advertisement

SSN on Facebook SSN on Twitter SSN on YouTube RSS Feed

21 Comments
Politics

Virgin Trains Reports Ridership Spike, Operating Losses as Work Begins on Orlando Extension

July 8, 2019 - 8:30am
Virgin Trains, formerly Brightline, in Fort Lauderdale
Virgin Trains, formerly Brightline, in Fort Lauderdale

As Virgin Trains USA moves forward with its $4 billion, 170-mile expansion linking West Palm Beach and Orlando between Miami, Fort Lauderdale and West Palm during the first three months of 2019, a 2.5 percent increase over the last three months of 2018.

During the same first three months of 2019, it reported an operating loss of $23.7 million, a deficit anticipated as it launched its three-year Phase 2 expansion after securing $2.7 billion in private bonds to remove $600 million in bond debt from its Phase 1 construction of its Miami to West Palm Beach rail line.

The company, formerly Brightline (and before that, All Aboard Florida), was purchased in November 2018. The private passenger service reported an increase in ridership on its existing tracks and -- as expected -- operating losses.

According to Virgin Trains, its high-speed trains carried 244,178 riders on its 65-mile rail system by British entrepreneur Richard Branson. It is the only privately owned and operated intercity passenger railroad in the U.S. and the first new one established since 1983.

In a disclosure form filed with the state late last year, Virgin Trains stated ridership in 2018 was about half of what had been predicted, and that it had lost $87 million in the first nine months.

The company, which has not reported its second-quarter 2019 ridership and financial data, nevertheless maintains it has topped 1 million total passenger rides over the last year, which would fall belatedly within projections issued by the consulting firm Louis Berger, which said the company would top 1 million riders in its first 12 months of operation.

But Berger’s analysis did not anticipate delays in opening stations. Virgin Trains’ South Florida line was phased in during 2018, with the West Palm Beach to Fort Lauderdale run opening in mid-January and the Miami line not opening until late May. The service has only operated with its full schedule of 16 roundtrips a day since August.

With those factors in its calculations, a December analysis released by credit ratings agency Fitch Ratings, indicated ridership was actually ahead of analyst projections, which was pivotal in securing financing for the expansion to Orlando by 2022.

In its first quarter 2019 unaudited financial statement released June 28, Virgin Trains reported first-quarter passenger fare revenue of $5.4 million, seven times what it collected in the first quarter of 2018.

Virgin Trains noted it has seen growth in ridership and revenue in every quarter, including growth in business and commuter riders, and that nearly half of its riders travel the full length from West Palm Beach to Miami, which it cites as a strong indicator that trains are preferred transportation options for trips too short to fly and too long to drive.

In May, Virgin Trains announced it had hired five contractors to begin construction of its Phase 2 expansion.

“Connecting Central and South Florida will bring thousands of jobs today and by modernizing infrastructure, we will strengthen Florida's economy for decades,” Virgin Trains USA President Patrick Goddard said. “For a project of this scope and magnitude, a world-class construction team has been assembled to undertake this tremendous assignment and we congratulate them helping us make history.”

Phase 2 spans four zones, with work in Zone One and Zone Two beginning in May. Zone One is approximately 70 acres, one mile south of Orlando International Airport [OIA]. Zone Two is a 3.5-mile section within OIA where a station and maintenance center are planned.

“This monumental infrastructure project will include the laying of 490,000 ties and transporting 2.35 million tons of granite and limestone by 20,000 railcars,” the company said in a release. “Additionally, approximately 2 million spikes and bolts will be hammered and put in place over the next 36 months. During this process, Virgin Trains USA Phase 2 will generate more than 10,000 jobs and over $650 million in federal, state and local tax revenue.”

Zone Three is approximately 35 miles of rail alignment following the Highway 528 corridor between OIA and Cocoa.

Zone Four includes the upgrade of 129 miles of existing track that will allow trains to travel up to 110 miles-per-hour.

When completed in 2022, Virgin Trains' line will span 235 miles, connecting Miami to Orlando by rail in less than three hours.

John Haughey is the Florida contributor to The Center Square.

Comments

I love trains and the idea but too bad they went cheap and didn't elevate the tracks. As a result the trains run slower and there has already been several accidents. There's been plenty of example of how to do high speed rail right and wrong. This adds to another example of how it could have been done right but since it was done wrong it will suffer to ever get off the ground.

Virgin Trains needs to capture just 7% of the Miami - Orlando travel market to break even. Many of those travelers are tourists, not locals. They don't have or want a car, they just want to get from point-to-point. This is a corridor service, with frequent departures. The last mile problem is well served by taxis, ubers, walking, hotel shuttle buses and the like. Those who cannot comprehend a train schedule, will just have to compensate by spending hours in their 'ultimate stuck in traffic machine'.

"needs to capture" BUT HASN'T, AND WON'T. A few years from now, or earlier, we'll all be rolling our eyes saying what we've said so many times before: "insanity is doing the same thing over and over again and expecting a different result".

These trains are really great. I truly enjoy taking them and driving less often. It has improved my life substantially because now I can do things while I ride instead of just mindlessly staring at a road.

In that case, I have a bridge I'd like to sell you.

You lie.

What a Ponzi scheme! We Are NOT EUROPE! Who would want to be Europe?! It was all part of Agenda 21 now America 2030! Globalism! And FREIGHT! Lets do a Public-Private deal! Who ends up eating the LOSSES? Sure as hell not the Corporation! Those who have followed this joke since its inception of "All Aboard Florida" know is has nothing to do with passenger rail! Ah yes, and the very same Richard Branson of Virgin in the "little black book" of Jeffery Epstein. He also endorsed World Ethical Foundations Consortium, a foundation of Keith Raniere. AND the NXIVM parties at his island (yes he also has an island) Wait until all of that disgusting nightmare comes out! How appropriate that it was Palm Beach court that covered up and got off an evil serpent (Epstein) so Floridians could have a train named after another evil serpent! NGO's should be banned in our state! They make decisions that our elected officials should be making! WTH are we paying them for if someone we didn't vote for is running the show? I am so glad that Fort Pierce city council voted down the submitted plan for vacant property to put a "Virgin" train station in!

I LOVE these trains and take them the time. They are beautiful, safe, and much more pleasant than driving. You sound like a raving lunatic. All that stuff you mentioned is just random distractions and has nothing to do with taking a train. Europe has a lot of things that are BETTER than America, and we could learn a lot if we just swallowed our ego and opened our eyes.

Never once has one of these trains had door to door scheduling to offer that was more convenient than driving my own vehicle. I could have gone out of my way, yes, but that would have badly messed up my schedule. Some people just refuse to accept the reality that these trains will NEVER go mainstream unless the government takes our other options away either by mandate or by artificially making them unaffordable. No thanks!

An amazing deal for all of you, if you want to earn 120$ per hour and 960$ of 8 hour working duty on your computer so come and join me and copy this link COPY THIS WEBSITE HERE☛ www.broguru.com

We understand Hillary. We're happy you've found employment. No move along.

This train is not "by British entrepreneur Richard Branson" any more than my car would be by "Uber" if I started a cab service and Uber licensed me the name "Uber Florida." The actual Virgin entity has absolutely no role in the operation of this business and has merely licensed the name for a fee to the same people who have been running it all along. However, the actual Virgin Trains has recently gone bust on another line in the UK so I a not sure they could help if they tried. Unfortunately for the bondholders, ridership is not the proper metric. At one point, I believe they were advertising "buy one ticket, get four free!" They are hoping for smoke and mirrors by subsidizing tickets and giving them away. Look for in excess of $100 million in losses this year. It will get much worse. Wall Street equity markets took a look and gave a resounding "no thanks." Ride quickly while it is still in operation. Unfortunately, we will be reading about this in bankruptcy court.

Exactly!

Air travel is more convenient but railroads must receive federal and state subsidies. Why, because during the four days following the destruction of the twin towers not a single commercial aircraft flew. Every pilot on US commercial aircraft were told to land at the nearest airport. Only military aircraft and a few select airplanes were permitted to operate for those four days. War materials can not be safely transported by truck and most truck drivers will not operate their vehicles at all. Railroads are our insurance in time of an emergency. We must maintain our rail system during peacetime or suffer the consequences of not being able to adequately defend our homeland during a crisis.

Only a 2.5% "increase"?... Just wait until you see the "losses"...(They're coming: ; That's historically INEVITABLE with "commuter trains" all around America..! ) Got "leftover" tax money to LOSE..?.. THROW IT AT A COMMUTER PASSENGER TRAIN.... (OR, "BET" it on President Trump for 2020, TO WIN !)

Until the U.S. has a fairly top-notch nationwide rail system such as that operating throughout Europe, existing rail will almost certainly require public subsidy. However, because of the huge number of tourists, retirees, snowbirds, and young people in the Miami-Orlando-Tampa corridor, this particular Virgin Trains route might ultimately break even. (?) Gotta give 'em credit for trying!

You still have to get to and from the train on both sides of the rail trip. In addition, the rail part of the trip has to make sense in terms of origin and destination as well as in departure and arrival times. In short, to be maximally successful it must support the needs, desires, and decisions of the individual to affordably travel when and where they want . At this point it does not, because it can't. When public transportation evolves to the point of servicing end-points via self-driving publicly owned vehicles, thus eliminating the need for vehicle ownership, then the last puzzle pieces will be in place to make public transportation fully reliable - including some rail portions.

Good thing it connects to airports, sun rail, tri-rail, buses, ubers, bikes, scooters, and your legs. Not much else outside the walkable environment around the stations anyways.

...and yet the empirical evidence shows that it is STILL far to inconvenient for the vast majority of travelers.

The transportation systems that will have the most success will be the ones that do the most to preserve the individual decision to travel from point A to point B at the time of their choosing.

Operating losses Who thought that would change ? Need a bigger hole. Keep laying more track. When you ‘discover’ adding explosive carrying freight cars to the passenger cars, running at high speed will cover the cost, what will the cost be ?

Add new comment

politics
advertisement
advertisement
advertisement
Live streaming of WBOB Talk Radio, a Sunshine State News Radio Partner.

advertisement
advertisement