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Amtrak receives $1 billion in federal relief funds

More than $1 billion in federal relief money is being released to Amtrak to keep the railroad system running and its front-line workers on the job during the coronavirus pandemic, Transportation Secretary Elaine Chao announced Friday.

An Amtrak train on the platform at Penn Station in New York.
An Amtrak train on the platform at Penn Station in New York.Read moreTOM GRALISH / Staff Photographer

More than $1 billion in federal relief money is being released to Amtrak to keep the railroad system running and its front-line workers on the job during the coronavirus pandemic, Transportation Secretary Elaine Chao announced Friday.

The additional dollars are a significant boost for the passenger railroad, which saw cancellations spike and cut back service in recent weeks amid an unprecedented drop in passenger traffic caused by the outbreak.

The aid is part of the Coronavirus Aid, Relief, and Economic Security (Cares) Act, a $2 trillion bailout packaged approved by Congress and signed into law last month.

"This $1 billion in federal emergency assistance to Amtrak will help maintain service for its passengers when the economy recovers," Chao said in a statement.

The federal funds will help offset the loss in ticket revenue, which pay for operations, including employee salaries, federal officials said. They will ensure service continues during the crisis and will pay for railroad maintenance, track work and other infrastructure projects, including along the busy Northeast Corridor.

Amtrak daily ridership began to plummet in early March and now down by 95 percent systemwide. Future bookings are down 95 percent year-over-year, according to Amtrak.

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Amtrak officials last month said that the unprecedented revenue and ridership losses led the company to take "aggressive" steps. Amtrak has reduced or suspended service on many of its routes across its network, implemented pay reductions and voluntary furloughs, and suspended the 401(k) match for employees through the end of the year. The Northeast Regional from Boston to Virginia is operating on a reduced schedule, and the popular Acela service is suspended.

"This essential funding will help keep our people working during this unprecedented reduction in travel demand," Amtrak Senior Executive Vice President Stephen Gardner said in a statement. "We will come out of this crisis ready to continue growing ridership and improving our performance."

Of the $1.02 billion, $492 million will go to the Northeast Corridor, which includes the Washington region and $526 million will go Amtrak's national network.

The federal grants, officials say, will also help offset revenue that Amtrak gets from states to support 28 state-funded routes. At least $239 million will go that service.

The Cares Act, which President Donald Trump signed into law March 27, also provides $25 billion in grants to airlines and $4 billion to cargo operators. In addition, the legislation provides $25 billion in loans or loan guarantees to airlines. The package also includes $25 billion for public transit.

To help reduce the spread of the virus, Amtrak said Friday that it is encouraging passengers to use face coverings, as recommended by the Centers for Disease Control and Prevention. The company earlier has temporarily reduced bookings in coach and business class by 50 percent to maintain "recommendations for social distancing onboard our trains."

The carrier is allowing travelers holding tickets to any destination to change their trip without paying a change fee. The fee waiver applies to all reservations made before May 31, Amtrak said, although a fare difference may apply to new itineraries. Travelers may change their trip at Amtrak.com or by using the Amtrak app.