Hopes Dim for Brightline

Ridership on Florida’s Brightline passenger trains has more than tripled since the company opened its extension to Orlando last September. However, that increase hasn’t been enough to cover costs, as the company reported losing $116 million in the first three months of 2024. This is more than double the $53 million it lost in the first quarter of 2023, indicating that expenses increased by nearly three times as much as revenues.

Brightline’s station at Orlando International Airport. Photo by elisfkc.

When the Orlando line opened, Brightline predicted that it would carry 7.0 million passengers in 2024. However, it has recently reduced that estimate to 5.5 million. One problem is that Brightline has had to turn away passengers in the “short-distance” Miami-West Palm Beach segment of its route in order to keep seats available for the “more profitable long-distance” travelers to or from Orlando. As of May, year-to-date revenue in the short-distance segment declined from $18.8 million in 2023 to $17.2 million in 2024.

While that’s only a small portion of the $116 million loss, it shows that Brightline has a capacity problem. While there are many vacant seats during off-peak times, the trains are filled during peak periods of the day. Brightline responded to this on June 1 by increasing fares for short-distance passengers by as much as 250 percent. However, this isn’t going to fill more seats in the off-peak trains.

This reveals one of the disadvantages of passenger rail: its inflexibility. Brightline trains consist of two locomotives pulling four passenger cars that are semi-permanently coupled together, meaning it is impractical to change train lengths in response to peak or off-peak demand. While Brightline had planned to buy seven-car trains for its Orlando service, it instead received more four-car trains with 20 extra cars expected to arrive in 2025. Longer trains means more wear-and-tear and energy costs, making it undesirable to run such trains during off-peak periods, but it will be difficult to schedule the longer trains only in peak periods and shorter ones only in off-peak periods.

A large part of the reason why Brightline is losing money is its high debt service. The company sold nearly $5 billion worth of bonds to finance the construction of its line to Orlando. It would like to refinance some of those bonds at lower interest rates, but the bonds have been given low BBB and BBB-minus ratings. That means the ratings companies expect the bonds to be “stable” so long as the economy is healthy but “subject to adverse business and economic conditions.” In other words, in a recession Brightline is likely to go bankrupt. The fact that it is losing tens of millions of dollars a month in a relatively healthy economy doesn’t help.

I once thought that Brightline had a lot of potential to make money by connecting south Florida’s cruise ship ports to Orlando’s theme parks. But the Brightline station in Miami is close to two miles from cruise ships while stations in Fort Lauderdale and Palm Beach are even further away from cruise ship ports. Brightline offers no shuttle service and only promises that “ rest and relaxation starts the moment you enter the station,” hinting that getting to the station may be stressful.

Meanwhile, its terminus in Orlando is at the airport, which is more than 16 miles to Disney World. Brightline’s original plans to run a train line all the way to Disney World were cancelled in 2022. While there are plenty of local shuttle services, the lack of a one-seat ride from cruise ships to Disney World or other theme parks greatly reduces the attractiveness of the train.

As a result, I don’t expect that either Brightline or Brightline West will ever be profitable. These companies were started by an investment firm that happens to be run by a rail fan whose predictions of profitability suffer from severe optimism bias.