The government says it intends to take the East Coast rail service, run by National Express, into state ownership.The troubled rail franchise, which is expected to have lost £20m in the first half of the year, is suffering from falling passenger numbers. Ministers have refused National Express's requests for its contract with the government to be renegotiated.
The government says it intends to take the East Coast rail service, run by National Express, into state ownership.
The troubled rail franchise, which is expected to have lost £20m in the first half of the year, is suffering from falling passenger numbers.
Ministers have refused National Express's requests for its contract with the government to be renegotiated.
Rail crisis: London-to-Edinburgh route to be nationalised | Business | guardian.co.uk
It is the second time in three years that the owner of the east coast contract has walked away from its contract. GNER gave up the franchise in 2006 after admitting that its promise to pay the Department for Transport (DfT) £1.3bn over 10 years was too much. Undeterred, National Express bid £1.4bn for a seven-and-a-half year contract less than 12 months later. [...] The contract has become a financial millstone that is expected to lose the company £90m over the next two years. In order to meet its targets, the franchise requires passenger revenue growth of about 10% per year, but the latest figures showed a 1% increase in turnover as the recession hits demand and forces business passengers - a key earner for the route - to trade down to standard class tickets.
[...]
The contract has become a financial millstone that is expected to lose the company £90m over the next two years. In order to meet its targets, the franchise requires passenger revenue growth of about 10% per year, but the latest figures showed a 1% increase in turnover as the recession hits demand and forces business passengers - a key earner for the route - to trade down to standard class tickets.
And this from 2008:
National Express profits climb as rail booms
Booming demand for rail travel has allowed National Express to commit to raising its dividend by 10 per cent for the next three years. The bus and transport group, which today reported pre-tax profits up 44 per cent to £149 million, has seen passenger growth of 6 per cent in 2007, despite high-profile problems on the railway network and above-inflation increases in ticket prices. Shares in National Express climbed almost 4 per cent in early trading to £11.60, on the back of the results, which were slightly ahead of market expectations. The transport group, which has operated the high-profile long-distance East Coast business from London to Scotland since December, said that its confidence over the group's prospects, in particular its rail business, meant that it could commit to a 10 per cent a year increase in the dividend.
Booming demand for rail travel has allowed National Express to commit to raising its dividend by 10 per cent for the next three years.
The bus and transport group, which today reported pre-tax profits up 44 per cent to £149 million, has seen passenger growth of 6 per cent in 2007, despite high-profile problems on the railway network and above-inflation increases in ticket prices.
Shares in National Express climbed almost 4 per cent in early trading to £11.60, on the back of the results, which were slightly ahead of market expectations.
The transport group, which has operated the high-profile long-distance East Coast business from London to Scotland since December, said that its confidence over the group's prospects, in particular its rail business, meant that it could commit to a 10 per cent a year increase in the dividend.
Royal Mail sell-off plan is shelved - Yahoo! News UK
Part-privatisation of the Royal Mail will not go ahead as planned because of the depressed state of the economy, Business Secretary Lord Mandelson has announced.
There is, as yet, no sign that UK Govt has any concept of running railways as a public service. Merely as a profit centre. keep to the Fen Causeway
What he says they told the government is that in the event that the economic situation doesn't improve, they will be looking to hand over the franchise in an orderly way later in the year.
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Oh Mr Porter!One of my favourite lines in film is the response to Will Hay in the film "Oh, Mr Porter" when he arrives as the new station master at Buggleskelly station and enquires at the ticket office window... "The next train's gone!" ...shouts his new (in) subordinate as he slams shut the window. The Department for Transport must be feeling as bemused as Will Hay's character by yet another example of the "privatise profits, socialise losses" syndrome which occurred today when National Express decided to walk away from their franchise to the East Coast London to Edinburgh line. The reason is, apparently, that the economic downturn has blown a hole in their projected income as business travel in particular has collapsed. So what happens now?
Oh Mr Porter!
One of my favourite lines in film is the response to Will Hay in the film "Oh, Mr Porter" when he arrives as the new station master at Buggleskelly station and enquires at the ticket office window...
"The next train's gone!"
...shouts his new (in) subordinate as he slams shut the window.
The Department for Transport must be feeling as bemused as Will Hay's character by yet another example of the "privatise profits, socialise losses" syndrome which occurred today when National Express decided to walk away from their franchise to the East Coast London to Edinburgh line. The reason is, apparently, that the economic downturn has blown a hole in their projected income as business travel in particular has collapsed.
So what happens now?
Question to Dodo. I remember seeing a couple of Eurostars in service between London and York in GNER colours. Is there any reason why they should not run to Edinburgh and Glasgow? "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
But, the problem here doesn't seem to be the choice of train, but the business model. *Lunatic*, n. One whose delusions are out of fashion.
The leased Eurostars' Northern excursions were a relatively short episode, lasting from 2000 to 2005. Check some photos on RailFanEurope -- here is one, with a train in GNER colours:
*Lunatic*, n. One whose delusions are out of fashion.
