Amtrak using Web discounts to raise a few bucks
NEW YORK (Reuters) - Six dollars might not fill up your car's gasoline tank, but it can get you from Chicago to Detroit on Amtrak.
Beleaguered U.S. passenger rail system Amtrak, which was bailed out by the government last week and says it needs a $1.2 billion cash injection to run through September 2003, is increasingly relying on Internet clearance sales -- with discounts as high as 88 percent -- to unload empty seats.
Heading from St. Louis to Kansas City? Try the special fare of $5.30 on the 283-mile trip, a discount of 80 percent. And a weekend jaunt from Seattle to Portland can be found for $7.20, about 69 percent off the normal fare.
Before the government deal, Amtrak's crisis shook train travelers with threats of a shutdown to begin after July 4.
The discounts may seem counter to Amtrak's cash-raising goal, but its rationale is simple: the trains are running anyway, so a ticket that brings in even a few dollars is better than leaving the seat empty.
"To haul an empty seat and to have no revenue, it's better to sell it for a nickel," said Gilbert Carmichael, chairman of the Amtrak Reform Council, a bipartisan federal commission that reports to Congress on Amtrak's performance.
Still, do not expect discounts on the some of the more popular trips, such as the Boston-to-Washington line, the rail system's biggest moneymaker.
On a recent day, Amtrak sold 381 clearance tickets, which can be found on Amtrak's Web site under the "Rail Sale" promotion, said Amtrak spokesman Clifford Black. That's more than 10 times as many as it sold daily last year, Black said.
The clearance sales have created some extraordinary discounts. The trip between Grand Rapids, Michigan and Chicago, which winds along 176 miles of track and normally costs $35.00, can be bought for $4.30.
The reason? On a recent day, Amtrak carried only 84 passengers on the journey, leaving around 150 seats empty.
Black said Amtrak managers place blocks of seats on clearance depending on capacity. Clearance seats are limited in number, and carry heavy restrictions.
Amtrak's deep discounts also may lure customers into considering rail travel as an alternative to cars and planes, said John Spychalski, a transportation expert at Pennsylvania State University, particularly those travelers still fearing plane travel after last September's attacks on America.
"In some cases, it does work and will bring them back even though the fare the next time might be higher," he said.
However, the fate of Amtrak is in the hands of the federal government, which agreed in last week's deal to supply a $100 million loan to keep it going through summer.
To be sure, rail fare sales will play only a small part in boosting Amtrak's revenue. Of the 65,000 tickets sold on an average day, Black said, fewer than 400 tickets are sold at Internet-only clearance prices. Another 6,400 are sold on the Web at regular fares.