Amtrak After Acela Woes

Amtrak’s signature high-speed rail service Acela has traveled some rough rails in its brief history. But maybe the toughest stretch has been this past summer, when a near-shutdown of the entire line and mechanical problems halted Acela in the Northeast Corridor.

Amtrak hasn’t yet addressed the problems in its marketing campaign, which is centered on the Acela between Boston and Washington, D.C. Troubles with Acela are particularly worrisome for Amtrak. Competition between rail and the USAir and Delta shuttles are fierce, and Acela had been helping Amtrak win market share among business travelers.

In the past five years, Amtrak’s share of the Northeast Corridor market has jumped from 19% to 42% as the airline’s share has fallen from 81% to 58%.

When Acela was announced in the late 1990s, Amtrak pinned its hopes and a great deal of advertising on the service. Amtrak began a branding campaign, first explaining the unusual name (a combination of acceleration and excellence) and then touting the comfort and convenience.

“There was a lot of anticipation about the service and the name,” said Barbara Richardson, Amtrak’s chief of marketing and sales. The awareness was heightened by a teaser campaign.

Awareness was heightened in a different way in the fall of 1999, when the launch date was postponed because of mechanical problems. Ads were pulled, although some had run. It wasn’t until more than a year later, in December 2000, that Acela finally got under way.

“Clearly, it was a major embarrassment when Acela didn’t start when they said it would,” said Richard Barsness, professor of management at Lehigh University. “You don’t want to promote your service to the point where you can’t meet the demand.”

Rumors of service interruptions, or changes from Acela Express to slower Amtrak service on the Northeast Corridor, have plagued Acela even as its popularity among business travelers has grown. It reached a height with the halt to Acela this summer, which was also marked by a threatened shutdown for financial reasons.

“This comes at a very bad time,” said John Spychalski, professor of business logistics at Penn State University. “They’re losing revenue every time they keep one of those trains offline.” But if it had to happen, Spychalski said, summer is probably the best time because of fewer business travelers. He said Acela’s continued high market share depends on whether Amtrak is able to complete the repairs quickly and keep the fleet healthy.

But Spychalski said Amtrak could use these problems to their advantage with some savvy marketing. He pointed out that Amtrak’s management didn’t blink before removing Acela from service at the first sign of trouble.

“Amtrak didn’t mess around,” he said. “They put safety first.” This could be capitalized on with Amtrak officials explaining their decisions and reassuring the rail-riding public that things are getting better and will stay that way. He pointed to a recent full-page ad in The Wall Street Journal from USAir’s CEO, explaining why USAir had filed for bankruptcy.

Richardson, Amtrak’s marketing chief, said ads had gone up on some of Amtrak’s trains and other areas for passengers, explaining some of the changes. It might also be the subject or part of it in Amtrak’s fall campaign, which is still being designed. Richardson said the advertising people were thinking about that right now. Amtrak had planned to emphasize Acela’s schedule and frequency but may address other concerns now too.

“We have lots of different ways of doing it,” she said. “We have to continue to tell people that we’re in business, are working to improve it, and let them know they can count on us.”

A campaign that started in March – print, outdoor, radio and some TV in the major markets between Washington and Boston – has pretty much run out. Some of the sports sponsorships continue, such as radio spots within baseball games and big signs at Shea Stadium in New York and the MCI Center in Washington, D.C. It hasn’t been decided yet what the media mix will be for this fall’s campaign.

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