PB Post: Brightline passenger counts increase, still remain well below projections
Posted on September 28, 2018
By: Jeff Ostrowski, Palm Beach Post
Brightline’s ridership increased in the second quarter of 2018, but passenger counts and revenue remained well below the private rail service’s projections.
In a bond document released Friday, Brightline said its passenger count totaled 106,090 in April, May and June, up from 74,780 during the first three months of the year.
Total ridership for the first half of the year was 180,870, just 16 percent of the 1.1 million passengers Brightline told investors in December that it expected for the full year of 2018.
“They are lower than anticipated," said Stacey Mawson, director at Fitch Ratings, the only agency to issue a grade for Brightline’s $600 million bond issue. "But on the bright side, the trends do seem strong.”
In one caveat, Brightline’s projection of 1.1 million passengers was based on the service launching in late 2017. Brightline started carrying passenger in January, and Brightline didn’t ramp up its full schedule until early August, when its daily service went from 11 round trips to 16 round trips between West Palm Beach and Miami.
Fare revenue increased to $1.54 million in the second quarter, up from $663,667 in the first quarter. Brightline’s revenue for the first half totaled $2.2 million, just 9 percent of the $23.9 million in revenue it predicted for 2018.
Brightline, the first for-profit rail service to operate in the United States in decades, launched service between West Palm Beach and Fort Lauderdale in January. Service to Miami opened in May.
“As we continue to ramp up our operations, we expect the growth in number of passengers carried and revenue generated in the quarter ending in September to meet or exceed our second-quarter growth rates,” Brightline said in its bond document.
Brightline didn’t say how price increases and charging for parking might have affected its ridership. While the service offered discounted rates and free parking for months after its launch, the introductory bargains are mostly gone now.
The private rail service reported a net loss of $28.3 million for the second quarter, compared to a loss of $28.2 million in the first quarter.
Brightline reports its financial results because it sold bonds worth $600 million to investors in late 2017 to finance its service between West Palm Beach and Miami. Fitch rates the bonds BB-, a junk-bond grade that reflects “an elevated vulnerability to default risk.”
The sheer novelty of a for-profit train service makes Brightline difficult to handicap, Mawson said.
"It’s just a completely new asset with real uncertainty around demand, willingness to pay, price level,” Mawson said.
Others take a more pessimistic view of Brightline's prospects…