Posted 26th January 2011 | 4 Comments
‘We remain extremely proud’ as Wrexham trains end
Managing director Andy Hamilton: praised by chairman Adrian Shooter
WREXHAM & Shropshire has confirmed that its trains will cease running with the departure of the 18.30 from London Marylebone to Wrexham General on Friday this week, after revealing that its revenue has only covered two-thirds of its costs, and that it lost £2.9 million in 2010 alone.
In a statement, the company said that the ‘unprecedented economic environment’ has been a contributing factor.
It said although it had strived to increase passenger numbers on its open access services, it had decided that the business ‘has no prospect of reaching profitability.’
The company added that it was not insolvent, nor was it being placed in administration, and all outstanding financial commitments would be met.
It’s now looking for new jobs for its 55 staff, and all wages and redundancy entitlements will be paid.
The company added that it had tried to move the business into profit. In 2009 the original service of five trains per day was reduced to four, which became three in December. An agreement had been reached with sister company Chiltern Railways to assist with their capacity. The company also ‘investigated opportunities for operational and management synergy between Wrexham & Shropshire and Arriva Trains Wales’, which is also owned by the majority W&S shareholder Deutsche Bahn.
Chairman Adrian Shooter explained: “Regrettably, we have concluded that the potential for further changes to the company's operations, including any synergy with Arriva Trains Wales, will not improve the financial position sufficiently. The shareholders have invested in excess of £13 million in launching the business and funding its losses, and have now concluded that there is no reasonable prospect that Wrexham & Shropshire can become profitable, or offer a return on this investment.”
Mr Shooter added: “Even though we are forced to close the business, we remain extremely proud of what we have achieved with Wrexham & Shropshire; with many stating that we set the standard for all other train companies to follow. I would like to pay tribute to Andy Hamilton, Managing Director, and everyone in the Wrexham & Shropshire team. Our people are the best in the business and have set the standard for others to follow.”
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Gary, Manchester, UK
This was an open access operator which received no government funding, so it had to turn in an operating profit to make it viable. If you look carefully at the " performance factors " published by Passenger Focus, W&S scored some high marks in relation to customer service - in particular availabilty of seats, which was due to the fact that the trains were half empty.
The reason they were half empty is because of the time it took to get to London - which scored W&S a lot lower in the survey. I suspect the original business plan took no account of this, as passengers nowadays are looking for a way to get from A to B in the quickest amount of time - its is often quicker to change at a station en route rather than go direct on a multi stop service.
No doubt rail travel has been a big success in general over the last few years or so, but this has only been brought about by a combination of serious government funding, and some calculated investment form the private sector.
The level of government funding just now cannot be sustained in the future - and will therefore need big business to help. Its no coincidence that the current supply of franchises are actually in the hands of just 3 or 4 conglomerates ( D Bahn , First Group etc ).
Lorentz, London
It never really had a chance - Branson and Virgin saw to that - but it was a brave effort and their website was one of the best.
Philip Russell, Carlisle, United kingdom
This is very disappointing and sad news and i hope all staff that want to stay working on the railways can be found other jobs very soon ,the fact that this company could not call at Wolverhampton or Birmingham New Street stations two major population centres because of competition red tape rules to do with Virgin must surely have been a major financial penalty from the start and surely it would have been cheaper to operate this service with say a class 158 or similar unit rather than a class 67 loco
Joel Kosminsky, London, Britain
How can a passenger service be allowed to close down 'just like that', even one with performance factors in the high 90s - more proof of trains only running for money... We need more services, more alternative routes; airlines invest for years in new routes and equipment, we give it five minutes and now not even to the next AGM.