Brightline Rail Service

If you aren't aware, the state of Florida has a passenger train service that runs between South Florida and Orlando called Brightline.  This is the only privately run passenger service in the nation (or at least that's what I've heard).  

The issue at hand is that they are claiming that they are losing money .... and may declare bankruptcy. 

But I wanted to dig into that a little.  Let's start with a short (and pretty superficial) history lesson.  The company running the service is a direct descendant of Henry Flagler's Railroad (if you don't recall that story, he was a tycoon that was attempting to remake Florida to his liking in the early 20th century, and secured land to build a railroad to allow for the export of goods that he could profit from, and bring wealthy tourists into the state for holidays, as well).  

At some point, that rail service became Florida East Coast railway. It only provided for the movement of goods (but not passengers) in and out of Florida, and primarily went from Jacksonville to Miami. 

The company has had various ownership, and has had investors.  They've also setup various subsidiaries, one of which is the Florida East Coast Industries, which they tell you is not part of the bigger FEC. Whatever that means.

At some point during the Obama administration, there was a move to provide federal funds for passenger rail service around the country.  There was a consortium that applied for money to run a train service between Miami and Orlando, with a desire to expand that later to more of the state.  The administration approved it, but the state said "no thanks" because of politics.  

The FECI stepped forward and said they would privately fund it.  Their stated goal was to be able to make the trip in under 3 hours (it takes 4 by car), and be competitive with airline pricing.  Business people could benefit.  It would run between the airports, so you have to park somewhere, take the train, and then somehow get from the airport to your destination (rental car, uber, maybe bus?) so your all-in price is higher - but it would be if you flew, also.

The thing is that the FEC already owns the right of way and the tracks.  So, in principle this would be a lower-cost option.  They essentially piggy-backed off of the original plan, and started building.  They used their own money, and built a passenger service that just ran in the South Florida corridor.  That, in turn, raised more capital.  

I should note that at one point, Brightline had a partnership with Richard Branson's "Virgin" name, which provided some capital.  But that relationship went south, and ended in lawsuits.

And, oh, by the way, there was already a passenger service in the same corridor that was funded by the counties, with some money from the state. So in a way, this new service made no sense.  But it did run on different tracks, which the company controlled! 

Now, here's where the bankruptcy aspect comes in.  And mind you, this is mostly my speculation. 

One problem is that they changed ownership and took private equity money, which always looks for a return on their investment.  

And so now, it appears that they want some government subsidies.  By claiming they're losing money, it sets up this weird showdown.  They've already laid tracks and have the trains.  And they have ridership... the threat is that it would be a shame if they ceased operation wouldn't it?  

Assuming this is true, welcome to the 21st century version of capitalism.  Which is right on brand for what Flagler was doing.