Virgin Trains East Coast

Virgin Trains East Coast (VTEC) (legal name East Coast Main Line Company Limited) was a train operating company in the United Kingdom that operated the InterCity East Coast franchise on the East Coast Main Line between London, Yorkshire, the North East and Scotland. It commenced operations on 1 March 2015, taking over from East Coast as a joint venture between Stagecoach (90%) and Virgin Group (10%).

It was originally intended to run until 2023 and return £3.3 billion to the government in the form of franchise premiums, but, due to the line performing below VTEC's expectations, it was announced in May 2018 that the contract would be terminated early by the government; VTEC ceased operating on 23 June 2018, when operations passed to the government-owned operator, London North Eastern Railway.

While the operation itself was profitable, VTEC placed part of the blame for the under-performance with respect to their franchise bid on their belief that the government had failed to deliver expected upgrades or new trains, while the government claimed VTEC had simply overbid. Given it was the third instance of the East Coast franchise needing to be terminated early for financial reasons, it was announced the next permanent arrangement, to begin in 2020, would feature closer co-operation between the private sector and Network Rail, the state-owned operator of the infrastructure.

History

Award

In January 2014, FirstGroup/Eurostar and Stagecoach/Virgin were announced by the Department for Transport (DfT) as the shortlisted bidders for the new InterCity East Coast franchise. In November 2014, the eight-year franchise was awarded to the Stagecoach/Virgin joint venture and commenced operating on 1 March 2015 trading as Virgin Trains East Coast.

Financial problems

On 28 June 2017, Stagecoach announced passenger revenues on the East Coast line were below expectations, meaning the company had registered a loss of around £200m to date, due to the profits that were being registered being lower than the payments due to the government for the right to operate the franchise. As a result, Stagecoach were attempting to renegotiate the terms, a process that was being delayed by the intervening general election. They made a loss when trades were down 11% due to loss on the East Coast service. The RMT called for renationalisation of the franchise, although Stagecoach was confident it could make a profit within two years.

In November 2017, the Transport Secretary Chris Grayling announced that the franchise would be terminated three years early in 2020, and in its place would be the East Coast Partnership (ECP), first of a new type of franchising arrangement, a long term regional public-private partnership where the private entity takes more control over the Network Rail infrastructure, under a unified brand. Stagecoach claimed that the failure of Network Rail to implement expected infrastructure improvements, and delays to the government-controlled purchase of the fleet of Azuma trains, were partly responsible for the expected growth in passenger revenue failing to materialise. Grayling however claimed that Stagecoach had simply made a mistake in their bid calculations, while admitting that the tender process encouraged over-bidding. Critics of the early termination described it as yet another government bailout of a private company in the failed privatised railway system, although this was only based on the fact the government would lose the more than £2 billion in future franchise payments due to the government over the last four years of its contract. Analysts claimed that since both parties shared blame for the losses, an early termination was mutually desirable. Both Stagecoach and the Secretary of State anticipated all contractual payments due would be fulfilled up to the termination date, and since the Secretary had been advised there had been no malpractice or malicious intent on their part, Stagecoach and Virgin would be free to bid for future franchises, including the ECP.

Demise

In February 2018, with the situation now seen as more urgent, the date for the end of VTEC's contract was brought forwards to "a small number of months", with the Secretary considering replacing it with either a short term not for profit arrangement with VTEC, or renationalisation under an operator of last resort, until the ECP could begin in 2020. On 16 May 2018 it was announced that the London North Eastern Railway, a temporary government controlled operator of last resort, would take over the operation of the line from 24 June 2018, thus ending VTEC's contract.

Services

Virgin Trains East Coast took over all of the services operated by East Coast. It categorised its weekday services from into four routes:Route Map
Virgin Trains East Coast

Named trains

Virgin Trains East Coast operated a number of named passenger trains, including:

Service changes

Virgin Trains East Coast introduced once per day services to Stirling and via on 14 December 2015, along with one extra service each weekday evening between Hull and Doncaster via Selby. In May 2016, a number of weekday services to Newcastle were extended to Edinburgh meaning there was almost a complete half hourly service between the two cities. From December 2016, benefited from additional stops provided by the operator to improve connections to Edinburgh and London.

Following the December 2017 timetable change, VTEC introduced 24 new Saturday services, increasing the number of Saturday services to 151, only six fewer than weekdays. A weekday service from York at 4:40am arriving in London for 7am was also introduced.

Rolling stock

Virgin Trains East Coast inherited the rolling stock operated by East Coast, comprising InterCity 125 High Speed Train sets made up of Class 43 power cars and Mark 3 carriages, and InterCity 225 sets made up of Class 91 electric locomotives and Mark 4 carriages and Driving Van Trailers. Most driving vehicles received a Virgin logo within the first three days of the franchise, and all train sets had received the full red and white VTEC livery by November 2015.

Attention then turned to the interiors, with toilets to be refreshed and seat covers and carpets replaced. The first refurbished set entered service on 31 December 2015. All of the HST sets were refurbished by August 2016, and all of the InterCity 225 sets by January 2017.

In July 2015, an additional HST set was transferred from East Midlands Trains.

In September 2016, VTEC hired three electric locomotives from DB Cargo for use on services to Newark, York and Leeds.

Fleet at end of franchise

Intercity Express Programme

Although Virgin Trains East Coast had no plans of its own to introduce new rolling stock, 10 five-car and 13 nine-car Class 800 bi-mode trains and 12 five-car and 30 nine-car Class 801 EMUs were due to be introduced during VTEC's franchise term as part of the DfT-led Intercity Express Programme. On 16 March 2016, VTEC officially unveiled the first of the new trains and branded them as ''Azuma'', after the native Japanese term for "east". In October 2017, it was revealed that the fleet would enter service from December 2018, but the early termination of the franchise in June 2018 meant that they were not used in service under VTEC. The trains were finally introduced in May 2019 under London North Eastern Railway, retaining the ''Azuma'' branding.

Depots

Virgin Trains East Coast had four main depots:
* Bounds Green TMD, London
*Neville Hill TMD, Leeds
* Heaton TMD, Newcastle – managed by Arriva Rail North
*Craigentinny TMD, Edinburgh – for repaints and heavy duty maintenance

Operation

Punctuality

The public performance measure (PPM) shows the percentage of trains which arrive at their terminating station on time. It combines figures for punctuality and reliability into a single performance measure. The most recent figure (in the four weeks from 13 December 2015 – 9 January 2016) for Virgin Trains East Coast's PPM was 82.0%. The moving annual average PPM was 86.9%.

Passenger numbers

Profitability

During the tender process, Virgin Trains East Coast promised to pay higher premiums to the government than its predecessor East Coast did, but failed comprehensively, immediately reducing premium payments and eventually giving up its £3.3 billion franchise.

In the first full year of operation, the company repaid only £204million of the premium, shortly before defaulting on the franchise. This compares unfavorably to the £235million paid over the previous year by the publicly operated East Coast franchise.

Incident with Jeremy Corbyn

In August 2016, a video was released of Labour Party leader Jeremy Corbyn in which he said he was forced to sit on the floor on a VTEC train to Newcastle because the train was "ram-packed". At the time, Corbyn said "Is it fair that I should upgrade my ticket whilst others who might not be able to afford such a luxury should have to sit on the floor? It's their money I would be spending after all.” However, Virgin Trains later released edited CCTV footage which they claimed showed Corbyn walking past empty seats in Coach H, filming the video and then walking back to Coach H to sit for the rest of the journey. Corbyn said about the incident "Yes, I did walk through the train. Yes, I did look for two empty seats together so I could sit down with my wife, to talk to her. That wasn't possible so I went to the end of the train." Analysis by a media outlet supporting the re-election bid of Jeremy Corbyn in the then-Labour leadership contest of the CCTV footage later claimed to show that the unreserved seats in some of the images were occupied and that other passengers also sat in the vestibules.

Industrial action

Due to concerns over the planned introduction of driver-only operation by VTEC, in addition to nearly 200 planned compulsory redundancies and staff pay concerns, the National Union of Rail, Maritime and Transport Workers (RMT) announced that three 24-hour strikes would be held by all workers (except depot maintenance workers) at VTEC in August 2016; however, following negotiations between VTEC and the RMT, these were all eventually cancelled.

A further breakdown in negotiations between the RMT and VTEC resulted in the union calling for further industrial action, which took place for 24 hours on 3 October 2016. Further strikes were subsequently called, for 48 hours on 28–29 April 2017; however, this was again cancelled before it could take place following "progress" in talks between the union and the operator.

References

External links

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{{Virgin Group

Defunct train operating companies
East Coast Main Line
Railway companies established in 2015
Railway companies disestablished in 2018
Rail transport in England
Rail transport in Scotland
Stagecoach Group rail services
Virgin Trains
2015 establishments in the United Kingdom
2018 disestablishments in the United Kingdom
British companies disestablished in 2018
British companies established in 2015