PASSENGER TRAINS CAN BE GOOD BUSINESS

This article reports an interview with C Green, Chief Executive of Virgin Trains. Here, Green explains how to make it profitable for a railway to carry commuters and inter-city passengers. Ten of the 25 franchises to train operating companies (TOCs) to run former British Rail services require subsidy elimination in the final years of their concessions, with most paying a premium back to government. By far the largest premium was offered by Virgin for West Coast Trains, which operates all inter-city trains out of London Euston. Virgin also secured Cross-Country, which is due to pay a small premium. Both franchises are for 15 years, and their whole train fleets are due to be replaced over the next three years. For rail passenger services to meet their costs in full, there must be strong political will for them to be profitable, and that users should pay 100% of infrastructure costs. Realistically, profitable routes would be busy routes between cities about two to three hours journey time apart. Virgin has had to raise 4000M from the private market, and needs to recover all its money and repay its premiums by 2012. Issues discussed in the interview include commuters' ability to pay in full, obtaining the right structure, franchise versus contract, walk-on versus yield management, and fast-track segregation.

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    Reed Business Information, Limited

    Quadrant House, The Quadrant
    Brighton Road
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  • Authors:
    • Green, C
  • Publication Date: 2000-1

Language

  • English

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Filing Info

  • Accession Number: 00790284
  • Record Type: Publication
  • Source Agency: Transport Research Laboratory
  • Files: ITRD
  • Created Date: Apr 11 2000 12:00AM