MIAMI – Former Delta Air Lines President and CEO, Richard Anderson, was announced as the new Chief Executive of Amtrak on Monday.
Anderson assumes his position during a difficult time at the United States’ largest passenger rail company. Amtrak is currently facing pressure from New York Governor Andrew Cuomo to turn over control of Manhattan’s Penn Station due to poor conditions and a series of minor train derailments from unsafe track conditions.
Cuomo and New Jersey Governor Chris Christie have publically threatened to withhold state payments to Amtrak should Amtrak not turn over control.
In addition, Amtrak has been wildly unprofitable for many years and continues to leak millions of dollars annually. In 2016, Amtrak posted an unaudited operating loss of $227 million dollars from a record $3.2 billion in revenue.
Anderson entered the transit world in in 2001 when he was named CEO of Northwest Airlines. After leaving Northwest to serve as CEO of Untied Healthcare from 2004-2007, Anderson once again returned to the airline industry as CEO of Delta Air Lines during its merger with Northwest.
During his tenure at Delta, Anderson oversaw a historic turnaround that catapulted Delta from chapter 11 bankruptcy to becoming a profit machine. Under his reign, Delta invested heavily in aircraft, infrastructure, and human capital while remaining what he called “Delta Proud.”
After stepping down as President and CEO of Delta on May 2nd, 2016, Richard assumed the position as Executive Chairman of the Delta Board of Directors. After a brief stay on the Board of Directors, Anderson retired from his position on October 11th, 2016.
Anderson is sure to face increasing pressure to cut many of Amtrak’s unprofitable routes. While shorter routes like Amtrak’s Northeast Regional turn a profit, many of its transcontinental routes like the California Zephyr (Chicago to San Francisco) lose hundreds of millions of dollars annually combined.
Under President Donald Trump’s newly proposed budget, Amtrak is set to encounter large federal funding cuts. These cuts will likely force Amtrak to cut many of its longer routes. In addition to these cuts, Amtrak will also lose federal grant money for future rail expansion.
The impending cuts are a stark contrast from the Obama Administration where Vice-President Joe Biden lobbied heavily for Amtrak.