Amtrak Expects Hundreds of Millions of Dollars in Lost Revenue Due to Coronavirus

© WikipediaAmtrak train
Amtrak train - Sputnik International
Railroad company Amtrak, which provides intercity service in the US and to some Canadian cities, is likely to lose several hundred million dollars in revenue during the fiscal year due to the COVID-19 pandemic.

In a memo to employees on Wednesday, Amtrak revealed that its “ridership and revenue have declined sharply over the past few weeks.”

“These reductions have accelerated in recent days and will likely continue for some time. Our future bookings are down 50% year-over-year and our cancellations are up more than 300%, as people reevaluate and change their travel plans.”

Amtrak noted that it has already undertaken “aggressive measures” to cut costs in response to the reduced revenue, adding that there will be reductions in train service in the next few weeks because of the ridership decline. In addition, the company plans on initiating its voluntary leave program for “non-mission critical employees” who are willing to “take off on an unpaid basis.”

“We are also communicating our situation to the US Congress and other policymakers in the federal government so that they are aware of the Coronavirus’ impacts on Amtrak and our partners. In the meantime, we must conserve our resources, putting them to use as efficiently as possible and in ways that continue to drive safety and advance our future,” the memo added.

Last Thursday, the International Air Transport Association (IATA) revealed that airlines could lose up to $113 billion in revenue this year due to the novel coronavirus outbreak.

“IATA now sees 2020 global revenue losses for the passenger business of between $63 billion (in a scenario where COVID-19 is contained in current markets with over 100 cases as of 2 March) and $113 billion (in a scenario with a broader spreading of COVID-19). No estimates are yet available for the impact on cargo operations,” a statement by the group read. 

The IATA also revealed that airline share prices have fallen almost 25% since the COVID-19 outbreak began in December, which is 21 percentage points greater than the decline that occurred during the 2003 outbreak of severe acute respiratory syndrome (SARS), which spread to 37 countries in North America, South America, Europe and Asia, infecting more than 8,000 people and killing 774 before being contained.

US President Donald Trump last week announced that his administration is considering various policies to alleviate the effects of the coronavirus in the US economy, such as a payroll tax cut, paid sick leave for employees and emergency lending for small businesses.

The latest Johns Hopkins University data reveals that there are 1,135 cases of the coronavirus in the US, and at least 30 people in the country have died as a result of the disease.

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