Virgin Trains East Coast franchise to end 24 June 2018 and is temporarily re-nationalised

[Tetchytyke]

He also knows it's not a "bailout", and that VTEC is not run by Branson.

What is it, if not a bailout?

Define "run" by Branson. He had a bigger stake in VTEC than he does in several other Virgin businesses.

why does it get more and more obvious that he's trying to spin an agenda.

Pointing out that the tax-dodging Branson is being financially rewarded for failure is not "spinning an agenda".

Its quite pathetic, really, how people won't call Branson and Souter out for what they're doing.

 

[Qwerty133]

There's a rumour among VTEC staff (heard from a few different ones) that David Horne has been pencilled in to run VTWC. Not sure what's supposedly happening to their existing MD.

But that's one of many rumours floating round, I thought if he was going anywhere it'd be back to EMT as he was highly regarded there.

Anyone could have 'ran' EMT during that period without many issues. Tim Shoveller had already started on everything that was achieved during David's time at EMT.

 

[Bd250]

Clearly something has gone very wrong on the east coast. Its staggering how empty the trains are over the past 12 months, it is also my impression that ticket prices have dramatically increased.

Did DOR truly do a better job running the line? Im not sure, but the fares did seem lower and the trains more full.

What really strikes me every time I travel on the ECML is what a brilliant job GNER did with the Mallard programme, personally I think Virgins interior design choices are less appealing, but they don't take away from the excellent lighting, quality fixtures. Not that I see them much these days...I seem to perpetually be punished with the EMT sets.

 

[class26]

Clearly something has gone very wrong on the east coast. Its staggering how empty the trains are over the past 12 months, it is also my impression that ticket prices have dramatically increased.

Did DOR truly do a better job running the line? Im not sure, but the fares did seem lower and the trains more full.

What really strikes me every time I travel on the ECML is what a brilliant job GNER did with the Mallard programme, personally I think Virgins interior design choices are less appealing, but they don't take away from the excellent lighting, quality fixtures. Not that I see them much these days...I seem to perpetually be punished with the EMT sets.

Having used the ECML for the last 12 years I would say fares have shot up. Before Virgin I would take the 09.21 from Grantham to Kings X and it never , even at less than a weeks notice cost more than about £65 return. Now with the same conditions is over £90. There is a limit how much you can squeeze out of people. The low fares are generally much more restricted so I know that many simply drive south further down the line to keep the cost in check.

 

[DenmarkRail]

What is it, if not a bailout?

Define "run" by Branson. He had a bigger stake in VTEC than he does in several other Virgin businesses.



Pointing out that the tax-dodging Branson is being financially rewarded for failure is not "spinning an agenda".

Its quite pathetic, really, how people won't call Branson and Souter out for what they're doing.

Are there actually any Virgin companies still run by Branson? All the airlines are under 50% ownership (when KLM takes 30% in VS)....

 

[Megafuss]

To echo others, I can't believe how empty the trains are.

It really struck me the other day when my train was cancelled. I was worried i wouldn't get a seat on the next one. I had no problems at all. Indeed, the carriage I was in only had a small handful if aisle seats taken! Remember, this is with two "trainloads" of people as the previous one was cancelled.

I had only paid £23 for a 1h40 min trip. So it can't just be price.

 

[Joe Paxton]

Are there actually any Virgin companies still run by Branson? All the airlines are under 50% ownership (when KLM takes 30% in VS)....

Yes, the most prominent probably being Virgin Holidays and the controversial Virgin Care. Virgin Rail Group (owner of Virgin Trains West Coast) remains 51% owned by the Virgin Group.

https://en.wikipedia.org/wiki/Virgin_Group

 

[LOL The Irony]

Pointing out that the tax-dodging Branson is being financially rewarded for failure is not "spinning an agenda".

Its quite pathetic, really, how people won't call Branson and Souter out for what they're doing.

Let's get a few things sorted.
A) Considering the farcical way he dealt with the transition from Nat Ex to DOR, "Lord" Adonis has no room to talk about rail franchising and is no better than Beardy Branson in this situation. It's like 2 famous World War 2 dictators lecturing each other on not killing their citizens. Pot kettle black.
B) I never said I supported Branson.
C) Adonis is your typical politician who acts like they care about your cause but in reality they couldn't give a f***. He is spinning an agenda. For his own gain. Who was daft enough to give him a knighthood?

 

[London Trains]

Are there actually any Virgin companies still run by Branson? All the airlines are under 50% ownership (when KLM takes 30% in VS)....

The only one I think is Virgin Rail Group (VTWC)

 

[SaveECRewards]

Let's get a few things sorted.
A) Considering the farcical way he dealt with the transition from Nat Ex to DOR, "Lord" Adonis has no room to talk about rail franchising and is no better than Beardy Branson in this situation. It's like 2 famous World War 2 dictators lecturing each other on not killing their citizens. Pot kettle black.
B) I never said I supported Branson.
C) Adonis is your typical politician who acts like they care about your cause but in reality they couldn't give a f***. He is spinning an agenda. For his own gain. Who was daft enough to give him a knighthood?

Agreed on C. I'm curious as to what was done badly with the transition from NXEC to DOR, from a passenger perspective (I never followed the industry closely then) it seemed to go fine. Travelled on the final Friday of NXEC on the 19:00 in the restaurant the service was as good as ever and then on the Sunday there was banners up in York "it's business as usual, it's your East Coast" I boarded my train (which still said National Express on the white stripe but some others I saw had been rebranded). On board it was business as usual, the menu was still the same (some Sunday trains had the first class at seat menu), the hand held EPOS was printing receipts with the new logo and the website had changed overnight to reflect the new branding.

Just to be clear I'm not disagreeing with you, just because it seemed smooth to someone who was just a passenger it may have been a total farce the way to was run. So I'd be curious. The only unprofessional bit of the handover I remember was NXEC having one last go of their mailing list to tell people to take the coach instead.

 

[LOL The Irony]

The only unprofessional bit of the handover I remember was NXEC having one last go of their mailing list to tell people to take the coach instead.

If I'd been screwed by Adonis and I ran an inter city coach service, that's exactly what I'd do.

 

[SaveECRewards]

If I'd been screwed by Adonis and I ran an inter city coach service, that's exactly what I'd do.

We might get some nice Megabus offers soon then

Some day I need to find out more what went on behind the scenes with NX and Adonis. If you can point any links my way I'd be interested. I knew the ECML well from a passenger perspective but my only source for the politics side of things was the mainstream news, never read forums like this or the rail press back then.

 

[LOL The Irony]

We might get some nice Megabus offers soon then

Some day I need to find out more what went on behind the scenes with NX and Adonis. If you can point any links my way I'd be interested. I knew the ECML well from a passenger perspective but my only source for the politics side of things was the mainstream news, never read forums like this or the rail press back then.

Apparently Nat Ex offered over £100 million to leave the contract early due to the 2008 financial crisis I believe and Adonis basically told them to get stuffed and the Government only wound up getting £79 million and it caused Nat Ex to loose the Anglia franchise from what I gathered. FYI I could be wrong on the Anglia thing.

 

[LOL The Irony]

In prior negotiations, the company had reportedly offered to pay over £100 million to be released from its commitment to operate the franchise.[18] Transport Secretary Lord Adonis had rejected this on a matter of principle,[18] saying: "The government is not prepared to renegotiate rail franchises, because I'm simply not prepared to bail out companies that are unable to meet their commitments".[22] In defaulting on the franchise, under the franchising system, National Express only directly incurred losses of £72 million by forfeiting bonds.

From the NXEC Wikipedia page.

 

[Helvellyn]

Don't assume that if a management contract is offered that Stagecoach will sign up. They didn't on SWT in 2016 when there were talks to extend through to 2019. We were told at the time DfT wanted too much and that Stagecoach weren't going to just pay what DfT thought they should (over half the farebox was already going to the DfT I believe).

Also, I know Virgin is very much a marmite brand but the sin here is that Stagecoach/Virgin said the franchise would grow more than it has. I'm sure in the years ahead a lot more will come out about what DfT promised, what went wrong for VTEC, etc. But love them of loathe them they have grown the franchise and they are making the promised premium payments to the DfT. The problem is that the growth gap has got too big and the losses are because not enough profit (different to no profit) is being made. Would East Coast have made the same level of profits/payments? Who knows. But I still think that expecting a company to guess a decade ahead for projected earnings is madness. DfT needs to find a better way to share profits but that also needs the Treasury to stop treating certain rail franchises as golden geese.

 

[Emblematic]

Report on the news this morning that announcement expected this morning, anticipated that the franchise ends today. Roger Ford on Radio 4 around 6.20 if anyone wants to hear replay on iPlayer.

 

[KashmireHawker]

Nothing yet announced, but knowing that February's came in mid-afternoon, anything could still happen today.

 

[Tetchytyke]

If I'd been screwed by Adonis and I ran an inter city coach service, that's exactly what I'd do.

You see, this is the issue. Holding a company to the contract they signed is seen as "screwing" them. How exactly?

Don't forget, too, that NXEC filled all the peak trains for months in advance with £9 sale tickets just before they left. A final burning dog turd through the letterbox.

Adonis is a politician so of course he's going to paste the opposition. That's his job. Doesn't make him wrong in this instance though.

I thought the handover to DOR was handled well.

 

[Tetchytyke]

it caused Nat Ex to loose the Anglia franchise from what I gathered.

Well yes, that's exactly how it should work.

IMO a franchisee should lose ALL their franchises if they walk away from one. It'd concentrate a few minds. Still, the Tories won't do that, not when they can privatise profit and nationalise loss.

As for the offer, I'm more sceptical. Why would a company voluntarily offer £100m to leave if they know they'd only forfeit £80m? I know NX were badly run, but they aren't that badly run.

 

[warriorofrovac]

Well yes, that's exactly how it should work.

IMO a franchisee should lose ALL their franchises if they walk away from one. It'd concentrate a few minds. Still, the Tories won't do that, not when they can privatise profit and nationalise loss.

Surely they are all seperate subsidiaries with seperate managment structures and seperate franchise agreements. If one is operating well, why should that be made to suffer because another failed? NatEX failed, but C2C was operating well.

 

[Tetchytyke]

If one is operating well, why should that be made to suffer because another failed?

Franchisees make a commitment. If they won't stick to it, as with Virgin and NX, then there should be consequences.

Why should private companies be allowed to walk away scot-free from their commitments?

It's not just the railways where this is an issue, either. It's disgusting what the likes of Serco get away with.

 

[yorksrob]

Well, whatever the new arrangement, hopefully there will be more emphasis on getting bums on seats, rather than an over-reliance on questionable revenue models which seem to depend on getting fewer passengers to pay more.

 

[warriorofrovac]

Franchisees make a commitment. If they won't stick to it, as with Virgin and NX, then there should be consequences.

Why should private companies be allowed to walk away scot-free from their commitments?

It's not just the railways where this is an issue, either. It's disgusting what the likes of Serco get away with.

Franchisees make a commitment yes, but if C2C met all their commitments and NatEX didn't, why should C2C be made to sufffer because it happens to be a National Express subsidiaries? TBH, pulling all of the franchises just seems like a baby having a tantrum and throwing their toys out the pram.

 

[Tetchytyke]

if C2C met all their commitments and NatEX didn't, why should C2C be made to sufffer

Because NXEC and C2C were one and the same: wholly owned subsidiaries of NEG.

My view is that Stagecoach and Virgin should also lose their other franchises if they walk away from this one. It's about emphasising the value of contracts.

 

[AlterEgo]

It would be wonderful if this went back to operator of last resort, but that's sadly not going to happen.

Because of politics, this has Direct Award/management contract written all over it. I hope we all stand on guard to repeatedly call out VTEC over the coming couple of years when they take credit for the "amazing" Azumas (God damn, I hope they have to run them in a plain white livery).

 

[capital12]

Franchisees make a commitment. If they won't stick to it, as with Virgin and NX, then there should be consequences.

Why should private companies be allowed to walk away scot-free from their commitments?

It's not just the railways where this is an issue, either. It's disgusting what the likes of Serco get away with.

Because if the DfT have supplied inaccurate information to the bidders about passenger forecasts, Network Rail have failed to provide the upgrades that were promised and the current infrastructure fails on a near daily basis how do you expect a company to provide an accurate bid and stick to it? It seems it only takes someone to fart at Grantham for the wires to drop down at Newark!

I used to like Virgin but their constant self congratulating hype grates a bit now and I’d love for the ridiculous Azuma name to be confined to the dustbin but I’m not so narrow minded and anti Souter/Branson to not see the wider picture either.

This has been a failure on all sides, and it seems some are too narrow minded to see that. I’d say the DfT are more responsible for these failures than anyone and let’s not forget that DOR East Coast barely invested in anything so yes they made profits but they weren’t spending the capital to improve or refurbish anything - how long could that go on for until the interiors were so bad that they started losing customers?

 

[td97]

Grand Central has timed it well to apply for extra paths on the ECML
https://www.railmagazine.com/news/network/grand-central-submits-bids-for-extra-paths

The open access operator wants to run one additional Sunderland-King’s Cross train, an additional train between Bradford Interchange and London in the late afternoon, an early morning train from Wakefield Kirkgate to London that will arrive in the capital before 0730, and a ten-coach late-evening train departing London before 2200 that will split at Doncaster (with one part returning to Wakefield and the other continuing to York).

Grand Central also hopes to stop its early morning and late evening West Yorkshire route trains at Peterborough, as well as its two North East trains.

 

[theironroad]

Report on the news this morning that announcement expected this morning, anticipated that the franchise ends today. Roger Ford on Radio 4 around 6.20 if anyone wants to hear replay on iPlayer.

Nothing yet announced, but knowing that February's came in mid-afternoon, anything could still happen today.

The cynic in me thought they may try to sneak out the announcement late this Friday afternoon and bury it under the royal wedding.

There is an opportunity in the daily business agenda for the house of commons chamber for ministerial statements to be made. Today it is after PMQs at 1230...ish as pmq often overruns. This MAY be an opportunity for Grayling to rise to his feet, but certainly not assured.

 

[700007]

My assumption is we won't hear anything until after the PMQs at around 1300. Also allows Grayling to dodge the main bulk of fire in Commons.

 

[Chrism20]

The cynic in me thought they may try to sneak out the announcement late this Friday afternoon and bury it under the royal wedding.

No need for a wedding to bury it.

It will be buried by Matt Hancock standing up straight after Grayling and announcing what he is going to do about FOBT machines in betting shops which is a far, far more contentious issue than the ECML.

An announcement on that has been imminent for days so it wouldn’t surprise me if Grayling announcing Virgin/Stagecoach are to continue running the ECML is buried by that.