Virgin Rail Group (VRG), which operates Virgin Trains, has signed an agreement with the Department for Transport (DfT) to extend the current West Coast franchise. The franchise was due to expire at the end of March 2012, but will now be extended until 8 December 2012.
The deal means that new trains and carriages will be introduced to help continue growth on West Coast, where the number of customers has more than doubled in the last seven years, from 14m in 2004 to around 30m in the current year. Despite the recession, in the last three years Virgin Trains has been the fastest-growing operator, with annual growth above 10per cent, following big timetable improvements in 2008.
Under the extension agreement, Virgin Trains plans to add two Standard carriages to each of 31 existing Pendolino trains between April and December 2012, as well as four new trains.
The agreement is based on a forecast of 11 per cent year-on-year growth – more than three times the long distance operator average - and is very challenging given the current economic climate. Work on introducing longer and new trains is not due to complete until December 2012, with the full benefits not being realised until the start of the new replacement franchise starting on 9 December 2012.
The deal, which covers any shortfall on DfT revenue targets through an 80 per cent revenue support agreement or any excess through an 80 per cent revenue share, will see Virgin Rail Group make a premium payment to the Government for the eight months.
The new trains and carriages will add 150 extra seats to the 294 Standard seats currently on each of these trains. First Class accommodation will remain the same as now. In addition, it is planned to commission four new 11-carriage trains into the Pendolino fleet next year, each providing almost 600 seats per train in Standard and First Class.
The first of the extra carriages are set to be introduced next Spring and more carriages will be introduced gradually during the eight months of the extension as they are delivered into the UK from Italy, where they are being built by train manufacturer Alstom.
When all 106 carriages are introduced, from the start of the new franchise in December 2012, the number of Standard seats in the 56-strong Pendolino fleet will increase by more than 40 per cent. Some 28,000 extra seats will be available every day - more than 10 million extra seats a year. Work will now begin to train and prepare staff for the new and longer trains.
The franchise agreement also means that Virgin Trains will continue its service beyond the 2012 London Games, maintaining the quality of service that has won 90 per cent customer satisfaction ratings, the highest of any long-distance franchise. This month, Virgin Trains received its latest award, the British Quality Foundation’s Achievement Award for Customer Satisfaction.
VRG, a joint venture between Stagecoach and Virgin Group, has already pre-qualified to bid for the new Intercity West Coast rail franchise. The Government has confirmed that the new franchise will start on 9 December 2012 and run until 31 March 2026, with an option to be extended by up
to 20 months.
Virgin Rail Group Chief Executive Officer Tony Collins said: “We are delighted to have worked in partnership with Government to agree this extension to the current West Coast franchise. It is great news for passengers and will also deliver value for money to taxpayers.
“The extension will bring continuity and allow us to run services for passengers at an exciting and challenging time for the country with the 2012 Games which start in July next year.
“Virgin Trains is delivering industry-leading levels of customer satisfaction and annual passenger numbers have grown from 14 million to around 30 million in just seven years. This reflects the high quality of service and investment in new trains and improved infrastructure, which has hugely benefitted customers using the backbone of the UK rail network.”
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