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Lucy Tobin: It looks like the end of the line for Virgin Trains

Bob Crow described the franchise as a 'one-way ticket to the bank' for Sir Richard

Lucy Tobin
Wednesday 15 August 2012 22:23 BST
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What looks like the end of Virgin Trains' involvement in running Britain's railways won't just affect commuters: it could also force Sir Richard Branson to cut back on fripperies like kite-surfing and submarines.

For the Virgin boss has taken more than £200m out of Virgin Trains since taking over the West Coast Mainline franchise, a joint venture between Sir Richard and quoted transport company Stagecoach.

Last year alone, Sir Richard banked £15m from dividends from the franchise. In total, his Virgin group has totted up £204m in dividends, despite Virgin Trains – which has operated the route from London to Glasgow since 1997 – only starting to pay dividends to its two shareholders in 2004.

In the past, Sir Richard has claimed its payout rewarded the "risk" it took in running services on a line that suffered major engineering problems when it was taken on. The joint venture grew profits and passenger numbers – more than doubling passengers to more than 30 million.

Since taking over the route, passenger numbers have increased by more than 9 per cent a year on average, beating a UK-wide compound annual growth of about 3 per cent. Virgin Trains paid the government £160m to run the line last year, the highest in the industry for a rail operator, but in previous years had pocketed state subsidies totalling more than £1.4bn.

But Bob Crow, general secretary of the RMT trade union, has described the franchise as a "one-way ticket to the bank" for Sir Richard.

Yesterday, the entrepreneur all but ruled out a return to the railways, saying the bidding process was too costly and uncertain.

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