Record Amtrak Passengers Hint at Growing Demand for High-Speed Rail

(Reuters)

Amtrak said Friday it carried more than 30 million passengers in the latest fiscal year, an all-time record that has helped stir interest in a degraded high-speed rail industry.

Supporters of high-speed rail, who have been struggling for years to initiate its adoption in the U.S., say demand for the either loved- or loathed- sector is now clearly visible.

“This proves that obviously there’s a demand. Ridership is soaring out there, and we’re barely even investing,” said Andy Kunz, CEO of the U.S. High Speed Rail Association.

Amtrak ridership was up more than 5% year-over-year in the fiscal period ended Sept. 30 and ticket revenue climbed more than 8% despite significant weather-related disruptions in the Northeast, Central and Western U.S. More than half of Amtrak services set all-time records this year, including seven Amtrak routes that carried more than one million passengers.

The record results come amid growing discussion over high-speed trains in the U.S. The parties in favor of high speed rail claim the need is obvious and the benefits numerous, while those against it say rail is far too expensive and hard to justify in today’s tough economic environment.

At the very least, the increased demand offers another sign travelers are getting fed up with soaring airline fares and fight cancellations, according to Kunz.

Global air travel slowed in August, with passenger traffic falling about 1.5% from July, according to the International Air Transport Association. The U.S. saw the weakest advance in traffic in August at 2.9%, with U.S. domestic travel contracting 1%.

The economic headwinds have started to create problems for major U.S. airlines, including AMR's (NYSE:AMR) American Airlines, which has been fighting off bankruptcy rumors, as well as other airline majors such as Delta (NYSE:DAL) and United Continental (NYSE:UAL) that have considered or already cut capacity. Total industry profits are expected to fall to $4.9 billion in 2012 from $6.9 billion this year, according to the IATA.

Amtrak’s results show that people “want and need a third form of transportation,” Kunz said.

Supporters of more rails say that it would fill a necessary void for medium-distance travelers, where it may be too inconvenient to drive but too costly to fly. Picture New York to Washington D.C. or San Francisco to Los Angeles.

Amtrak pointed to high gasoline prices, continued growth in high-speed rail business travel and effective marketing campaigns as to why it has been successful lately. With the exception of 2009, the commuter rail service has reported record ridership and revenue every year since 2002, which is about the time airlines started to struggle.

“We were created by Congress to fulfill a vital national transportation need and to connect the nation in ways no other mode of transportation can,” said Amtrak chairman Tom Carper.

Of course, government-run Amtrak and its Acela Express still have their problems: low funding, meager profits, speed regulations and sharing tracks with freighters, to name a few. High-speed rail supporters call for a system that is built from the ground up, using rails designated only for high-speed trains and new technologies that whip trains around at speeds faster than 200 miles per hour.

That vision, however, is still young in the U.S. as funding just trickles to the ground-level builders of high-speed train infrastructures and technologies. There also seems to be a fundamental disagreement between supporters and protestors over how its expensive creation will benefit Americans or the broader economy.

The High Speed Rail Association hopes to address some of these issues at its upcoming conference in New York City this November, where it plans to display the benefits of high speed rail to business owners and exemplify the potential profitability that can emerge from its adoption.

Either way, it seems the U.S. will have to wait some time until it can even dream of catching up to Europe's speedy and expansive Eurostar or China's longest and fastest trains in the world. That's if it ever becomes a priority to the U.S. at all.