains which get priority passage.

Travel by rail will become profitable when Amtrack has dedicated rails and can become high speed.  These two aspects will compete directly on a regional basis with air travel.

Openminded1
Openminded1

Had i known that I would have taken the train more often, but the real reason they loose money is because they charge more then the airlines and do not have enough ridership.

Ivy_B
Ivy_B

Price of first class ticket which gets that glass of free bad wine is more than double economy airfare. Rest of food is terrible. That may have more to do with losses.

AlphaJuliette
AlphaJuliette

@1Chuck 

Amtrack, like the Post Office, should be a self sustaining enterprise.

ZT205
ZT205

@1Chuck That's a good point, but I think the argument is that Amtrak's food costs are so ridiculous, they could be providing similar service for a lot less, and the costs certainly exceed the value added. It definitely seems that way whenever I'm riding and half to wait in line for 20 minutes to buy one very small super-overpriced food item that may or may not be in stock. I don't think I'd be willing to pay much less to ride Amtrak if I just had to pack my own food, and assuming other consumers feel similarly, they'd save a lot more money just filling the cafe car with seats.

ARTRaveler
ARTRaveler

@reallife Go tell your grandparents to give up their Medicare and Social Security and see if you get out without having your mouth washed out with soap.

AlphaJuliette
AlphaJuliette

@MarkStephenSouder 

Very true.  I bought such a ticket a few years ago on a Seattle to Los Angeles run.  The afternoon wine & cheese was nice.  You would go up into the observation car and watch the scenery go by and enjoyed the company of other travelers.  BUT.......!

The trip was far too long.  Not because of the stops at other train stations along the way but for the priority the track gave to the numerous freight trains.  We would be side tracked often and for long periods of time.  When side tracked all electricity is turned off which also halts environmental controls.  The condition of the tracks themselves are pretty brutal.  They are very uneven which makes for a ride that rivals a small boat in a tossed sea.

The benefits of traveling by rail were overwhelmed by the flaws in my opinion.  Should Amtrack have a dedicated high speed rail service between these two cities then I believe they could actually make money.

ARTRaveler
ARTRaveler

@chrism_68 You really  think the airlines give you airline food?  Try to find one that doesn't charge you directly. American saved $1 million a year by taking one black olive off each salad in 1st class.  There is no free food, it is in your ticket, just like the gasoline for the seat you are in (they don't care about who is in the seat), the pay for the pilot and co-pilot, and the stewardess, and the fate and landing and take-off fees.  There is no free lunch and on most airlines, no lunch, no sodas, and even no peanuts..

ARTRaveler
ARTRaveler

@AlphaJuliette When the Canadian railroad companies wanted to cut passenger service, their federal government told them it was a seven year process and they decided that if they were going to take that long, might as well improve it and make a profit.  The US gives priority to freights, especially unit trains (coal, orange juice) and all it would take is (1) a law to give passenger trains the priority and (2) get the railroads to fix their damn rails where there are sections between Chicago and NYC and DC where the speed limit is 20 mph.

Trains are a more comfortable, less hurried way to travel if you have the time. NO TSA!  After all, this is a really big country and we left a number of states , not on the coats, out of the entire passenger service.

AlphaJuliette
AlphaJuliette

@Ivy_B 

I would like to see a real effort in improving rail travel as it can be economical and much more energy efficient.  Improve ridership with dedicated rails and make the trains high speed and oila!  you will have a direct competitive edge against regional air.

AlphaJuliette
AlphaJuliette

@ARTRaveler 

I see and largely agree with your point ARTRaveler.  Looking into the future I don't believe our love affair with the automobile is sustainable.  With a limited global supply of crude oil ( the easy stuff has been found and tapped and oil is now harder to extract) and global warming becoming more manifest a turn to mass transit is bound to become very significant.  Travel and commuting by rail will become a huge player intra and inter city.  Dedicated track will be the best way forward.  And high speed rail is going to compete regionally with airlines.

There is huge opportunity here.  But it's going to require a paradigm shift on the part of a population used to a different style of transport.