Company could hike fares on monorail

Stephen Curran

Friday, June 24, 2005 | 9:54 a.m.

Las Vegas Monorail officials, coming off the transportation system's second dip in ridership in as many months, could weigh a hike in fares as soon as next year, a company spokesman said Thursday.

No immediate plan to raise the out-of-pocket price to ride the monorail is on the table but the matter could come before the system's board of directors later this year, monorail company spokesman Todd Walker said.

The change could reflect a shifting focus within the company that manages the $650 million system from working to lure more people onto the trains to increasing the amount riders spend once aboard, he said.

"What we need to remember is that it's not just ridership, it's the revenue that's produced," Walker said. "If we did increase prices, would we see a dropoff in ridership? Not much."

Consultant Terry Murphy, who sits on the monorail company's board of directors, said she did not expect the matter to come before the board and that the company should continue focusing its efforts onto attracting more people onto the elevated trains.

Moody's, a Wall Street bond analyst that in late March downgraded the monorail's outstanding bonds to the high-risk junk category, has suggested company leaders consider raising fares as a way to offset lower-than-expected ridership.

So far, they're the only ones to suggest the board raise fares, Murphy said.

"That's not something the board would consider," she said. "I think there are other strategies to increase ridership. We're a very new system and this is to be expected ... People keep saying it (raising fares) is a possibility but it's not."

The monorail company in May saw just shy of 900,000 people board its trains, down from 957,000 in April and its all-time high of more than a million passengers in March. May's riders brought in almost $2.7 million, down from more than $2.8 million in April and close to $3 million in March.

It's still a far cry from February's low of 621,000 riders bringing in $1.7 million in revenue, the system's lowest full month. Walker would not speculate on this month's figures but said the past couple months show "pretty steady" ridership.

It now costs $3 for a one-way trip on the monorail, which runs from the MGM Grand to the Sahara hotel, or $10 for an all-day pass. Because there is no concrete proposal to raise fares, Walker said he did not know how riders could expect to pay if an increase were to happen.

Without a "significant increase" in ridership, the company's bonds could still be downgraded further, analysts have said. The bonds are expected to be re-evaluated sometime next year.

The monorail has faced sporadic problems since a wheel that fell from a moving train left the system shuttered for 107 days late last year. It reopened Dec. 24 but was shut down for several hours on two days in early May after a communication loss between the automated control center and the trains and forced technicians to fix emergency window handles that came off in passengers' hands.

The system now boasts a 98 percent reliability rate, Walker said.