Entrepreneur Richard Branson arrives on a Virgin Train in Liverpool. He partnership with U.S. rail ... [+]
Brightline, the sole private passenger rail service in the U.S., is ending a licensing deal with entrepreneur Richard Branson’s Virgin Enterprises and intends to operate only under its own name going forward. Virgin may have objections to that plan.
Created by Wall Street investor Wes Edens, Brightline began running trains between Miami and West Palm Beach, Florida, about two years ago. (Regular service has been suspended during the Covid-19 pandemic.) It unveiled plans to rebrand the service Virgin Trains in November 2018, and renamed its main station as Virgin MiamiCentral. And while Virgin was initially expected to invest in the U.S. rail company, it doesn’t appear that happened.
“We will no longer use the Virgin brand following our parent’s termination of its licensing agreement with Virgin Enterprises Limited (together with its affiliates, “Virgin”),” Brightline said in its monthly operations report. “We will change our name to Brightline Trains LLC following the expiration of the applicable notice period for name changes under the senior loan agreement. Virgin has no remaining affiliation with us, or parent or its affiliate.”
Brightline trains at a Florida service facility.
Brightline’s parent company delivered the termination notice to Virgin on July 29, 2020, though “Virgin has disputed the validity of the termination notice,” according to the report. A Brightline spokesperson declined to provide additional details. A spokesman for Branson and Virgin didn’t immediately respond to a request for comment on the matter.
“Virgin has disputed the validity of the termination notice”
Billionaire entrepreneur Branson told Forbes in a January 2020 email that Virgin hadn’t invested in Brightline but wanted to.
“We have a long-term brand license and plan to invest in the company too,” he said, without elaborating. He made the comments a few weeks after his Virgin Trains shut down in the U.K. last December and prior to the coronavirus pandemic. That crisis ultimately triggered a bankruptcy filing for his Virgin Atlantic airline this week.
(For more see, Inside A Wall Street Tycoon’s Plans To Get Americans Off The Highway–And On His Trains, from the June 30, 2020 issue of Forbes Magazine.)
Brightline is ramping up for major expansions in Florida and a new Las Vegas-to-Southern California high-speed rail line. It’s building a rapid connection between West Palm Beach and Orlando and last month was awarded $200 million of private activity bonds from Nevada. That public allocation, along with $600 million of private activity bonds from California and a $1 billion allocation from the Department of Transportation allow Edens’ company to sell up to $4.2 billion of tax-exempt bonds to fund construction of the Xpress West line.
The 170-mile railway will be built near Interstate-15 and operate electric trains at speeds up to 200 miles an hour to move people between Apple Valley, California and Las Vegas in 85 minutes. Construction is to start late this year and the company estimates it will attract 10 million riders annually.
Brightline estimates its West Coast and Florida rail projects will cost a combined $9 billion to build but Edens has said they’ll eventually generate “spectacular” profits. Brightine estimates the two projects may haul nearly 20 million passengers in 2026, generate annual revenue of $1.6 billion and operating profit of almost $1 billion a year.
“The lack of passenger travel by train in this country is a travesty,” Edens told Forbes early this year. “It’s a gigantic opportunity.”
