Virgin Trains, a subsidiary of Sir Richard Branson’s Virgin group of companies, has lost in its bid to continue running the West Coast line rail services.
Virgin, which has been operating services on the line since 1997, has lost the franchise to First Group, a public transport company that is registered in Aberdeen, Scotland, following a government announcement today. First Group will now be operating the franchise from December this year until 2026.
The new incumbent has pledged to add capacity to the route, which constitutes the main arterial line between London Euston and Edinburgh, and incorporates the West Midlands, Greater Manchester, Liverpool, and Glasgow.
Sir Richard Branson has been predictably damning of the governments decision, saying that it was ‘very disappointing,’ while raising questions with regards to the amount of money that had won the bid for First Group.
It is believed that First Group bid between GBP6.5bn and GBP7bn, compared with Virgin’s GBP5.5bn to GBP6bn, and that the deal was sealed by its promise to improve services. But Branson commented that to bid more than Virgin had to secure the franchise would be ‘insanity’, and added, ‘We submitted a strong and deliverable bid based on improving customers’ experience, increased investment and sustained innovation. To have bid more would have involved dramatic cuts to customer quality and considerable fare rises, which we were unwilling to entertain.
We also did not want to risk letting everybody down with almost certain bankruptcy at some time during the franchise as happened to GNER and National Express who overbid on the East Coast mainline.’
Meanwhile, rail minister, Theresa Villiers, commented that the new franchise would, ‘deliver big improvements for passengers, with more seats and plans for more services.’