Operator calls for Virgin’s West Coast contract to be extended after strong year
A STRONG performance from its West Coast Main Line franchise has seen revenue improve for Virgin Rail Group.
Minority stakeholder in the operation, Stagecoach, has now called on the Government to exercise its powers and extend the right of Virgin to operate the route for a further 12 months.
The new operating franchise began in June last year and is planned to run until at least March 31, 2017.
However, in its annual results statement, Stagecoach which owns a 49% stake in the franchise, said: “We continue to believe there is a compelling case for the Department for Transport to exercise the discretion that it has to extend the contract, on pre-agreed terms, by one additional year to March 31, 2018.”
Figures show revenue growing from £465.6m to £510.3m for the year to April 30, 2015. Operating profit rose to £28m (2014: £2.6m) and profit after tax was £22.3m (2014: £2m).
During the year, Virgin Rail delivered further service improvements, including the launch of two new direct Virgin Trains services between London and Blackpool, and London and Shrewsbury.
It said work was also well underway on a programme to convert one first class carriage in each of 21 nine-carriage Pendolino trains to Standard Class. The project, which is expected to be completed in September 2015 and includes a major interior refresh and deep clean of the trains, will create significant additional standard class seating capacity for customers.
The upgrade to onboard wi-fi is almost complete and Virgin said it was already providing a significantly improved service to passengers. In addition, the rail group is continuing to pursue the possibility of trackside wi-fi infrastructure which would provide free and fast wi-fi to all customers.
Stagecoach said it expected the rail group to continue to perform strongly and the full-year effect of the new franchise operation would be seen in the year ending April 30, 2016.
Martin Griffiths, Stagecoach chief executive, said: “The prospects in the UK rail sector are encouraging, with a franchise model focused on a combination of taxpayer value, quality service for customers and an appropriate balance of reward and risk for operators.
“We are pleased to have started the new Virgin Trains East Coast franchise and look forward to delivering a brand new fleet of technologically advanced Hitachi trains and £140m of improvements during the franchise to transform the experience for customers.
“The Virgin Trains West Coast franchise is performing well, we have submitted an exciting bid for the TransPennine Express franchise and our joint venture with Abellio has been shortlisted for the East Anglia franchise.”
