Brightline Trains Florida discussion 2023 Q4

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I'm adding an analysis of Brightline's (probable) financial performance for Q4. Obviously we do not have financial results for December yet (if I had those, I'd probably have a lot more information on other stuff than I do now...), but I'm comfortable extrapolating the third month on the basis of the first two and then adjusting. I'm simply going to bump December up by 10% in terms of ridership and ticket revenue from November - there's an extra day (so, +3% by default) and the holidays, but also no Polar Express-type stuff.
Code:
October - Actual
2023    October SD   126,059     3.1         $3,092,227    $24.59    $24.53
2023    October LD    79,686     7.3         $7,314,378    $91.61    $91.79
2023    October  TOT 205,745    10.4        $10,406,582    $50.55    $50.58   12.8     $62.21


November - Actual
2023    November SD  112,423     2.9         $2,915,128    $25.79    $25.93
2023    November LD   93,184     8.4         $8,360,468    $90.14    $89.72
2023    November TOT 205,607    11.3        $11,275,488    $54.96    $54.84   13.9     $67.60

December - Estimate
2023    December SD  123,665     3.2         $3,206,641    $25.79    $25.93
2023    December LD  102,502     9.2         $9,196,515    $90.14    $89.72
2023    December TOT 226,167    12.4        $12,403,155    $54.96    $54.84   15.3     $67.60

Q4 Combined - Estimate
2023    Q4       SD  362,147     9.2         $9,213,996    $25.44
2023    Q4       LD  275,372    24.9        $24,871,361    $90.32
2023    Q4       TOT 637,519    34.1        $34,085,357    $53.47             42.0     $65.88

Q4 Combined - Brightline Filing
2023    Q4       SD  580,000    17.0        $16,889,600              $29.12
2023    Q4       LD  330,000    36.0        $36,098,700             $109.39
2023    Q4       TOT 920,000    53.0        $53,479,600              $58.13   64.0     $69.57
                     Filing     Filing      Derived                 Filing    Filing   Derived

Operating expenses are indicated at $46m in the filing, and the filing indicates another $7m in ongoing capex, for total costs of $53m.
These results put Brightline in the red for Q4, but "only" by $4m vs operating expenses or $11m vs operating expenses plus capex. Obviously, this isn't enough to allow for debt service, but I'm willing to be optimistic that adding another car, if it allowed a 20% bump in ridership and revenue (so, $40.7m in ticket revenue/$50.4m in total revenue - I'm presuming no impact on load factors or traffic distribution, which is obviously not going to be the situation but I also can't really model things any more closely on the fly) would cover operating costs and the other cars would put them over the top on both fronts (add $6.8m in ticket revenue/$8.4m in total revenue for each car added to the sets, so $47.5m/$58.8m in revenue at six cars and $56.3m/$67.2m in revenue at seven cars).

Some other simple math: Each of those levels would annualize out (i.e. multipliy by four) to something like this:
Four cars: $136.4m ticket/$168.0m total
Five cars: $162.8m ticket/$201.6m total
Six cars: $190.0m ticket/$235.2m total
Seven cars: $225.2m ticket/$268.8m total
Versus expected costs for 2024, operating expenses are $220m and ongoing capital expenses are another $26-27m (so, $246-247m). That would put the line in the black on an operating+capex basis by about $20m/yr. Unfortunately, Brightline's debt service requirements are $263m/yr (albeit offset by a funding release in the first 2-3 years).

So, I reiterate my earlier view that barring a major change, Brightline is likely to have to reorganize its debts. Of course, there may be a path to those changes...it's just not clear from the ongoing ridership/revenue situation. I do expect the gap to close significantly over time, by the way - the commuter service will add track access fees IIRC, and there will also be other ancillary revenue from station food sales (though the impact on overall ridership and ticket sales is unpredictable and I'm still not buying that it won't have unanticipated impacts), and ticket prices should be able to rise a bit while the debt pile remains mostly static for the first few years (and as long as ticket prices can rise in line with or faster than expenses, that will help as well).

Edit: If I simply multiply the Q4 operating expenses by 4, that's $184m. Adding in 4x the capex gets you another $28m. That'd bring the overall costs down to $212m or so, providing a bit more headroom (about $57m in operating profits per year at seven cars). That's still nowhere near the projected need of $263m, but it's at least closer.
 
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Anderson: Can we suppose that the Capex is mainly progress payments for the additional train cars to be delivered? Do you know of any Capex ongoing with the present operation? The Tampa extension might have some ongoing CAPEX?
Anyone know a date for Siemens to deliver more cars?
 
Anderson: Can we suppose that the Capex is mainly progress payments for the additional train cars to be delivered? Do you know of any Capex ongoing with the present operation? The Tampa extension might have some ongoing CAPEX?
Anyone know a date for Siemens to deliver more cars?
(1) There are three lines ("Rolling Stock Maintenance Capex", "Infra Maintenance Capex", and "Station Maintenance Capex"). I presume it basically means "replacing things that go on the depreciation tables", but I can't help but feel like the stuff was made up...
(2) I'd heard "first half of 2024", "second half of 2024", and "first half of 2025" for delivery dates for sets of 10 cars.
 
Maybe there is something i don't understand, but isn't maintenance an opex by definition. Isn't capex a one time investment? So maintenance capex makes no sense, unless "maintenance capex" mean capex for machines, tools or facilities to be used for maintenance.

As far as ongoing capex on the present line is concerned, aren't there still a number of bridges they are still working on? Or is that all complete now?
 
Maybe there is something i don't understand, but isn't maintenance an opex by definition. Isn't capex a one time investment? So maintenance capex makes no sense, unless "maintenance capex" mean capex for machines, tools or facilities to be used for maintenance.

As far as ongoing capex on the present line is concerned, aren't there still a number of bridges they are still working on? Or is that all complete now?
Actually the automatic classification of all maintenance costs as opex is a myth. Typically longer cycle costs such as some permanent way maintenance costs which according to accounting classification add to the capital value of the asset over a longer period, and can be depreciated, can be classified as capex. As far as the accounting folks are concerned if a maintenance activity adds long term value to the asset that can be depreciated, it can go to the capex side of the account. As for what Brightline is classifying thusly, I don't know.

This classification of certain maintenance cost items for the NEC has been a long running bone of contention. If you can classify enough costs as capex it becomes easier to show the above the rails account to be positive. At the end of the the day if you can convince the Auditors that it is a capex consistent with GAAP, it is a capex I suppose.

Incidentally, much to my surprise I discovered that Brightline's code for its Orlando station is ORL, so if one must use a code for Brightline's Orlando station, one should use ORL. MCO is the airline code for Orlando International Airport.

Personally, I would have preferred if they chose something other than Amtrak's ORL code for the Amtrak station at Orlando Health. When Sunrail rolls into the Airport station I wonder what code they will use.

Then again they also use MIA for Miami Central too.
 
This classification of certain maintenance cost items for the NEC has been a long running bone of contention. If you can classify enough costs as capex it becomes easier to show the above the rails account to be positive. At the end of the the day if you can convince the Auditors that it is a capex consistent with GAAP, it is a capex I suppose.
This is ironic as many private corporations try very hard to appear to be making a loss when in fact they are making a profit, and are finding lots of loopholes to depreciate things that you might logically think cannot be depreciated. Profitable private companies need to convince the taxman that there is no profit, whereas unprofitable Amtrak tries to convince Congress that there are islands of profitability.

If work is done on a line that, say, permits the speed to be raised, that is clearly not maintenance but an upgrade, and it seems fair to me that it can be depreciated. Likewise when it comes to once in a generation interventions such as heavy repairs on bridges etc, even if the repairs provide no operational advantage. But I struggle to accept that regular routine interventions can be classified as capex.
 
Incidentally, much to my surprise I discovered that Brightline's code for its Orlando station is ORL, so if one must use a code for Brightline's Orlando station, one should use ORL. MCO is the airline code for Orlando International Airport.

Personally, I would have preferred if they chose something other than Amtrak's ORL code for the Amtrak station at Orlando Health. When Sunrail rolls into the Airport station I wonder what code they will use.

Then again they also use MIA for Miami Central too.
Do they interoperate with IATA or ICAO? I know Berlin HbF train station (with no obvious helipad on Google Maps) has the IATA code "QPP" basically so Lufthansa can sell you an extremely low-altitude "flight" there, and I think some US train stations have also had IATA codes for similar reasons.
 
If work is done on a line that, say, permits the speed to be raised, that is clearly not maintenance but an upgrade, and it seems fair to me that it can be depreciated. Likewise when it comes to once in a generation interventions such as heavy repairs on bridges etc, even if the repairs provide no operational advantage. But I struggle to accept that regular routine interventions can be classified as capex.
It boils down to what the tax man thinks is regular and routine or not. For example under cutting tracks is done once every ten to fifteen years or so. Amtrak counts that as capex as do most railroads. Whereas regular track tamping and alignment which is much more frequent is considered opex. It is whatever is the accepted practice on a case by case basis, and one just has to know what the local accepted practice is.
Do they interoperate with IATA or ICAO? I know Berlin HbF train station (with no obvious helipad on Google Maps) has the IATA code "QPP" basically so Lufthansa can sell you an extremely low-altitude "flight" there, and I think some US train stations have also had IATA codes for similar reasons.
No they don't. For Amtrak stations that have IATA codes, the IATA codes are often very different from the Amtrak code, except for collocated stations, e.g. EWR, BWI, where the codes match. OTOH, New York Penn Station has the IATA code ZYP, for example, not NYP.
 
No they don't. For Amtrak stations that have IATA codes, the IATA codes are often very different from the Amtrak code, except for collocated stations, e.g. EWR, BWI, where the codes match. OTOH, New York Penn Station has the IATA code ZYP, for example, not NYP.
I'm inclined towards using MCO so as to distinguish vs Amtrak's ORL (since the station is colocated).

FWIW I suspect that eventually Brightline will end up with an interline agreement with somebody (my money is on the foreign carriers first; branding aside, getting an interline deal with Virgin Atlantic made the whole deal with Branson make a lot of sense to me).
 
I'm inclined towards using MCO so as to distinguish vs Amtrak's ORL (since the station is colocated).

FWIW I suspect that eventually Brightline will end up with an interline agreement with somebody (my money is on the foreign carriers first; branding aside, getting an interline deal with Virgin Atlantic made the whole deal with Branson make a lot of sense to me).
They did tell STB though that they will do no such thing in order to get STB out of their hair. I wonder if they changed that in a filing with the STB, or were about to do it to enter into interline agreements with the Virgin empire before the whole thing folded and all the grody flashy Red went back to pleasant Yellow at their Miami station.
 
They did tell STB though that they will do no such thing in order to get STB out of their hair. I wonder if they changed that in a filing with the STB, or were about to do it to enter into interline agreements with the Virgin empire before the whole thing folded and all the grody flashy Red went back to pleasant Yellow at their Miami station.
What was STB's objection?
 
Incidentally, much to my surprise I discovered that Brightline's code for its Orlando station is ORL, so if one must use a code for Brightline's Orlando station, one should use ORL. MCO is the airline code for Orlando International Airport.

Personally, I would have preferred if they chose something other than Amtrak's ORL code for the Amtrak station at Orlando Health. When Sunrail rolls into the Airport station I wonder what code they will use.

Then again they also use MIA for Miami Central too.
MCO is called OIA by many people, and I think as a business. Both ORL and MIA are poor naming decisions by Brightline, obviously driven by marketing.

FWIW I suspect that eventually Brightline will end up with an interline agreement with somebody (my money is on the foreign carriers first; branding aside, getting an interline deal with Virgin Atlantic made the whole deal with Branson make a lot of sense to me).
It's owned by Mubadala, sovereign wealth fund with many investments. No airlines, apparently, but it owns an airliner leasing company and is invested in other transportation stuff.
 
FWIW I suspect that eventually Brightline will end up with an interline agreement with somebody (my money is on the foreign carriers first; branding aside, getting an interline deal with Virgin Atlantic made the whole deal with Branson make a lot of sense to me).
I fear that most airlines care very little about trains, and aligning with train companies seems to be very low on their agenda. Even when at the end of the day they are owned by the same people.

In the UK, in all the years that Virgin Atlantic and Virgin UK co-existed, I never saw or heard of any attempts to create synergies or offer thru ticketing or anything like that.
 
I fear that most airlines care very little about trains, and aligning with train companies seems to be very low on their agenda. Even when at the end of the day they are owned by the same people.

In the UK, in all the years that Virgin Atlantic and Virgin UK co-existed, I never saw or heard of any attempts to create synergies or offer thru ticketing or anything like that.
To counter, in the US I think that there are two cases of a co-located airport+intercity train station. One is Newark, the other is Orlando.

[There are a few cases where the lack of a co-located station is questionable (Richmond, VA; DCA; CLT; MSY*; FLL**) and a few with smooth links (PHL; arguably SEA, MSP, DFW, and DEN; and possibly JFK, though having to buy two tickets for that is a PITA) but EWR and MCO are the only ones I know of where you don't need more than a people mover connection.]

*MSY was more confusing before they moved the terminal. Even now, though, it'd be a reasonable add given the rental car facility being over there.
**Brightline gets a partial bye here because they're relatively new.
 
To counter, in the US I think that there are two cases of a co-located airport+intercity train station. One is Newark, the other is Orlando.

[There are a few cases where the lack of a co-located station is questionable (Richmond, VA; DCA; CLT; MSY*; FLL**) and a few with smooth links (PHL; arguably SEA, MSP, DFW, and DEN; and possibly JFK, though having to buy two tickets for that is a PITA) but EWR and MCO are the only ones I know of where you don't need more than a people mover connection.]

*MSY was more confusing before they moved the terminal. Even now, though, it'd be a reasonable add given the rental car facility being over there.
**Brightline gets a partial bye here because they're relatively new.
All true. But to me it seems these are examples of airport authorities recognizing the value of rail connections. Not airlines. Even where some formal cooperation agreement exists this is often poorly promoted and little known to the public at large.
 
To counter, in the US I think that there are two cases of a co-located airport+intercity train station. One is Newark, the other is Orlando.

[There are a few cases where the lack of a co-located station is questionable (Richmond, VA; DCA; CLT; MSY*; FLL**) and a few with smooth links (PHL; arguably SEA, MSP, DFW, and DEN; and possibly JFK, though having to buy two tickets for that is a PITA) but EWR and MCO are the only ones I know of where you don't need more than a people mover connection.]

*MSY was more confusing before they moved the terminal. Even now, though, it'd be a reasonable add given the rental car facility being over there.
**Brightline gets a partial bye here because they're relatively new.

BWI probably has the highest Amtrak to airline transfers even though there is no through ticket. Afterall the Shuttle Bus connection is not particularly worse than the EWR AirTrain connection and is probably more reliable.

At present I am not sure there is a huge need for a train to air transfer at MCO. Afterall the only places that you can connect from pretty much each have their own thriving airports. So the incentive for first spending 2-3 hours on a trains is not high at all. Really the target audience of the OIA station is more Mickey Mouse and its cohorts than air flights.
 
To counter, in the US I think that there are two cases of a co-located airport+intercity train station. One is Newark, the other is Orlando.

[There are a few cases where the lack of a co-located station is questionable (Richmond, VA; DCA; CLT; MSY*; FLL**) and a few with smooth links (PHL; arguably SEA, MSP, DFW, and DEN; and possibly JFK, though having to buy two tickets for that is a PITA) but EWR and MCO are the only ones I know of where you don't need more than a people mover connection.]

*MSY was more confusing before they moved the terminal. Even now, though, it'd be a reasonable add given the rental car facility being over there.
**Brightline gets a partial bye here because they're relatively new.
MIA has the Tri-Rail commuter service (serves Miami-Dade, Broward, and Palm Beach with way more stations and a few miles West of Brightline) an APM ride away from the air terminals, and it probably should have Amtrak (lol.)

FLL is going through a big reconstruction soon and last I saw they were going to build stuff right over the Brightline tracks but not a train station.
 
MIA has the Tri-Rail commuter service (serves Miami-Dade, Broward, and Palm Beach with way more stations and a few miles West of Brightline) an APM ride away from the air terminals, and it probably should have Amtrak (lol.)

FLL is going through a big reconstruction soon and last I saw they were going to build stuff right over the Brightline tracks but not a train station.
There will be a station for the Miami Northeast Corridor Tri-Rail service at Fort Lauderdale Airport. It is there in the EIS for the Broward County part of it. As for whether Brightline wil or will not stop there will depend on whether Brightline decides to spring for a high level platform with their secure area and all that.

It is rumored that Miami Intermodal Center will have Amtrak service any day now (meaning it could be a few weeks to a few more years) as soon as Amtrak manages to stop dragging its feet providing a list of things to do one item at a time to FDOT :)
 
BWI probably has the highest Amtrak to airline transfers even though there is no through ticket. Afterall the Shuttle Bus connection is not particularly worse than the EWR AirTrain connection and is probably more reliable.

At present I am not sure there is a huge need for a train to air transfer at MCO. Afterall the only places that you can connect from pretty much each have their own thriving airports. So the incentive for first spending 2-3 hours on a trains is not high at all. Really the target audience of the OIA station is more Mickey Mouse and its cohorts than air flights.
Yes and no. Insofar as MIA also has a major international airport (and MIA-MCO is a high-frequency city pair for AA), I agree. However, FLL is a lot more constrained and PBI is primarily domestic, and neither have service to MCO.

Also, Brightline is pretty explicitly going after a connecting market...they've essentially stated a HOBNAT policy for connecting air pax (though it's apparently still a bit...buggy...in practice).

There will be a station for the Miami Northeast Corridor Tri-Rail service at Fort Lauderdale Airport. It is there in the EIS for the Broward County part of it. As for whether Brightline wil or will not stop there will depend on whether Brightline decides to spring for a high level platform with their secure area and all that.

It is rumored that Miami Intermodal Center will have Amtrak service any day now (meaning it could be a few weeks to a few more years) as soon as Amtrak manages to stop dragging its feet providing a list of things to do one item at a time to FDOT :)
I suspect that Brightline would spring for the FLL (airport) station. Even if they literally just have trains that can't stop at Boca make that stop (so all trains have identical endpoint runtimes), that's still a non-zero consideration.
 
Yes and no. Insofar as MIA also has a major international airport (and MIA-MCO is a high-frequency city pair for AA), I agree. However, FLL is a lot more constrained and PBI is primarily domestic, and neither have service to MCO.
FLL has air service to MCO. FlightAware shows nine going from FLL to MCO today, on four different airlines. PBI doesn't, but I did fly from TPA to PBI and back in 2008, and I can see Southwest messing around and flying MCO-PBI again just as an experiment.
It is rumored that Miami Intermodal Center will have Amtrak service any day now (meaning it could be a few weeks to a few more years) as soon as Amtrak manages to stop dragging its feet providing a list of things to do one item at a time to FDOT :)
I'll believe it as soon as someone here posts a trip report, haha.
 
To counter, in the US I think that there are two cases of a co-located airport+intercity train station. One is Newark, the other is Orlando.

[There are a few cases where the lack of a co-located station is questionable (Richmond, VA; DCA; CLT; MSY*; FLL**) and a few with smooth links (PHL; arguably SEA, MSP, DFW, and DEN; and possibly JFK, though having to buy two tickets for that is a PITA) but EWR and MCO are the only ones I know of where you don't need more than a people mover connection.]
At BWI you have a bus connection, and it's free. And Milwaukee has a stop on the Hiawatha route. And what about Burbank?
 
To counter, in the US I think that there are two cases of a co-located airport+intercity train station. One is Newark, the other is Orlando.

[There are a few cases where the lack of a co-located station is questionable (Richmond, VA; DCA; CLT; MSY*; FLL**) and a few with smooth links (PHL; arguably SEA, MSP, DFW, and DEN; and possibly JFK, though having to buy two tickets for that is a PITA) but EWR and MCO are the only ones I know of where you don't need more than a people mover connection.]

*MSY was more confusing before they moved the terminal. Even now, though, it'd be a reasonable add given the rental car facility being over there.
**Brightline gets a partial bye here because they're relatively new.
There is also PVD (TF Green Airport) which is not served by Amtrak (yet) but is served by MBTA although only on weekdays (which is dumb :( )
 
At BWI you have a bus connection, and it's free. And Milwaukee has a stop on the Hiawatha route. And what about Burbank?
I legitimately forgot about Burbank (trivia point: It's one of several Amtrak stations on a SimCity map. The others are/should be NYP [Manhattan; NYG isn't depicted], PDX [Portland], TWO [Toronto prebuilt map, no scenario], SJC ["Silicon Valley"], CHI [Chicago], WAS [Washington], and LAS [Las Vegas - the station was still active when the map was made].), but I forget what the layout is for MKE. I think that's another bus connection.

[PVD, as indicated, isn't a connection to Amtrak.]
 
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