Stagecoach and Virgin Trains

[Joshrowlands]

I was just wondering why is virgin trains west coast franchise made up of 49% Virgin rail group and 51% stagecoach?

Don't a massive global brand such as Virgin have enough money to buy out stagecoaches steak?

And why do they even need stagecoach? They know how to run trains and airplanes, record labels, entertainment etc what is the point in stagecoach?

I guess what I'm trying to say is Virgin has more than enough recourses and money to run Virgin trains ec franchise on their own so why don't they and then they'd have 100% of the profits instead of having to share with stagecoach it doesn't make sense to me?

Any information would be great guys
Ps no stupid answers about Virgin being this or that or Richard Branson being this or that or calling me stupid, I'm new to all this just curious

And yes I know I can google it but Google can't give me expert answers like people on here can and also go In to detail like people do on here

 

[Bigfoot]

Virgin is a brand. Stagecoach have the knowledge to run transport services. Many, many busses in UK and North America. East Midlands Trains, South West Trains and from March the East Coast Franchise. A big (admired by most) brand facade underpinned by people who know what to do to run a train service.

 

[E-Rail]

West Coast Trains Ltd which holds the ICWC franchise is owned 51% by Virgin Group and 49% by Stagecoach Holdings. Virgin's stake was originally a lot higher when first launched in 1997 but they soon ran into trouble both management wise and financially. Stagecoach, who had also been shortlisted for the franchise themselves in 1996 bought into the company in 1998 and for a while applied quite a bit of pressure in an attempt to have the company rebranded as Stagecoach Intercity or something similar as they saw the Virgin brand as tarnished and a liability.

I cant ever see Branson parting ways with Stagecoach. They provide the management, market and transport expertise. Virgin is nothing more than a brand. If anything, Stagecoach would be more likely to increase its share in West Coast Trains than the other way around.

I could be wrong but I am fairly sure Virgin were OPRAF's second choice in 1997 and that Sea Containers were the preferred bidder up until quite a late stage, however James Sherwood was unhappy with the process regarding the WCML modernisation. There was also political pressure from Scottish MPs not to award both ICEC and ICWC to the same company, Sea Containers having already taken over East Coast in 1996.

 

[rdeez]

A lot of other Virgin branded companies run on a similar basis, being only part owned by Virgin, or not at all (in the case of Virgin Media).

Basically, Virgin's involvement is as Bigfoot said about the brand first and foremost. It's well known and global. By not owning the companies outright, Virgin can earn money from licensing their name without full responsibility and liability.

 

[WatcherZero]

Its Virgins corporate strategy, serial entrepreneurship. they launch a company and wait a couple of years until its established then sell off a majority stake and use the capital to establish a new venture and so on. Not all companies are sucessful e.g Virgin Brides but you often only have to get one runaway success to make half a dozen flops worthwhile and for the most part Branson has had few flops.

Virgin media is because there was a cable company which merged with a rival (Telewest and NTL) and then bought Virgin Mobile to become a 4x media company, they then licensed the continued use of the Virgin brand and applied it to the cable operations too.

 

[Bigfoot]

Also it is 51% Virgin 49% stagecoach

 

[dk1]

Also it is 51% Virgin 49% stagecoach

Beat me to it. Yes Virgin has the controlling stake.

 

[ECML180]

Basically, what everyone else says. In corporate strategy there are two options for expanding: Positioning (I can make money in that industry - but no idea how to) and Portfolio (I can run that kind of company - but might not make massive profits). Virgin basically operates on Positioning as they are really a great big marketing company with an airline on the side, they really are simply a brand. Stagecoach on the other hand, along with most UK based bus companies, uses Portfolio and expands into adjacent and similar markets. For example starting with UK bus, then a bit of coach, then some rail, then EU/US bus too.

In the end - Virgin provides the brand and the 'flashyness', Stagecoach does the nitty gritty and actually makes the trains run on time, after all they are the partner with the expertise there.

 

[KX03HZY]

Its Virgins corporate strategy, serial entrepreneurship. they launch a company and wait a couple of years until its established then sell off a majority stake and use the capital to establish a new venture and so on. Not all companies are sucessful e.g Virgin Brides but you often only have to get one runaway success to make half a dozen flops worthwhile and for the most part Branson has had few flops.

Virgin media is because there was a cable company which merged with a rival (Telewest and NTL) and then bought Virgin Mobile to become a 4x media company, they then licensed the continued use of the Virgin brand and applied it to the cable operations too.

Gosh I remember Telewest! They had a depot near me. Virgin Atlantic is also a joint venture, 49% owned by Delta

 

[glbotu]

This is what Rolls-Royce do.

Rolls-Royce haven't made a car in decades, they only make turbine engines (for aeroplanes and powerstations). They licence the car brand because it's well known for its flashiness.

They probably could go back to making cars, but that involves a risk. Branding some cars made by BMW is practically risk free.

 

[Emyr]

Virgin Galactic is a Virgin join-venture with Scaled Composites, an experienced aeronautics company led by the legendary Burt Rutan.

Richard Branson might have business nouse matching or beyond that of our beloved Lord Alan, but he's not a technological genius like Elon Musk (PayPal made him famous, now he owns SpaceX and Tesla Automotive).

 

[OpsWeb]

The public brand of Virgin is great, but the actual reality of Virgin companies is a bit different.

Virgin has always been a marketing driven company, where as when it comes down to £££ and corporate accounting - it's not a great company to be involved with.

By comparison with other transport operators, they make pence in almost all sectors they work (aviation, train etc...), and they suffer from fairly bad operational issues. But being a strong brand - customers still "love" them.

Stagecoach has always been an operationally driven company (which some may say lacks customer focus).

 

[47802]

This is what Rolls-Royce do.

Rolls-Royce haven't made a car in decades, they only make turbine engines (for aeroplanes and powerstations). They licence the car brand because it's well known for its flashiness.

They probably could go back to making cars, but that involves a risk. Branding some cars made by BMW is practically risk free.

No it isn't, Rolls Royce went bankrupt in the early 1970's under the crippling development costs of the RB211 engine, The government nationalised it and split the car division off and sold it to Vickers, the aero division as a totally separate company was eventually privatised as a PLC.

Later VW got hold of the Bentley/Rolls Royce car factory and the cars, in fact everything except the Rolls Royce Brand name which BMW got as result of the aero company having some licencing rights to the name, but overall, has very little to do with how Virgin operate

 

[sonorguy]

Virgin Galactic is a Virgin join-venture with Scaled Composites, an experienced aeronautics company led by the legendary Burt Rutan.

Richard Branson might have business nouse matching or beyond that of our beloved Lord Alan, but he's not a technological genius like Elon Musk (PayPal made him famous, now he owns SpaceX and Tesla Automotive).

Not any more it isn't. Virgin Galactic 'fired' Scaled Composites a couple of weeks ago, following the accident and are now building the replacement vehicle in house.

Burt Rutan hasn't had anything to do with SC for a number of years now, he retired in 2011. SC itself is now just a division of Northrop Grumman and isn't really anything special.

 

[Emyr]

Not any more it isn't. Virgin Galactic 'fired' Scaled Composites a couple of weeks ago, following the accident and are now building the replacement vehicle in house.

Burt Rutan hasn't had anything to do with SC for a number of years now, he retired in 2011. SC itself is now just a division of Northrop Grumman and isn't really anything special.

In which case I'm definitely on Team SpaceX.

 

[Llanigraham]

And why do they even need stagecoach? They know how to run trains and airplanes, record labels, entertainment etc what is the point in stagecoach?

I think you will find that each "element" of the Virgin brand is a separate company, with very little connection between them.

 

[fairysdad]

And, of course, the East Coast franchise is to be held by a company that is only 10% Virgin and 90% Stagecoach.

 

[WatcherZero]

Not the full story. Virgin bought out Scaled Composites stake in the joint venture two years ago and the agreement was always that Scaled would build the prototype while Virgin would build the serial production units (original contract was Virgin would begin production of serial units in 2008). Since the loss of the first prototype the second unit which was to be the first production unit and already half completed by Virgin has now become the second prototype.

The idea that Scaled was 'fired' was just made up by the Daily Mail

 

[AnonymousUser1]

A lot of other Virgin branded companies run on a similar basis, being only part owned by Virgin, or not at all (in the case of Virgin Media).

Basically, Virgin's involvement is as Bigfoot said about the brand first and foremost. It's well known and global. By not owning the companies outright, Virgin can earn money from licensing their name without full responsibility and liability.

that's the upshot

in the case of the UK rail market it also hides the fact that stagecoach control three of the principal main line routes WCML+ ECML (from 1/3/15) as vermin and MML as the Stagecoach branded EMT

 

[Bigfoot]

Haters gonna hate!

 

[Greenback]

I've edited the title for you Josh so that it's easier for members to see what the thread is all about.

 

[ECML180]

Haters gonna hate!

Careful!

http://lancasteronline.com/news/loc...cle_4fb4dc6c-ad51-11e4-add3-abc8a77dd23d.html

 

[LNW-GW Joint]

Virgin's stake was originally a lot higher when first launched in 1997 but they soon ran into trouble both management wise and financially.

No, Virgin has only ever had 51% of Virgin Trains.
The other 49% was initially owned by private venture partners, who subsequently sold their stake to Stagecoach.

 

[Stats]

Virgin's stake was originally a lot higher when first launched in 1997 but they soon ran into trouble both management wise and financially.

No, Virgin has only ever had 51% of Virgin Trains.
The other 49% was initially owned by private venture partners, who subsequently sold their stake to Stagecoach.

Neither is correct. Virgin only owned 41% of Virgin Trains when it was set up with private equity owning 59%. Stagecoach acquired the private equity stake in 1998 and gave 10% to Virgin.

 

[dk1]

Neither is correct. Virgin only owned 41% of Virgin Trains when it was set up with private equity owning 59%. Stagecoach acquired the private equity stake in 1998 and gave 10% to Virgin.

You learn something new everyday.