Revenues up almost 6% for Virgin Rail as IPPR recommends service overhaul
MINORITY stakeholder in Virgin Rail Group, Stagecoach, has said early trading from the newly extended agreement to operate the West Coast Main Line service is proving strong.
In the 12 weeks to July 20, 2014, Stagecoach said VRG revenues had grown 5.7%.
The new West Coast Trains franchise began in late June and is planned to run until at least March 31, 2017. Stagecoach said the Department for Transport (DfT) has the discretion to extend the contract, on pre-agreed terms, by an additional year to the end of March 2018.
“While it is still early in the new franchise, trading to date has been strong,” said Stagecoach in a interim management statement.
The group, which also operates a number of bus and other rail services, said its overall profitability remained satisfactory, and there had been no material change to its expected adjusted earnings per share for the year ending April 30. 2015.
In outlook, the group said: “Although there are a number of challenges to growing profit in the year ending April 30, 2015, overall current trading is satisfactory and we remain on course to meet our expectations for the year.”
The update comes on the same day that a new report from think tank, the Institute for Public Policy Research, highlights the relationship between public and private stakes in rail services, and differences between bus services in London and elsewhere.
The IPPR said it had examined the pros and cons of existing policy for both of these transport markets and had concluded that while policy for London buses seemed to be performing reasonably well, there were challenges facing rail which needed addressing, though these paled in comparison to those facing bus markets outside London.
The report recommends:
• allowing public sector rail operators to compete for franchises, including as part of a joint venture with private companies
• handing responsibility for franchising decisions to the Office of Rail Regulation
• encouraging train operating companies (TOCs) to contribute more towards infrastructure costs and reduce the burden on taxpayers
Recommendations focused on bus services outside London include:
• giving greater powers and responsibilities to local bodies to shape local bus markets
• replicating the Transport for London (TfL) model at the city-region and combined authority level
• greater integration of transport spending and services by health and education providers (such as hospital shuttles and school buses)
• a new long-term, national transport strategy, to be written and owned by the DfT.
