I can see it making sense if the Chester - Crewe service moves to Northern - that'd mean they had three services per hour at Chester (the Crewe service, the slow Manchester via Altrincham and the fast Manchester via Warrington that currently extends to West Yorkshire) - meaning Northern would be the second biggest users of Chester station (after Merseyrail).
Given pressure on other depots, having a presence at Chester would remove a bit of dead running.
Plus, having a smaller depot (at Chester) may allow them to focus resources better - given the way that there are reasons for and against concentrating resources at large depots)
The borders routes on the Wales & Borders franchise are the profitable parts, as they don't have huge funding subsidies like most of the south wales & Cardiff central routes
I'm not sure that any two/three coach DMU service is actually "profitable" - maybe a few with sufficient First Class and long distance passengers (e.g. TPE) - I doubt the Chester - Crewe shuttle makes enough money to qualify though
That’s a revisionist view of ATW. The reality is they were pretty competent as an operator.
Agreed - the Government gave them a "no growth" franchise (which was the same as the "Provincial" bits of EMT/ Northern/ GWR etc that had franchises starting around the same time as ATW, so it wasn't anything specific to Welsh operations - all of the ex-Provincial areas seemed to get the same "stead as she goes" terms).
Arriva met those terms but faced a lot of criticism along the lines of "why won't a heavily subsidised franchise order brand new trains/ double lengths/ increase frequencies" - from people who didn't appreciate the way that franchises operate.
Not helped by the fact that the Government input was more focussed on the "premium" Holyhead - Cardiff service and other "fringes" like throwing resources at Fishguard/ Aberystwyth rather than making improvements on busier lines around Cardiff. That's not Arriva's fault, that's more about politicians focussing more on certain constituencies.
It's always going to be a set of routes requiring large subsidy (like Northern), so really any decisions are taken by Government - the franchisee just has to fit around those demands - there's not going to be much scope to make commercial decisions about expansion without increased subsidy.