Southern Rail owner warns of profit hit from strikes

Go-Ahead group said costs of dealing with industrial action would be higher than expected

Passengers queue for a reduced Gatwick Express service during the Southern railway strike at Victoria (Reuters)

Southern rail’s main owner Go-Ahead Group said that it expects its profits to be hit by the strike action that has caused travel misery for millions of commuters.

Go-Ahead forecasted its GTR division, which runs Southern rail, to suffer a 4 per cent decline in passenger revenue since the last half-year. GTR services continued to be “heavily impacted by industrial action” and passenger numbers are expected to have dropped by 2 per cent in the last six months, the company said.

No services ran on Southern rail on Tuesday and Wednesday this week due to strikes, with further industrial action planned for tomorrow and next Monday and Tuesday. Members of ASLEF, the UK’s union for train drivers and operators, and transport union RMT have staged multiple walkouts since April over plans to implement driver-only trains.

RMT’s General Secretary Mick Cash described Go-Ahead as a “money-raking disaster” when the company announced an annual profit of just under £100m in September. Go-Ahead chief executive David Brown has previously said that the company makes a loss on its GTR services.

Go-Ahead has a 65 per cent stake in Govia, the subsidiary that controls the GTR, Southeastern and London Midland franchises. French transport company Keolis owns the remaining 35 per cent. The company said that it expected its Southeastern and London Midland franchises to see a 2.5 per cent and 5.5 per cent increase in passenger revenue in its half-year results.

“The GTR team continues to work towards a resolution to these issues and provide the best possible service to customers under the circumstances. In doing so, we expect to incur additional costs in this financial year,” Go-Ahead said in a statement released on Thursday.

Go-Ahead’s shares opened 2.25 per cent lower on back of the results before recovering into positive territory later in the day.