Virgin Trains USA Says Florida Rail to Stay Shut for Months
The train service, initially known as Brightline, is one of the nation's most ambitious transportation projects and is the first privately owned intercity passenger railroad to be built in the U.S. in over a century.
May 21, 2020 at 11:13 AM
3 minute read
Virgin Trains USA said it won't restart its fledgling railroad service in Florida for months, even as the state begins reopening and mass transit reemerges from the coronavirus shutdown in other parts of the country.
The company, which is backed by private-equity firm Fortress Investment Group and billionaire Richard Branson, suspended its Miami-to-West Palm Beach service in March, shortly before Florida's stay-home order.
"We do not anticipate resuming operating in the coming months," the company said in a statement.
"It is expected to take a long period of time for service demand to return to pre-virus levels," the company said, citing social distancing guidelines from the Centers for Disease Control and Prevention and work-from-home policies at many U.S. firms.
Amtrak has said it will restore Acela service on the Northeast Corridor starting on June 1. In Florida, Republican Gov. Ron DeSantis has started to reopen the economy, allowing retailers and restaurants to operate at 50% indoor capacity, starting this week.
The train service, initially known as Brightline, is one of the nation's most ambitious transportation projects and is the first privately owned intercity passenger railroad to be built in the U.S. in over a century. It is being financed in part with municipal bonds issued through a Florida government agency.
In its statement Wednesday, Virgin Trains USA said it was focused on construction to Orlando and the development of new stations in Boca Raton, Aventura and PortMiami, the world's largest cruise passenger port.
Even before the coronavirus, its ridership had been off to a slower-than-projected start.
But it's counting on service to the Orlando tourism hub, home of Walt Disney World, to drive future profit. It's also planning a high-speed train between Apple Valley, California, and Las Vegas.
In a regulatory filing later Wednesday, the company said it has "access to ample operating liquidity to withstand a protracted slowdown." It's also anticipating that it will figure into Florida's economic development plans.
"We are actively working with public entities that have an interest in leveraging our infrastructure in the expected stimulus program if one is established," it said in the filing. "We believe labor‐intensive, shovel‐ready projects in Florida will be attractive candidates to help restart the economy."
Jonathan Levin reports for Bloomberg News.
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