Posted 9th April 2013 | 14 Comments

East Coast managers not hungry enough, says Branson

VIRGIN founder Richard Branson has claimed that his rail team would make a much better job of running East Coast, because people employed by Government are not 'hungry' enough.

However, he has warned that the premiums paid to the DfT by a Virgin East Coast could be lower, predicting that although Virgin would make 'massively' more, it would invest a greater slice of its profits in upgrading rolling stock and other assets.

The DfT has started the competition to return East Coast to the private sector in February 2015, three months before the next General Election. Most other franchises were extended beyond the election on 26 March, including Virgin's current West Coast contract. This will now run until 2017 after initially being agreed as a stopgap management contract on 6 December last year in the wake of the collapse of the Intercity West Coast competition.

Sir Richard was speaking in Edinburgh at the launch of three new domestic Virgin air routes between London and Edinburgh, Aberdeen and Manchester, where he said of East Coast that "we would want to invest considerably in improving the track, trains, and speed times".

He continued: "The feedback we get is that East Coast passengers would like to see a change. We have years of experience in building companies, how to get people working for us really motivated and steamed up. If you just work for the government you don't get people hungrily trying to make a real difference."

He also made it clear that the legal challenge which Virgin mounted last year after the DfT announced that West Coast had been won by FirstGroup was not something he would want to see repeated in a future franchise competition, saying: "We have to be sure that the rules of engagement are different from last time."

The changing face of franchises has some disadvantages according to Sir Richard, who pointed out that a contract running only until 2017 would delay longer-term, major investment on West Coast. The Guardian has reported that he said: "We would have ideally liked to be able to bid for West Coast sooner."

Virgin's bid for the 15-year West Coast contract last year included plans for a new fleet of 'baby' Pendolinos, which would have replaced the diesel Voyagers on newly-electrified routes. This proposal is now on hold, but some additional routes do seem set to go ahead, with intercity trains planned for Blackpool in December. There have also been celebrations in the area after it was announced that the new through trains from London will call at Poulton-le-Fylde after all, subject to final tests.

Preston North and Wyre MP Ben Wallace said he had received confirmation of the rethink after a meeting with Virgin..

He told the Blackpool Gazette: “I am delighted that Virgin has listened and barring any technical difficulties will be including Poulton on the Blackpool to London line. I would like to thank all concerned residents who contacted me to highlight their concerns and also pass on their local knowledge to me."

Reader Comments:

Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.

  • PeterB, Cheshire

    I am very happy travelling as a fair paying customer on Virgin WCML from Manchester (south) or Warrington BQ (north).
    Why?
    - Fares I usually pay just over £76 for my first class ticket to London and back or could pay £52 for standard class, but then would pay just as much extra for the food, drinks, and wifi all included in the first class fare.
    - The on board service provided by staff who have been trained in the hospitality industry and who appear happy to wear the red uniform.
    My experience with other long distance companies is no where near as good - fares are about twice those I pay on Virgin (distance for distance) even booking in advance; and as for the service I have tended to feel that I was self-loading cargo interfering with their life if I needed to make contact(there are always exceptions) and the lukewarm coffee and a biscuit in first class doesn't match even the super off peak "snack pack" Virgin offering.

  • Marcus Burton, Derby

    I agree with Branson's point regarding East Coast management not being hungry enough. The recent BBC 2 railway documentary series (1st episode) was showing the management to be nothing short of a farce. How much of taxpayers money is spent keeping them in work, when there are probably hundreds of willing unemployed people on a dole queue who could do a better job.

    The railway is far too fragmented, don't renationalise, take it back to the 1923 grouping model. Four companies, with control over freight traffic, passenger traffic and the infrastructure (what's left of it anyway).

    But that might mean someone gets their sleeves rolled up and their hands dirty.

    Sir Nigel Gresley, Sir Ralph Wedgwood, Charles Newton and the LNER staff in general, would surely turn in their grave.

  • Claydon William, Norwich, Norfolk

    Branson should be disqualified from East Coast bidding IMO.

    We've all seen the astronomical fares charged by Virgin on 'West Coast' without rail competition,

    He should not be allowed to run East and West Coast franchises on anti-competiton grouinds. East and west Coast services should be naturally competetive.

  • Roger Collett, Darlington

    IF IT WORKS, DON'T FIX IT!!!!

    DOR are doing an excellent job on the ECML.
    Keep it as it is.

  • jack99, Oxford

    Mr Beard is like Worst Group - They are expert at creaming money off the Government with walking away from franchises when they cannot afford to pay back the Premium Payments and then getting rewarded with ' Management Contracts ' If the Govt has got any sense it should keep East Coast under its own control as its getting the profit anyway-the previous incumbent went broke and had to walk away. There's no point giving Mr Beard the East Coast as he will then have a monopoly on all the North South train services and the train fares will yet again rocket ( apologies to a very famous steam locomotive! ) as they have done on the West Coast. The Government should bring back all the Inter City services under its own control then we the Taxpayer get the Profits rather than the Bus operators.

  • Lutz, London

    @Mark, Crewe
    I agree; not sure how Virgin could win the ECML, while retaining the WCML, and being relate to an airline on the London-Glasgow route.

    Virgin is very good at attacking as a way of detracting attention from its own poor performance.

  • Tim, Devon

    I still say they should run a trial on the east coast of a new open access system. FirstHull, GrandCentral, EastCoast 225 and EastCoast HST would be the initial operators. Virgin and the rest can join in if they want. Timeslots on the railway could be auctioned off. Put everyone on an even footing.

  • David Haggas, Skipton

    Branson knows how to get employees steamed up does he? I'd be steamed up if if I worked on the ICEC operation knowing these clowns in government are going to let everything change yet again - this for the fifth time in less than 20 years. Watch them fail again.

  • Adam, Birmingham

    You can't have it both ways. The 390s (Pendolino) were designed to tilt thus allowing faster speeds on sections of the WCML. This has helped provide needed extra paths through the WCML along with quicker A to B speeds. Yes the seats don't all line up in Standard Class but you'd lose an estimated (mine) 20 seats per standard coach if they did which would limit the capacity of a 9 car/11 car 390

    Now Virgin wanted the 220s (Vogayers) and 221s (Super Voyagers) to be longer but were overruled by the DfT who saw operation Primcess as the solution so the blame has to be shared here

    XC could run all of their HSTs but don't because they cost a lot more in track access costs so they mainly sit around in sidings whilst the Voyagers run around full

  • Gordon, Lincoln

    Does anyone else think that Branson and Virgin are past their best? Both could do no wrong in the 90's but what success is actually left within the empire? Virgin Atlantic lost between £1-2m a week in 2011, and even the breathlessly PR'ed domestic routes will be run by Aer Lingus, minus the Virgin paint and uniforms.

    He has improved the West Coast but i suspect Network Rail deserve much of the credit (alongside the humble taxpayer of course). Granted the trains are amongst the newest in the country but you'd never know it if you made the jump from any of the East Coast stock.

    I find it a wonderful irony that the government-run East Coast seem to have prospered following the chaos of the East Coast franchising only a few years ago. They're not perfect by any stretch but they generally provide a stong service on decent rolling stock across the recently beefed-up timetable, all benefiting from the new First Class offering of course - a genuinely impressive product considering the prices if booked in advance.

    Though inevitable, i'm not looking forward to another large company taking over as they don't have the best record on the East Coast do they? I suspect it's exactly the insatiable 'hunger' that Branson mentions that helped bring the two franchisees to their knees in the first place...how refreshing to have a couple of years pause....

  • Paul Hepworth, YORK

    I personally find the Pendelino's standard class very cramped and confined from both legroom and window view perspectives. Cross Country have taken over routes from Virgin, but have inherited the Voyager stock with its similar problems, exacerbated by only 4 or 5 coach trains and poor luggage space.
    XC have tried to do what they can, to the extent of leasing a few HST's for their busiest services.

  • Chris, London

    To me Virgin's track record on rail is marred by their introduction of ergonomically deficient rolling stock, the introduction of a hopelessly unworkable CrossCountry timetable (remember Operation Princess?) and causing gross overcrowding on CrossCountry, not through market growth but through the provision of woefully inadequate capacity on these services.

    I wonder how much of the investment in 'other assets' ends up as money heading out of the rail business to Virgin Group in order to lease the rights to use the Virgin brand? Does this even end up in the UK, or in a tax haven abroad somewhere?

  • Tim, Devon

    Travelling on a Virgin train going hungry is often the best choice.

  • Mark, Crewe

    Surely Virgin running both the east coast and west coast franchises would be subject to a monopolies and mergers commission finding, personally i dont like the idea, as its sewing the anglo scottish routes up to one company and ultimatley it will be the passenger that would pay for such a monopoly.