Richard Branson's Virgin Group late last week unveiled plans to increase ticket revenues four-fold on west coast main line InterCity services, following the award of a 15-year franchise. Virgin intends to revive the ailing line between London and Scotland with a £600 million investment in tilting trains to reduce journey times, and a £200 million spend on improved stations and a telephone sales centre.
The company plans to introduce seat-back video screens when it brings in the new trains in 2002, to provide airline style services for passengers and fixed price, pre-booked taxis from home to selected stations. It will introduce a wider range of fares, including discounted tickets and a business class which will emulate its airline business class category.
'Travelling up the M6 will soon be seen as a thing of the past,'' Branson said. ''We would be happy to see the motorway grassed over and turn the service stations into entertainment complexes.'' Virgin has taken on a very tough financial commitment to convert a subsidy of £77 million in year one of the franchise to a premium payment of £ 220 million for the privilege of running services in 2011.
This premium is similar to current ticket revenues of £219 million.
But Virgin said there were plenty of opportunities to develop business on the line, which has suffered from underinvestment, improvements in air travel, the completion of the motorway network and competition from the fast east coast line.
'This is not rocket science,'' said Will Whitehorn, a director of Virgin Rail.
'These numbers are perfectly achievable. We plan to grab market share from the airlines on this route, including British Airways.''
Virgin's investments will go hand in hand with a £1.5 billion spending programme by Railtrack, which manages track signalling and stations, to upgrade the 550-mile route, which links London - via Birmingham, Manchester and Liverpool - with Glasgow.
The 40 tilting trains will be capable of up to 225kph. Speeds will be limited to 200kph from 2002 but if Virgin and Railtrack can agree on further track improvements, which might be financed by a revenue sharing deal, the maximum speed could be reached.
Save our Railways, which has opposed rail privatisation, welcomed the announcement of improvements but said if British Rail had been given the money to carry out its planned modernisation, trains would already running at up to 250 kph.
Aslef, the drivers union, is threatening strike action against Eurostar, which operates cross-Channel trains, if the company does not give its train managers a wage increase in line with the 21.4 per cent secured by the drivers this week.
