Highlights of Amtrak's FY1999-02 Strategic Business Plan

Maximizing Amtrak's Potential in the Marketplace

Key Business Strategies: Amtrak will fulfill its business vision of preserving a national system, achieving operating self-sufficiency, and transforming the company into a more commercially-oriented and economically viable corporation through five key strategies:

• Build a market-based network -- An extensive market-based research analysis is now underway to define consumer demand, identify opportunities for growth in rail service, and increase Amtrak's market share of America's travel business.

• Develop corridor services -- Amtrak is working with states and partners to develop new rail corridors across the country, using the expertise that Amtrak has acquired while building the high speed rail program, scheduled for launch in late 1999. The corridors of the future include the Midwest regional hub out of Chicago, and those located in California, the Pacific Northwest, the Southeast, along the Gulf Coast, and in New York State.

• Deliver consistent quality service -- A service standards program will be developed to ensure consistent, quality service delivery and ultimately, customer loyalty and ridership growth.

• Revitalize the Amtrak brand -- A commercial approach to revitalize the corporation's brand and image is underway to better depict Amtrak's new product and to ensure its competitive positioning among all transportation carriers.

• Leverage public and private partnerships -- To generate revenue to support basic rail services and maximize Amtrak's own investments, commercial and investment partners will be identified over the next year for business alliances.

Operating Plan: Amtrak is pursuing eleven operating initiatives that directly support two or more of the five key business strategies.

Operating Initiatives	Build a Market-Based Network	Develop Corridor Services	Deliver Consistent Quality Service	Revitalize the Amtrak Brand	Leverage Public and Private Partnerships
Launch High Speed Rail	X	X	X	X	X
Grow Mail & Express Business	X	X			X
Manage Sales & Distribution Network	X		X	X
Improve Equipment Quality & Mgmt	X	X	X	X	X
Contain Core Operating Costs	X		X	X
Pursue New Commercial Ventures	X	X		X	X
Advance Information Technology	X		X
Continue Safety Excellence	X		X	X
Conclude Labor Negotiations	X			X
Capitalize on Human Resources	X		X
Develop Contract Commuter Services	X	X			X

High Speed Rail is a critical revenue generator which will contribute $180 million in net annual revenue by Fiscal Year 2002. Launching high speed service means more than just new trains and faster speeds. It involves a literal transformation of service, all equipment, infrastructure, and every aspect of a customer's journey with Amtrak.

High speed rail is on schedule with the following key dates:

• Electrification completed in the fall of 1999;
• First high speed trainsets begin to be delivered for service in late 1999; and
• Full high speed service implemented by the fall of 2000.

Mail and Express is another key component of Amtrak's plan to achieve profitability. A recent favorable Surface Transportation Board ruling makes way for Amtrak to compete in the $247 billion ground transportation market. While Amtrak currently controls less than one percent of the goods handling market, even modest gains could make a significant difference in the financial health of long-distance trains.

Capital Investment The business plan outlines significant investments in capital projects all designed to secure the viability of the national rail system. The capital investment plan for FY99 calls for $823 million in federally funded capital projects including:

• $313 million for new business development;
• $142 million for equipment overhauls and replacements; and
• $165 million for basic infrastructure investments.

In addition, the capital plan for FY1999 also includes $144 million for investments in new corridors.

The FY99 investment program generates an additional $303 million in funding from outside partners. Excluding the high-yielding high speed rail projects, Amtrak's total capital plan for FY1999 is expected to yield a cumulative bottom-line improvement for the corporation of $129 million.

Business Plan Performance Goals
Performance goals through Fiscal Year 2002 include:

• Increase gross revenues by $789 million from FY98 due to new and more frequent passenger rail services based on market-driven demands, an expansion of the mail and express businesses, and an energized focus on new commercial opportunities;
• Increase ridership by 4.4 million passengers over 1998 for a 21% increase over four years;
• Produce net incremental revenues of $180 million per year by inaugurating high speed rail service;
• Increase the budget result of express operations from $4 million in 1999 to $25 million by FY2002;
• Improve the annual operating performance by $426 million in FY2002.

Conclusion Amtrak is working hard to make its vision a reality. It has developed strategies that will enable the Corporation to re-direct itself toward a market-driven national service and in doing so permit it to achieve the economic viability so crucial to keeping a national passenger rail service alive in America.

More detailed information about Amtrak's Strategic Business Plan:

Business Vision
The Operating Plan
On the Path to Self-Sufficiency
Build a Market-Based Network
Develop Corridor Services
Deliver Consistent Quality Service
Revitalize the Amtrak Brand
Leverage Public and Private Partnerships