Trains, Tickets and Transit: Brightline in the Sunshine Economy

Mar 28, 2017

Brightline hasn't picked up a train passenger yet or even announced what fares will be when it does, but its former boss says the passenger train service won't lose money during its first full year in operation. 

 

Mike Reininger is executive director of Brightline's parent company Florida East Coast Industries. Until earlier this month he was the CEO of All Aboard Florida, which will operate Brightline.

 

"We expect that we will be break even or profitable in 2018," he told WLRN's Sunshine Economy.

 

The privately funding passenger trains are expected to begin running between new stations near the downtowns of Ft. Lauderdale and West Palm Beach in July. Trains will come to downtown Miami in August.

 

Trains going north and then west to Orlando International Airport have been delayed up to 30 months, according to Reininger.

 

FARES

Brightline is not talking about passenger fares yet. It plans on releasing it's inaugural fare schedule when it releases its ticket-buying app. The closest Reininger would get to talking specifics about fares was this exchange:

 

WLRN: The IRS reimburses mileage at 53.5 cents per mile. Between Miami and Fort Lauderdale, round trip, that's about $15.

Reininger: And in that general neighborhood is an important clue as to where we're going to be (with fares).

 

Brightline's Miami Central Station development includes a 12 story office building and two residential towers with 400 apartments each.
Credit Tom Hudson

  RIDERSHIP

 

Brightline's optimism to be break-even or turn a profit in 2018 is based in part on it's expectation for carrying almost 3 million riders.

 

"If we get to 3 million riders with the fare structure that we expect we are going to have a very robust business that will have ample opportunity to expand throughout the state," said Reininger.

 

Public transit, this is not. It is privately financed and will be privately run by a for-profit company that is part of a publicly traded investment management firm, Fortress Investment Group. Public transit usually denotes some form of government management.

 

"Our business is really optimized around revenue and expenses as opposed to ridership," said Reininger.

 

 

 

 

OPPOSITION

The second phase of Brightline’s plans -- West Palm Beach to Orlando -- is where the opposition has been concentrated.

 

Treasure Coast lawmakers introduced legislation that would require additional state regulations for the type of high speed train service Brightline wants to operate through their communities. Brightline argues that much of the proposed state legislation duplicates federal rules which it already follows.

 

Among the new requirements of the legislation would be for high speed rail operators to build fences around their tracks.

 

Read more: The House proposal was pulled from today's agenda of the Transportation and Infrastructure Subcommittee.

 

The Senate version of the legislation was approved by the Florida Senate Transportation Committee. It next goes to the Senate Community Affairs Committee.

The Treasure Coast counties of Martin and Indian River have sued over the federal government’s handling of environmental impact studies as part of the okay to allow Brightline to issue $1.75 billion of private activity bonds if it decides to.

While Brightline won’t say how this opposition has delayed its service to Orlando, the original estimated schedule was for it to begin in 2019. The company isn’t committing to a schedule to connecting with Orlando, but Reininger said, "We are fully committed to this."

PARENT COMPANY ACTION

On Tuesday, the largest rail fleet company in Mexico, Grupo Mexico, announced it was buying Florida East Coast Railway and it's 351 miles of tracks for $2.1 billion. Brightline is owned by Florida East Coast Industries, a separate entity from the railway company, though the two share the same corporate parent, Fortress Investment Group. 

 

"Brightline is a separate company that has dual ownership of the corridor and the right to operate passenger service. We have all shared operations-related agreements in place with the Florida East Coast Railway for us to fully build out and implement our passenger rail system," said Brightline in a statement.

 

The sale of the railway business by Fortress to Grupo Mexico still needs regulatory approval.