During testing and commissioning, the monorail suffered several malfunctions that delayed the start of passenger service for almost a year. The most severe of these problems related to parts falling from the monorail to the ground under the tracks.
On September 8, 2004, more problems with falling parts led to the closing of the monorail for nearly four months. It reopened on December 24, 2004. A number of repairs were made to the monorail cars during this shutdown. Each time the monorail system requires major engineering changes, it must undergo a lengthy "commissioning" process to confirm the effectiveness and safety of the repairs. The local press reported that each day the monorail was down cost the system approximately $85,000, and that over $8.3 million was lost as a result of this one shutdown.
Transit Systems Management officials cited the good handling of crowds during the Consumer Electronics Show in January 2005 as proof that the system can handle a major convention.
On February 2, 2005, the monorail system had to be shut down again due to problems with the electrical system. Reportedly, a short circuit required replacement of a 30 foot (9.14 m) section of the power rail. The system reopened about 12 hours later.
July 2005 set a record for ridership for the monorail, with over one million passengers. BankWest debuted a red "MoneyRail" branded train, and joins Nextel Communications (now a part of Sprint Nextel Corporation), Hansens Beverage, and Paramount Studios (with a Star Trek themed train) as corporate sponsors.
On July 8, 2005, Transit Systems Management announced that it would shut down, turning over its responsibilities to the Las Vegas Monorail Company, the system operator. Curtis Myles, a former deputy general manager of the Regional Transportation Commission of Southern Nevada, became President of the Las Vegas Monorail Company. He assumed his duties on July 18.
On June 6, 2006, it was announced by the Las Vegas Monorail Corporation that Las Vegas Monorail revenues rose nearly 16 percent from the previous year, to $3,250,565 in April 2006. Likewise, ridership had also increased, from 563,823 riders in January 2006 to 704,527 in April 2006. New ticket distribution and marketing efforts had been implemented to continue the trend, including a ticket brokerage program that provided convention attendees with monorail tickets in advance and a national public relations programme.
The present monorail (Phase 1 of the overall project) begins at the MGM Grand Hotel near the south end of The Strip, and runs roughly parallel to the Strip on its eastern side. The monorail passes next to the Convention Center and the Las Vegas Hilton, both with stations, before ending at the Sahara hotel at the north end of the Strip. The ride takes about 14 minutes to travel its total distance of 3.9 miles (about 6.3 km).
The monorail generally runs behind the eastern Strip side hotels and casinos, a long block away from the Strip. To get to the Strip thus usually requires a long walk through one or more casinos, with the prospect of emerging upon the Strip in an unexpected location. This lack of a direct presence on the Strip along with relatively high ticket prices has been a factor in the rather slow acceptance of the monorail.
The proposed New Las Vegas Arena, to be built behind Bally's and Paris Las Vegas could be accessed from the existing Bally's station.
The Las Vegas Monorail generates revenue not only from ticketed passengers, but also from corporate sponsors. Branding rights for the seven stations and the nine trains are available, and the sponsorship prices are in the millions. Hansens Beverage sponsored the first monorail train, featuring its Monster Energy Drink. Nextel Communications created a totally themed pavilion by branding the largest station, adjacent to the Las Vegas Convention Center. Since the Sprint-Nextel Merger in late 2005, Nextel Central has been rebranded as Sprint Central, however in late February 2008, the Sprint Nextel Corporation sent the Las Vegas Monorail Company a letter stating that they were opting to terminate their contract, because the Monorail failed to meet the 1.2 million riders specified in their contract. All stations in the system are available for branding by companies and groups. By selling branding rights for the stations, the system earns additional income to limit the fares paid by passengers.
The Las Vegas Monorail vehicles and signals systems were developed by Bombardier Transportation. The technology for the monorail vehicles came directly from the well-tested monorail systems running in Walt Disney World. Bombardier constructed Mark VI Monorail trains both for Walt Disney World Monorail System and for Las Vegas.
The design of the monorail stations was executed by Carter Burgess. The guideway design was mainly performed by Harry Jasper, Carlos Banchik, Paul Greco, Laura Thompson, Doug Morales and Khalil Amrikani.
Prior to the Las Vegas Monorail, no major urban transportation system in the United States operated without significant public funding. As reported in the Washington Post, a spokesperson for the largest association of transit utilities in the United States noted that New York city's subway system recovers only 67% of its operating costs through fares and advertising revenue, and that it New York is the best performer in the US in that respect.
Stations listed from north to south.
The monorail uses nine Bombardier MVI trains that have four cars in each of the fully automatic trains. The guideway is built to the "ALWEG" track standard; for the first seven years the line only ran as the MGM Shuttle between MGM and Bally's stations—during this time two ex-Disneyland Mark IV monorail trains were used.
All trains in the system are available for branding by companies and groups. By selling branding rights for the trains, the system earns additional income to limit the fares paid by passengers. Branding income from the trains is much lower than the income received from the station branding.
Phase 2, a 2.3 mile (3.7 km) extension along Main Street to Downtown Las Vegas was planned, with new stations at the Stratosphere Hotel, Charleston Boulevard, Bonneville Avenue and Main Street Station. Construction was planned to begin in 2005 with service beginning in 2008. However, the anticipated funding from the federal government was not allocated in 2004, so the plans were put on hold. On January 27, 2005, the federal government announced that it will not provide money for the $400 million project.
The original plan was to open the system in January 2004, and for it to cover its debts and operating expenses by attracting 19 to 20 million riders. Since the system was not only delayed in opening, but later shut down for four months, income was not as great as organizers had hoped. This reportedly is a contributing factor for the government's denial of Phase 2 funding.
It is thus unclear if Phase 2 will ever be built. The Associated Press (AP) reported that Cam Walker, head of Transit Systems Management, the non-profit corporation charged with operating the monorail, said his company had no immediate plans to extend the monorail in any direction. The AP also reported that Las Vegas Mayor Oscar Goodman has been looking at cheaper, alternative funding for a light rail system or high tech buses.
Phase 3 was planned to extended the monorail system south from the MGM Grand Station underground to McCarran International Airport. Providing monorail service to the airport has been an unpopular idea with limousine and taxi operators in the city, as trips to and from the airport form a major portion of their business. Several hotel and casino owners on the Strip continue to support the project, and are more supportive of an extension to the airport than one to downtown Las Vegas. The airport extension will be built with private funds and is expected to be built by 2011.
On August 28, 2006 the company announced that it is working on a revision of phase 3 that should be announced early in 2007. The plan would work with existing casino companies to add additional stations and connections to existing stations. The plan includes connections to all of the major convention centers and the airport. In addition the plan is expected to provide some connection to the three small monorails on the west side of the strip.
At present, a feasibility study has been ordered to fit in with an upcoming expansion at McCarran Airport that would allow for an integrated station at the airport as part of the new terminal 3. The extension would begin at the new Terminal 3, with the first stop near Terminal 1, then north on Swenson Avenue, stopping at the Thomas & Mack Center at University of Nevada, Las Vegas (UNLV). The route would then continue north on Paradise Road and west on Harmon Avenue, with stops at Hard Rock Hotel and Casino and the proposed W Hotel (now canceled), before turning south on Koval and west on Tropicana to meet up with the existing system at the MGM Grand. This proposed route would be all overhead like the existing line and is proposed to be built with private funds. This would add 4.2 miles to the existing route more the doubling the length of track. A formal proposal for this route is expected late in 2008.