MIAMI — Brightline last week deferred interest payments on private activity bonds after initially indicating it would draw from financial reserves to make the payments.
The company’s just-issued December revenue and ridership report says it elected to defer interest payments on debt due Jan. 15 on 11 bonds issued by the Florida Development Finance Corp., saying this is “permitted under the All Aboard Florida Operations Holdings bond documents.” This was the second deferral of interest after a payment was deferred last July on the same bonds. Default doesn’t occur unless three interest payments are deferred.
The day before the interest was due, Brightline had said in a filing with the FDFC that it would use a portion of its “debt service reserve” to make the payments.
The company also executed an amendment to $985 million in bonds from last year [see “Brightline remarkets $985 million …,” Trains.com, Aug 13, 2025], removing the requirement that it make interest payments in cash. This could pave the way for its pursuit of “a substantial amount of equity, the proceeds of which would be used to repay principal and interest debt of ours and to increase cash reserves.”
In a paywalled article, Bloomberg reports the company also has $1.1 billion of corporate notes that have an interest payment due Jan. 31.
After the deferred payment was revealed, the Fitch bond rating service on Friday downgraded Brightline’s debt, explaining why in an extensive analysis. This followed a bond downgrade by Standard & Poor’s in December [see “Brightline confronts cash crunch …,” Jan. 12, 2026].
These events follow the announcement, also last week, that the company has tapped former Eurostar CEO Nicholas Petrovic to become Brightline’s chief executive. [See “Brightline hires …,” Trains.com, Jan. 14, 2026].
Meanwhile, Brightline’s December report shows continued trends from November, confirming that additional premium capacity on fewer long-distance trains registered gains of 25% in both ridership and revenue. Miami-Orlando Smart class passenger counts were off slightly with fewer departures, but revenue was up 9%. Additional Miami-West Palm Beach frequencies netted a 23% increase ridership to a level not seen since 2023.
The company reports that its Brightline Rewards program has more than 515,000 members. It still has work to do in attracting out-of-state visitors; Florida residents represent 82% of the ridership total.
— To report news or errors, contact trainsnewswire@firecrown.com.
In order to attract out of state customers, step 1 is to offer some kind of refundable fare. Currently all Brightline fares are credit only. How does that help someone who doesn’t live in Florida; it’s not like they can use it at their local Brightline!
There is a way to make a profit in passenger rail. But not in the United States in the current political climate. Hong Kong’s subway turns a profit, for god’s sake. Some of Japan’s passenger rail systems turn a profit. Private operators on Spain’s high speed network (run by SNCF and FS) presumably turn a profit or they would not exist.
But Brightline was NEVER about turning a profit with the trains. It’s always been about real estate. Henry Flagler would be proud.
And ultimately profit isn’t the point. Moving people efficiently and lowering carbon emissions is the point.
Pointing to profitable Japanese or Hong Kong rail systems is in a way the exception that proves the rule when it comes to running enough trains to make money. My statement is a simplification of the idea that while a given passenger train may carry enough passengers to pay its direct operational costs, it is much harder for a passenger system to carry enough passengers to pay its overhead and capital costs. It can be a limit in supply as Charles mentions, but often it is a limit on demand – there just isn’t enough people that are willing and able to ride the train.
Having ridden on several Japanese passenger trains, some lines see a volume of passengers on a daily basis is absolutely astounding and something that you will see in only a few places in the world. But, even in Japan passenger rail systems struggle to cover capital costs outside the Tokyo to Osaka corridor. Many make their money on real estate or other sources of income. The profitable systems you mention really only manage to cover their capital costs because they operate in the largest areas of dense population on the planet.
As for passenger rail not making a profit it would be ditto for Hwys & aviation if not for all the taxpayer subsidies. The HTF has been in the red for nearly two decades siphoning the $100’s of Billions in shortfalls from the Treasury. No profits there only higher deficits, yet hwy interests continue to push for additional building & expanding of roads contrary to changing travel & demographic patterns. As for aviation if the airlines had to pay the full cost of air traffic control, TSA & now $32 BILLION for the new air traffic control system tickets would cost immensely more than they currently do now & what few airlines survived would be looking for a bailout.
Brightline was always a real estate project. I doubt Brightline owns any of the hot real estate after it was spun off from FEC. Florida taxpayers are going to eat a s*sandwich. Probably part of the plan.
Charles, the capacity constraints are features intentionally built-in and not bugs or oversights. Cuomo, to great fanfare and ribbon cutting put up several new stations in upstate New York. Every one of them are single platforms on mainline track. Both Syracuse and Rochester have adjacent 80-100 year old bridge works that should have been replaced. Buffalo Exchange Street sits below a freeway on a single track branch. These facilities do not allow for any growth.
These constraints were an intentional design feature, to insure that there is no operational flexibility to accommodate additional passenger service. It goes without saying that 1960s era train speeds are impossible with 12,000 ft freights on railroads lacking sidings or stretches of double track.
In 1969, Penn Central ran 7.5 hour Buffalo-GCT trains that had an engine change and backing move in Albany, both of which no longer exist. I rode the UA Turbo on a demonstration run and there were hopes for 6 hour service. 56 years later, Empire Service trains now takes 35-60 minutes longer. NYS DOT now says it will be 2045 and many billions to get “higher speed rail”. Siemens equipment to replace Amfleet and P32s are 7 years off!
This is entirely intentional and planned. Deliberately constraining capacity and running 35-50 yo equipment insures rail remains a last choice for passengers. Constraining capacity insures captive freight customers have no choices and pay monopoly rates and maintain the 40% operating margins.
Endless money for Forever Wars (r), tax cuts, corporate welfare. None for meaningful first world railroads.
Very well written and sadly all very true Mr. Spindler.
You can make money off a passenger train, but you can’t run enough passenger trains to make money. Not my quote, but I have generally found it to be true.
Interesting point Peter. Especially in countries with heavy freight traffic on the rails (I’m thinking USA and Canada) there’s only so much capacity for passenger trains. Also what rail advocates don’t take into account is that the terminal and yard capacity a vigorous passenger train network would require no longer exists. There’s two cities I am familiar with that have huge airports, but whose center-city passenger train terminals have restricted capacity. (1) Detroit Amtrak New Center. Great location, one platform. (2) Denver, most of the platform capacity at Union Station was given over to RTA.
Of course there’s more to passenger rail than downtown terminals and that is the strength of passenger rail. The Boston area has Route 128 Station (which goes back to New Haven days). The Detroit area has an important Amtrak station at Dearborn, serving populous suburbs like Dearborn and Livonia. Milwaukee has added the General Mitchell Airport Amtrak station which has little to do with aviation and a lot to do with being a south suburban (though within the Milwaukee city limits) park-ride for rail passengers.
Charles lets not forget the time consuming backup move now required at Denver Union Station for through trains.
(1) There’s no way to make a profit in passenger rail. Accept that passenger rail will run at a loss and that taxpayers will in every case make up the difference.
(2) Brightline is a private company but in part it’s publicly financed. Call it what it is.