In bringing an ambitious and challenging vision for future rail travel to the reality of a rail revolution which has transformed its West Coast and CrossCountry franchises in the space of seven years, Virgin’s first great achievement was to break the vicious circle on West Coast funding to kick-start modernisation.

The company knew that future UK transport growth would have to look to rail and rightly saw the West Coast as having the greatest potential for both passenger and freight growth. A visionary solution for the West Coast as the flagship for privatisation was widely called for. The then franchising agency OPRAF matched this mood with a tender document challenging West Coast bidders to deliver a 125 mph tilting railway providing half-hourly services between London and Manchester.

Virgin won the competition in 1997 with a highly innovative bid which went further than the OPRAF tender. It proposed to deliver a 1 hour 50 minutes journey from Manchester to London using tilting trains running at 140 mph to which the former Railtrack would be committed through a revenue share deal.

Virgin’s prime achievement was to at last secure funding for West Coast modernisation. Also, the company persuaded Angel Trains to fund a £600 million fleet of 53 new trains and Railtrack to commit a further £2 billion to upgrading track, signalling and electrification. Virgin would then fund the resulting increases in annual train leases through the additional passengers attracted to the new services.

Virgin’s second achievement was to restore national confidence in tilting trains by buying a proven design running reliably in eight other countries and adapting it to run successfully in Britain. It’s third achievement was to conceive an outstanding train design in the shape of Pendolino which caught the imagination of the nation as a 21st Century icon for the UK rail industry.

Virgin also won the CrossCountry franchise in 1997 with a mission to deliver a world class travel experience by 2003. Probably the least known of all Britain’s inter city services, the network linked 115 towns and cities from Aberdeen to Penzance and was carrying 16 million passengers each year – the same as West Coast.

Virgin was quick to spot CrossCountry’s full potential as an opportunity to create a regional network of high-frequency, high speed services across the UK from a rather rambling network of ageing trains. It considered that CrossCountry had for too long been allowed to remain as the Cinderella of the rail network and its Operation Princess transformation within six years proved to be one of the most exciting rail developments of the decade.

In committing to replacement of the entire cascaded and tired train fleet with £1 billion’s worth of 78 state-of-the-art 125 mph Voyager and Super Voyager diesel trains, 44 of which are able to tilt, Virgin brought the first ever brand new trains to CrossCountry. They were built by Bombardier in a contract which included ongoing maintenance for the life of the franchise. With Operation Princess in 2002, Virgin took the radical step of abandoning the existing irregular services and replacing them with the first ever clock face timetable across the UK. This nationwide timetable offered a combination of speed and frequency to draw motorists from the parallel motorway networks and give fellow train operators the opportunity for more space and flexibility.

Co-operation with the erstwhile Strategic Rail Authority brought fine tuning of the regular pattern to unlock capacity at bottlenecks to allow more passenger and freight trains to run reliably. At strategic locations, extra track and platform capacity has been provided to further improve flexibility and speed of operation, and upgrading of track in many locations has allowed Voyagers to take advantage of speed and tilt capabilities.

The heart of CrossCountry is Birmingham New Street through which four main arteries link Aberdeen, Glasgow and Edinburgh with Brighton, Bournemouth, Plymouth and Penzance.
When Virgin won the original franchises for West Coast and CrossCountry it was on the basis of a firm business plan which was to turn a 1997/8 subsidy of £80m into a premium of £240 million paid to Government in 2011/2 in the case of West Coast. CrossCountry’s subsidy of £115 million was to be turned into a premium payment of £10 million in the same time scale.

However, its business plan was blown off course by significant events within the industry such as the Hatfield accident and its speed restricted aftermath and the collapse of Railtrack into administration. Following this, the Rail Regulator decided to change the rules regarding funding systems, with consequent steep increases in track access charges.

Since Virgin’s original bid in 1996, Railtrack/Network Rail charges for West Coast have increased by around 250%. As a result, Network Rail is required to charge West Coast £1.5 billion more (in real terms) than was envisaged in the original bid.

The increased level of subsidy has been required to meet increases in Fixed Track Access and variable track access charges over the next four years announced by the Rail Regulator. During that time, West Coast track access charges are set to rise to £497 million a year, and those on CrossCountry to £229 million a year. Every penny of the Department for Transport’s additional grant to cover these increased track access charges is passed to Network Rail solely for that purpose. In the Office of Rail Regulation’s changed system of funding, Virgin Trains acts merely as a conduit for the passing on of this money and in no way profits from it.

In the light of these significant changes, Virgin entered into West Coast and CrossCountry franchise re-negotiation with the SRA and the former is continuing with the DfT. In the case of CrossCountry, agreement of new terms was not reached, so operation continued on an annual Management Contract basis.

As negotiations continued, Virgin Trains shrank journeys between London and the regions on the West Coast route with the UK’s first 125 mph tilting timetable introduced in 2004. Faster and more frequent services accelerated journeys by more than 20 percent.

Pendolino trains were able to exploit the 125 mph line speed between London and Crewe provided by completion of the first phase of the West Coast upgrade. Their tilting capability enabled them to take curves faster than conventional trains and brought dramatic journey time reductions. These are set to reduce further with imminent completion of the line’s upgrade to Glasgow.

Passengers have been given even more choice with an increase in daily numbers of services from 175 to 213, and a 22% reduction in journey time between London and Manchester, 19% between London and Liverpool and 18% between London and Birmingham.

Train frequencies have doubled between London and Manchester and a fastest 185 mile journey time of just two hours and six minutes at an average speed of 88mph is being achieved. During the morning peak, trains leave Manchester for London at 06:20, 06:35, 06:45, 07:05, 07:15 and 07:45, with two trains each hour throughout the day.

The Pendolino and Voyager trains are air-conditioned throughout with an onboard shop selling a wide range of goods and refreshments for journeys. They feature audio entertainment located at every seat from which customers can select live news updates or a range of pre-recorded music, and for those wishing to work, at-seat power points enable mobile phones and laptop computers to be recharged. A Quiet Coach on each train guarantees relaxation. Complimentary at-seat catering is provided to customers travelling First Class.

With a recently simplified system of selling the cheapest tickets up to 18:00 on the day before travel, the new services are proving increasingly popular with customers. Rail travel between Manchester and London has increased by 40% and the route has seen a 5% shift from air to rail since September 2004. For the first time in many months, numbers of rail journeys are exceeding those made by air, a trend expected to continue as Virgin outperforms airlines with punctuality fast approaching 90%.

Linking Britain’s thriving business communities, CrossCountry will soon carry more than 20 million passenger journeys a year, having almost doubled the number during the past decade. As well as improving services for commuters, CrossCountry enables easy business and leisure travel between major cities avoiding London. Now Britain’s second busiest long-distance train operator despite running many more trains, it is hitting the best annual punctuality figures in more than seven years.

Following the DfT’s re-mapping and expansion of Cross Country, the new franchise is to be let in Autumn 2007 and Virgin will seize the opportunity to propose further service improvement and investment plans in its strong bid.

In translating its rail vision into reality Virgin has risen to daunting challenges and overcome seemingly insoluble problems to create rapidly growing business on both its West Coast and CrossCountry franchises. The company has transformed rail travel in Britain and is determined to maintain and improve upon its world class status.