Virgin become first TOC to announce falling revenue

[Failed Unit]

Virgin cannot ORCATS raid the WCML!

No they can't but they can raid Northern and London Midland.

That Crewe to Manchester train is taken revenue away from Northern and ATW. Likewise that extra Coventry - Birmingham train is taking revenue away from London Midland.

Like it or not London Midland and Chiltern get a share of the revenue on London - Birmingham pot for open returns. The 3rd service increases that share.

So no Virgin can raid the WCML, but they can certainly still raid other operators!

An extreme example of companies ignoring market research. Ryanair surveys show people didn't want them to charge to store baggage in the hold, they ingored it and still make lots of money - no mass moves to competitors here, no sign of ryanair going out of business for ignoring surveys. It is the least popular airline in all research - but is also the most profitable so please don't tell me you run your business into the ground if you ignore surveys. National express are not going to bankrupt themselves for ignoring customer feeling about thier catering cutbacks either! They may lose revenue but they will not go under!

 

[Metroland]

Connected, but a different company:


Bus and train operator First Group has revealed plans to cut 3,500 jobs at the company by March 2010.

In a pre-close trading update published on Thursday (20 March) the company said the reduction in headcount would help it achieve cost savings of £200m. Around half the jobs to be cut will go at First's US operation, which includes the Greyhound bus business. Some 600 posts are slated to go at the company's rail division, which includes the Scotrail, First Great Western and First Capital Connect franchises and a stake in the TransPennine Express venture run in partnership with French transport firm Keolis.

First hopes to achieve many of the job cuts through a freeze on the recruitment of many roles and natural wastage. However, staff at the First Capital Connect franchise, which runs the Thameslink service between Brighton and Bedford, voted in favour of strike action this week after the firm refused to rule out compulsory redundancies.

The company said its British bus and rail divisions would both achieve like-for-like revenue growth of more than 7% in the year to the end of March, while its US Greyhound bus operation would deliver an increase in full-year profit despite falling demand. The transport group reduced mileage and cut costs at Greyhound earlier in the year.

First admitted that the economic downturn was having a negative impact on its rail franchises, which rely on increasing commuter numbers, but any drop in passenger numbers will be mitigated by revenue support from the Department for Transport. First Great Western currently receives revenue support of 80% from the DfT for any shortfall in revenue compared to the franchise payment profile. A similar revenue support deal will apply to the First Capital Connect franchise from 1 April.

Financial markets responded strongly to the trading update with First shares up 21% at one point on Thursday. The group, Britain's largest bus operator, said it expected its bus division to achieve like-for-like revenue growth of 7.3% in the 12 months to the end of March 2009. Like-for-like passenger revenue growth in the rail business was set to rise 7.6% year on year with passenger volumes up 4%.

http://www.transportbriefing.co.uk/story.php?id=5732

 

[tbtc]

3tph to me is not needed off-peak

I think that when the BBC move hundreds of staff to Salford, the demand will be there for the third train each hour, no bother.

Plus, as well as being a third service to Manchester, it's also mopping up passengers for London journeys from places like Crewe, meaning services to/from Liverpool etc can be speeded up.

As for the comment about ORCATS, I think that the Pendalino is much preferable to the "local" trains for journeys like Crewe - Manchester or Coventry to Birmingham; more seats, faster journey etc.

 

[MKB]

It's interesting that the 0.6% drop in revenue compares June 2007-March 2008 with June 2008-March2009.

I travel regularly on Virgin, and my own anecdotal experience is that passenger numbers were considerably up last summer and autumn, and dropped dramatically after that. In fact, on umpteen Virgin trains I've been on in 2009, only one has been more than half full, and most have been considerably less than that, with first class nearly empty.

I suspect that Virgin are releasing ten-month information so that they can include last summer's numbers in the figures to hide quite had badly they are doing right now.

The Birmingham-London services outside of the peak hours are particularly underused, the Manchester-London ones slightly less so. That's my consistent experience on these routes of late. Quite how Virgin can justify three trains per hour in the off-peak on these routes while withdrawing services that would provide connections in Crewe, Stafford, Tamworth, Nuneaton, Rugby and Watford Junction, remains a mystery. I think VHF may well prove to be Virgins Trains' undoing.

 

[350401]

Went to London for the day today (Wilmslow - London), which was my first taste of VHF and the new 'full speed' WCML. Observations -

The Speed is *very very* good. Caught the 7am train, was there by 8.55. I remember the days when I had to catch the train at 6am at Wilmslow to be deffo in London for 9am. Big Improvement. It is well used at Wilmslow - a good 70 or so people were on the Platform for the 06.59. Even so, right now there seems to be more capacity than demand - the train turned up at Wilmslow nearly empty - presumably pax from Stockport/Manc caught the 2 earlier ones down the Stoke Line. Despite stopping at Crewe and Stafford, I had 2 seats in the STD quiet coach to myself. Massive change to pre-VHF.

Coming back, the speed blew me away - 1hr 45 EUS-WML is unbelievable. However, making all trains between 15.15 and 18.30 peak and thus not allowing savers is clearly not needed. The 15.40 to Wilmslow was virtually empty. There were 5 people maximum in my coach. De-restricting it to allow use of Savers would encourage it to be used more IMHO. Still, I'm not complaining thanks to Virgins policy of allowing Savers with railcards to be used! I reckon they risk loosing custom through such a policy - people with Savers *could* use the xx.46 LM to Crewe and Change onto a Wilmslow/Stockport train there. Longer but allows use of savers, which given the price differential between Savers and Anytime Fare is probably worth it?

 

[furryfeet]

could it be that the already high cost of walk-on fares, coupled with the steep increases in both walk-on fares AND apex fares after Dec 2008 are driving people into their cars ?

 

[MKB]

In my case, it's the hugely increased journey times that have forced me back to my car for many journeys. NUN-LIV at the times I need has risen from 80 minutes to 2 hours. Factor in the time getting to/from the station each end, and the car is now much quicker.

 

[bengolding]

I agree with you on the ludicrously increased journey time from Nuneaton to Liverpool (in my case, to Crewe). The current xx16 LM meanders around Stoke - even changing at Stafford onto a BHM-LIV train arrives into Crewe quicker. The 06:38 Virgin to Liverpool is simply too early, and stupid timetabling means that the first train fromthe East Midlands now misses that by 5 mins. Prior to VHG, the 08:22 VT to LIV was hugely popular. Now thal all Euston-Liverpools run non-stop to Stafford, why can't one or two stop additionally at Nuneaton at reasonbale times?