Amtrak Loses Millions on Food Service

December 3, 2013

Amtrak, the U.S. taxpayer-supported passenger railroad, is losing tens of millions of dollars a year on food and beverage service even after years of cost cutting, says Bloomberg.

Almost all of last year's $72 million in food-service losses were from providing meals on long-distance trains, Amtrak Inspector General Ted Alves said in testimony at a House Oversight and Government Reform Committee hearing. Contracting out some functions has the greatest potential to stem losses, he said.

  • Amtrak's Auto Train from Virginia to Florida offers passengers complimentary wine and cheese, and three long-distance routes provide complimentary wine and champagne to sleeper-car passengers, Alves said, costing Amtrak $428,000 in 2012.
  • Amtrak employees traveling on free passes consumed about $260,000 in complimentary meals on the Auto Train, Alves said.

The railroad is continuing to make improvements and expects to break even on food service within the next five years, Thomas Hall, the railroad's customer service chief, said in his prepared testimony.

  • Changes have included cashless sales, staffing reductions and supply-chain improvements.
  • Losses have been reduced by 30 percent since 2006, he said.

The latest audit shows Amtrak's reported improvements in food and beverage finances are the result of transferring a portion of increased ticket revenue to food service accounts, Florida Republican John Mica said in a statement.

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

Source: Jeff Plungis & Alan Levin, "Amtrak Serving Free Wine to Steak Loses Millions on Food," Bloomberg, November 14, 2013.

 

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