Branson downbeat on Virgin Trains future after losing last franchise

By Daniel Farey-Jones, marketingmagazine.co.uk, Wednesday, 15 August 2012 09:41AM

The future of the Virgin Trains brand looks uncertain after it lost its remaining franchise this morning to rival FirstGroup and Virgin founder Sir Richard Branson cast doubt on whether it would bid for any more rail lines.

Branson took the Virgin brand into rail in 1997, winning the West Coast franchise, which was today (15 August) awarded by the Government to FirstGroup for 13 years and four months, with an option to be extended to 15 years.

First West Coast will take over from Virgin Trains on 9 December, having outbid Virgin with a pledge to pay the Government £5.5bn to run the franchise.

Bids were also submitted by two other parties, Abellio InterCity West Coast Limited – NV Nederlandse Spoorwegen, and Keolis / SNCF West Coast Limited.

In a carefully-worded statement, Branson cast doubt on whether Virgin would bid for another franchise, criticising the Government's track record on awarding tenders to the highest bidder.

He said: "Based on the current flawed system, it is extremely unlikely that we would bid again for a franchise.

"We have made realistic offers for the East Coast twice before, which were rejected by the Department for Transport for completely unrealistic ones and therefore will have to think hard before embarking on another bid.

"This is the fourth time that we have been out-bid in a rail tender. On the past three occasions, the winning operator has come nowhere close to delivering their promised plans and revenue, and has let the public and country down dramatically."

However, a Virgin Trains spokesman claimed it was still possible the company would bid for another franchise, citing the East Coast mainline.

This line is expected to be tendered in January 2013, according to the Department for Transport. It is in temporary Government hands after the state took the franchise back from National Express in 2009.

The Virgin Trains spokesman said it was too early to comment on the future of the brand's marketing department, which is around 20 strong and is led by Annerie Hughes as head of marketing.

The brand works with advertising agency Dare and promotional agency Elvis.

Branson claimed that over the 15 years Virgin has run the West Coast franchise, passenger numbers have more than doubled to 30 million.

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This article was first published on marketingmagazine.co.uk