Virgin Trains boss says: We'll win west coast rail franchise on customer service

wintonian · 11 Dec 2011

Couldn't find this on here, so here's what Mr Branson thinks.

Virgin Trains has staked its claim to renew the prestigious west coast rail franchise by warning the government against repeating the east coast fiasco and awarding the contract to the highest bidder.

Acknowledging that his Virgin empire faces deep-pocketed competition from the French and Dutch state rail operators for the lucrative London-to-Glasgow route, Sir Richard Branson indicated that his company would win if customer service is judged to be an important factor.

Asked to give his opinion of Keolis, backed by France's SNCF, and Abellio, an offshoot of the Dutch national rail business, he said: "State-run companies generally speaking do not do that great a job, I believe."

Virgin Trains is also competing against Aberdeen-based FirstGroup for a 14-year contract, with the winner to be announced next summer.

Sir Brian Souter, whose Stagecoach group owns 49% of Virgin Trains, said he was "not afraid" of big-spending rivals but warned the government against triggering a repeat of the east coast bidding contest in 2007, when National Express knocked out Virgin with a successful £1.4bn bid. National Express handed back the route less than two years later after admitting that it could not afford the escalating payments set out in the contract.

"We have lost bids before like east coast mainline based on someone overbidding," said Souter, adding that the Virgin Trains bid would have "transformed" the London-to-Edinburgh line. "We just pray that does not happen again," he said.

Branson said that Virgin's bid for a new contract would represent a "late Christmas present" for George Osborne. "Great Britain urgently needs investment and we are willing to deliver that investment. I don't think the chancellor realises that we will bring a late Christmas present when we bid next year, bringing literally billions of pounds to his coffers when this country desperately needs cash."

The government was criticised last month for selling Northern Rock to Branson at a loss of at least £400m on the £1.4bn that the taxpayer pumped into the stricken lender during the credit crunch. One MP said that the entrepreneur had been sold the bank "for a song", as Branson pledged that the revamped business would offer small loans to the poor under the Virgin Money brand.

However, Virgin Trains says it has generated strong returns for the taxpayer as well as improving services on a route that will carry 30m people this year. According to Virgin, it pays a premium to the government of £160m a year, which could result in total payments of more than £2bn over the course of a 14-year contract.

The west coast route has also been profitable for Branson. Since launching its trains business, his Virgin empire has earned dividends of more than £188m, including £17.8m last year, a total that the company says rewards the "risk" it took in running services on a line that was beset by engineering problems for much of the past decade.

Bob Crow, general secretary of the RMT trade union, described the franchise as a "one-way ticket to the bank" for the entrepreneur.

Branson said that Virgin Trains was awaiting the Department for Transport's outline of the bidding criteria, but promised passengers "radical" changes if its bid were successful.

"We have radical ideas for the new franchise and we are still waiting to see whether the new franchise will really be based on the bottom line, and whether innovative ideas will be taken into account," he said.

A government spokesman said: "All bids are judged on their affordability, deliverability and their value for money for passengers and the taxpayer."

thegaurdian

RailUK Forums

185 · 11 Dec 2011

"The war will be over by Christmas....."

Said in 1914

Pumbaa · 11 Dec 2011

Famous last words?

HH · 11 Dec 2011

I think that everyone said exactly what you'd expect them to say. Nothing surprising at all.

ji459 · 11 Dec 2011

wintonian said:
"I don't think the chancellor realises that we will bring a late Christmas present when we bid next year, bringing literally billions of pounds to his coffers when this country desperately needs cash."

That's hilarious coming from a man who excels at paying the government as little as possible by basing his businesses in overseas tax havens.

DarloRich · 11 Dec 2011

Is Comical Ali now working for Virgin?

Royston Vasey · 11 Dec 2011

As an aside, Virgin pay HM Govt £160m a year, then pay the considerable operating expenditure and fixed costs, and only make £17.8m a year profit?? That can't be right, that'd be a dismal margin! Hardly a one way ticket to the bank Bob!! Their margin must be a few percent, at best.

WestCoast · 11 Dec 2011

The usual spin from Branson, as one would expect. It's hardly a surprise that they want to promote themselves heavily, but I disagree with his comments about Abellio and Keolis. He's making out like the improved WCML is all down to Virgin, which as we know, is complete rubbish.

He's had a lot to say on the airline side recently as well, most of which was all talk with no substance.

CosherB · 11 Dec 2011

As a regular WCML user since the '60s, and Cheshire to London and back once or twice a week between late BR days and about 3 years ago, I'd say Virgin has vastly improved the service.

Faster, more reliable, and far better attitude from on-board staff. I hope he wins it!

Pity the WCML didn't come up with the goods re 140mph! Virgin did with the trains!

tbtc · 11 Dec 2011

ji459 said:
That's hilarious coming from a man who excels at paying the government as little as possible by basing his businesses in overseas tax havens.

Whilst I was ready to dismiss the article (as a fairly unsubstantial bit of waffle from a company who were crying foul about the infrastructure that meant their reliability figures were rubbish just a couple of weeks ago), you have made a very good point here about Branson suggesting he is giving the UK Treasury a great deal (but declining to pay his taxes/ his companies taxes to the UK Treasury).

As we all know, its going to be sealed bids, so Virgin's customer service/tax dodging won't affect the judgement

HH · 11 Dec 2011

tbtc said:
As we all know, its going to be sealed bids, so Virgin's customer service/tax dodging won't affect the judgement

Do you really think that those marking the bid can't work out who's who from what they write? That would be both dreadfully naive and lacking in understanding of the (EFQM/RADAR) format bids take.

West Coast · 11 Dec 2011

I'm new here but I've browsed for months if not years, and I don't really understand the contempt and dislike for Virgin on here. I mean, sure I don't particularly like Branson, or Virgin as a wider company, but their rail operations are amongst the best in the country imo, definitely.

Fares have gone up despite their original promise not to, but they certainly haven;t inflated as much as other TOCs. Pendo's are excellent - they're reliable, fast and comfortable (to an extent) and customer satisfaction is excellent. That's evident every evening peak at Euston, especially with Milton Keynes commuters (of which I am not). There are dozens of LM trains there throughout the peak, which run busy but by no means packed. And then comes the first Virgin to call at MKC, and it is absolutely packed. People are happy enough to wait 30 minutes, an hour, just to board the Virgin train because they prefer it despite the overcrowding. To me, that is proof that VT are doing something right.

lookingforit35 · 11 Dec 2011

West Coast said:
There are dozens of LM trains there throughout the peak, which run busy but by no means packed. And then comes the first Virgin to call at MKC, and it is absolutely packed. People are happy enough to wait 30 minutes, an hour, just to board the Virgin train because they prefer it despite the overcrowding. To me, that is proof that VT are doing something right.

Without wishing to belittle your opinion, it doesnt really prove that people are happy to wait 30 to 60 minutes to experience Virgin's service to MKC rather than LM. It would be at best extremely naive to believe this.

It's faster, pure and simple, so commuters are likely to time their departures from work to co-incide with a fast train. Many thousands of commuters do so every weekday!

But I guess you might know that.............?

West Coast · 11 Dec 2011

lookingforit35 said:
Without wishing to belittle your opinion, it doesnt really prove that people are happy to wait 30 to 60 minutes to experience Virgin's service to MKC rather than LM. It would be at best extremely naive to believe this.

It's faster, pure and simple, so commuters are likely to time their departures from work to co-incide with a fast train. Many thousands of commuters do so every weekday!

But I guess you might know that.............?

VT takes 30 minutes, and LM usually about 45. If someone is willing to wait around up to an hour longer to board a Virgin Train, then do the math, they're getting home far later, even if it is a faster train.

And while I don't doubt many people in the City with busy lifestyles time their working life to coincide with a particular train ( :roll: ), there is no doubting that dozens of people literally wait standing around at Euston for an absolute age, and I do literally mean 30, 40 minutes or more, until the 1843's Platform number is announced, despite about 4 or 5 LM trains being called in that time.

neilmc · 11 Dec 2011

I must say the Manchester-London trains are good - every 20 minutes, and a journey time of two hours; haven't checked recently but I reckon they've killed the airline competition.

However the peak fares are a mess and a blatant rip-off with "peak creep" extending the "peak period" considerably such that if you're in London on business and want a cheap off-peak fare you won't be getting home much before ten p.m, similarly the morning off-peak starts surprisingly late with Preston people driving to Lancaster to get an earlier off-peak ticket and travel back through Preston, and the famous Chester/Shotton scam (who's scamming who exactly is debateable but my money's on the old bearded blondie!)

I'd like to see another TOC being given an hourly pathing to see what they could do to compete, or at the very least reinstate the direct Manchester-St. Pancras via Hope Valley route which was around during WCML engineering works a few years ago.

WestCoast · 11 Dec 2011

neilmc said:
I must say the Manchester-London trains are good - every 20 minutes, and a journey time of two hours; haven't checked recently but I reckon they've killed the airline competition.

However the peak fares are a mess and a blatant rip-off with "peak creep" extending the "peak period" considerably such that if you're in London on business and want a cheap off-peak fare you won't be getting home much before ten p.m, similarly the morning off-peak starts surprisingly late with Preston people driving to Lancaster to get an earlier off-peak ticket and travel back through Preston, and the famous Chester/Shotton scam (who's scamming who exactly is debateable but my money's on the old bearded blondie!)

Yeah, it's all well and good having high frequencies, but it doesn't matter because passengers are often restricted to one train as the only affordable fares are Advance tickets. The service isn't "turn-up-and-go".

In any case, the London-Glasgow trains are very busy and the sooner they become Extendolinos the better.

boltonwanderer · 11 Dec 2011

I've traveled between Preston and Glasgow on numerous occasions and never experienced any issues with Virgin. Reliable, clean, and a pleasant journey. Compare this to the same journey with TPE with their uncomfortable trains, lack of adequate onboard catering facilities and poor first class offerings.

And, using Northern everyday, a terrible service, I really am fearing what might happen if Abellio get anything to do with the WCML

cj_1985 · 11 Dec 2011

I too hope that the DfT doesn't award the new/next franchise based on the bottom line...

especially seeing as how the DfT jumped on Abellios bid when they claimed that could run the GE franchise with less units (and so, at a lower cost) than the other bidders...

there needs to be a middle ground where costs are low and the premium to the government is acceptible (or subsidy is low), while not sacrificing seats, services or quality of service...

WestCoast · 11 Dec 2011

boltonwanderer said:
And, using Northern everyday, a terrible service, I really am fearing what might happen if Abellio get anything to do with the WCML

You do know that the DfT controls so much, don't you? The stock (or lack of) that Northern has, the service levels e.t.c. are down to the DfT. I doubt Virgin would do a better job of running Northern, they wouldn't touch a tricky franchise like that in a million years.....

I used to be a Virgin fan, but I am getting sick of their smug rhetoric. Why are so many of their stations in such a dilapidated state? Why are they not concerned about losing revenue on short journeys?

lookingforit35 · 11 Dec 2011

West Coast said:
VT takes 30 minutes, and LM usually about 45. If someone is willing to wait around up to an hour longer to board a Virgin Train, then do the math, they're getting home far later, even if it is a faster train.

And while I don't doubt many people in the City with busy lifestyles time their working life to coincide with a particular train ( :roll: ), there is no doubting that dozens of people literally wait standing around at Euston for an absolute age, and I do literally mean 30, 40 minutes or more, until the 1843's Platform number is announced, despite about 4 or 5 LM trains being called in that time.

Dont buy it I'm afraid. Let's consider your assertion:

Commute takes 30 mins on Virgin, 45 mins on LM, neither are exactly a long time. Yet you claim dozens wait for up to an hour to experience the "better" service from Virgin.

Unless the insane have taken to commuting I can only conclude my original assumption of timing their journey home around a fast train is correct. Over the course of a week, these deluded souls would be losing up to 45 mins per day of their home life, purely because they are so wowed with Virgin. I could be wrong, but I think you may be a tad overplaying the desirability of this operator.

Zoe · 11 Dec 2011

WestCoast said:
Yeah, it's all well and good having high frequencies, but it doesn't matter because passengers are often restricted to one train as the only affordable fares are Advance tickets. The service isn't "turn-up-and-go".

I agree with you but when this was discussed elsewhere one point was that the VHF made more cheap advance fares available (by having more seats in total) and so helped with the modal shift.

All Line Rover · 11 Dec 2011

West Coast said:
I'm new here but I've browsed for months if not years, and I don't really understand the contempt and dislike for Virgin on here. I mean, sure I don't particularly like Branson, or Virgin as a wider company, but their rail operations are amongst the best in the country imo, definitely.

Fares have gone up despite their original promise not to, but they certainly haven;t inflated as much as other TOCs. Pendo's are excellent - they're reliable, fast and comfortable (to an extent) and customer satisfaction is excellent. That's evident every evening peak at Euston, especially with Milton Keynes commuters (of which I am not). There are dozens of LM trains there throughout the peak, which run busy but by no means packed. And then comes the first Virgin to call at MKC, and it is absolutely packed. People are happy enough to wait 30 minutes, an hour, just to board the Virgin train because they prefer it despite the overcrowding. To me, that is proof that VT are doing something right.

Although I like Virgin, I don't buy this. There are cheap "VT Only" tickets available between Milton Keynes and London. The 18:43 is the first Virgin train to Milton Keynes since 15:43 - a gap of THREE HOURS! It's no wonder there are many Milton Keynes commuters waiting to board the 18:43 Virgin Trains - most of them are VT Only ticket holders who have been forced to wait!

lookingforit35 · 11 Dec 2011

All Line Rover said:
Although I like Virgin, I don't buy this. There are cheap "VT Only" tickets available between Milton Keynes and London. The 18:43 is the first Virgin train to Milton Keynes since 15:43 - a gap of THREE HOURS! It's no wonder there are many Milton Keynes commuters waiting to board the 18:43 Virgin Trains - most of them are VT Only ticket holders who have been forced to wait!

Mystery solved!

As I said, it would be pretty insane to wait an hour to save 15 minutes, even if one LOVED the bearded one's trains! :lol:

Pumbaa · 11 Dec 2011

West Coast said:
I'm new here but I've browsed for months if not years, and I don't really understand the contempt and dislike for Virgin on here. I mean, sure I don't particularly like Branson, or Virgin as a wider company, but their rail operations are amongst the best in the country imo, definitely.

Other than being a good employer for their staff, if you can name one thing that Virgin have done that a) they can take all the credit for and wasn't on behalf of NR/DafT, b) they've stumped up the cash for themselves and c) has improved rail travel, if you can name one thing that meets those three conditions, maybe I'll lay off them and give them credit.

The franchise is a testament to financial skulduggery and leverage for maximum financial gain. And to be honest, if it wasn't VRG, it would have been another bus bandit along to exploit what they could.

Zoe · 11 Dec 2011

Pumbaa said:
The franchise is a testament to financial skulduggery and leverage for maximum financial gain. And to be honest, if it wasn't VRG, it would have been another bus bandit along to exploit what they could.

Another company may not have been as bold as Virgin though with their PUG2 plan. If Railtrack hadn't failed to deliver then we may well have a 140 mph WCML now.

PR1Berske · 11 Dec 2011

Choosing between Virgin and the backers behind Northern is a terrible choice. It's either "Famous for smelly toilets and high ticket prices!" or "Famous for 1980s Pacers and four people for every three seats!."

Blindtraveler · 11 Dec 2011

or the silent half of TPE, Famous for there 3 car trains on 4 hour anglo Scottish journeys, uncumfortable seats, crouding and not forgetting the public face of same franchise which some may refer to as a bus bandit but the majoritty know ar worst group, the people behind crapital disconnect!

quite like to see abelio getting it if Virgin dont but having been a satisfied VT Customer for years in terms of there service, staff etc my view is if it aint broke...

WestCoast · 11 Dec 2011

Blindtraveler said:
or the silent half of TPE, Famous for there 3 car trains on 4 hour anglo Scottish journeys, uncumfortable seats, crouding and not forgetting the public face of same franchise which some may refer to as a bus bandit but the majoritty know ar worst group, the people behind crapital disconnect!

..and whose fault is that? Were the 185s designed to do that route? Absolutely not. It was forced upon TPE by the DfT.

It should be a Virgin WC route!

I must commend Virgin's PR, it really has convinced people that they are the best and that all the investments and improvements are 100% down to them.

Zoe · 11 Dec 2011

WestCoast said:
It should be a Virgin WC route!

Where would you get stock for this from though? Would you have run the Birmingham to Scotland services via Manchester?

YorkshireBear · 11 Dec 2011

boltonwanderer said:
I've traveled between Preston and Glasgow on numerous occasions and never experienced any issues with Virgin. Reliable, clean, and a pleasant journey. Compare this to the same journey with TPE with their uncomfortable trains, lack of adequate onboard catering facilities and poor first class offerings.

And, using Northern everyday, a terrible service, I really am fearing what might happen if Abellio get anything to do with the WCML

Sorry just going to jump to the defence of FTPE and Northern rail. TPE trains to be fair are fantastic... no worse than the pendilinos (cept being diesel and not electric) they are 3 cars and should not be running the service, they were put there because the dft are mentally retarded.
Northern.... non caparable and really unfair of you to do so. Virgin would seem worse if they used 25-30 year old diesel stock and northern used brand new electric trains.
--- old post above --- --- new post below ---

Zoe said:
Where would you get stock for this from though? Would you have run the Birmingham to Scotland services via Manchester?

Well its hardly a trans pennine route... it was oeprated by voyagers before wasnt it?

Virgin Trains boss says: We'll win west coast rail franchise on customer service

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