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.
