VIRGIN Trains saw its revenue from fares increase 11% to £753 million last year, amid continuing passenger growth on services between Scotland and London.
The company said its above-expected earnings will mean it will pay £110m to the Government as part of its franchise deal to operate passenger services on the West Coast Main Line.
Passenger numbers have grown from 13.6 million a year when Virgin Trains took over the West Coast franchise 14 years ago, to 28 million, thanks largely to a £9 billion upgrade completed in 2009.
As part of the franchise agreement, Virgin Trains, which is jointly owned by Stagecoach and Virgin Group, pays the Government, or can receive a subsidy, if actual revenues exceed, or fall short, of those anticipated. Last year, it received a Government subsidy of £20m.
The announcement yesterday came a day after it emerged that about half of UK rail fares, including those on cross-border services such as Virgin’s, could go up by an average of 8% from next January. Fares in Scotland will rise more modestly by 6% due to different policies being pursued by Westminster and Hollyrood.
Pre-tax profits dropped to £55.7m from £69.4m after the Government’s payment.
After-tax profits also fell by 21% to £39.9m, out of which £6.5m is being held back for investment and £32.5m was paid as dividend to Stagecoach and Virgin Group.
As well as higher fares, the company said it had gained market share from airlines between Manchester/Glasgow and London.
Virgin Trains is attempting to retain the West Coast Mainline franchise.
Chief executive Tony Collins said: “Our partnership approach with the Department of Transport has seen passenger numbers grow faster than the market over the past six years.”
Meanwhile, 300 First Transpennine Express drivers have voted to strike on August 24 and 26 in a pay dispute. It operates between Scotland and Manchester.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article