Long security lines at airports in March helped boost Brightline ridership in March.
The private passenger train service between South Florida and Orlando reported a record number of passengers and record revenue last month, including its first single day hosting about 15,000 rides.
The company is still racing against time and its debt agreements to secure a more stable financial footing. It already has forged a deal with some of its bondholders giving it more time to pay interest that was due in mid-February and on April 15. It now has one more month to come up with that money.
Brightline has disclosed for months that it is “actively pursuing” a strategy to issue stock in order to raise cash to be pushed to pay down some of its more than $4 billion in debt. It may issue ownership stakes to lenders in exchange for cutting its debt load. It also has been talking with lenders about taking on more debt to help with the financial demands of operating its service. It expects existing lenders would have to okay any further IOUs.
READ MORE: Brightline's financial troubles are running ahead of schedule
While ridership increased by double digits in March, the average fare paid by passengers dropped. For months, analysts have been warning that Brightline has had difficulty raising both ridership and fares as passengers are more price sensitive than financial forecasts had suggested.
Rides between Brightline's five South Florida stations increased 20% in March from a year earlier. However, the average fare fell by 6%, down to $31.48. While March saw Brightline’s highest revenue day ever for its short haul service, the decline in average fares ate into its revenue gains. Short distance ticket revenue was up 13% for the month.
Rides between South Florida and Orlando jumped 21% thanks to the wait times at airport TSA checkpoints and spring break travel. A partial government shutdown meant TSA workers went weeks without a paycheck until President Donald Trump ordered the Department of Homeland Security to use emergency funds. DHS Secretary Markwayne Mullin on “Fox and Friends” Tuesday warned those emergency funds would run out early next month.
Despite the jump in long haul riders, Brightline saw its average long distance fare fall 5% to just over $78 for a one-way trip. Long distance revenue grew 15%.
Revenue from luggage fees, food and drinks were up, helping Brightline’s total revenue for the month increase by 14% to $23.6 million.
Brightline bonds have suffered a series of credit rating downgrades over the past 11 months. Analyst worries have grown over the company’s ability to grow its revenue fast enough to meet its debt obligations. Brightline has dipped into its financial reserve in past months to make bond interest payments, further increasing concerns about its financial position.
S&P Global predicted Brightline will have to restructure its debt by September.
