Jack
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Posts: 1,244
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Post by Jack on Mar 14, 2011 23:14:25 GMT 1
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Post by dwarfer1979 on Mar 15, 2011 8:59:09 GMT 1
Not a huge surprise as what the article doesn't mention is that First Great Western has been loss making even with the subsidy from the government (as has to a lesser extend First Capital Connect and to a greater extent Arriva Cross Country).
Why voluntarilly extend a loss making contract, they will not want to do a National Express and default early, the political fall-out would be huge for First, and the losses aren't so big as to be unmanageable but they are hardly going to want to keep making them for longer than they have to. Added to which the major problem on rail franchsing is that it is structured in such a way, with huge back loaded premiums etc, that once you fall behind the predictions on revenue it is very difficult to get back and the losses escalate, which is what happened to GNER & National Express East Coast.
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jc
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Posts: 431
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Post by jc on Mar 15, 2011 16:42:14 GMT 1
Why voluntarilly extend a loss making contract, they will not want to do a National Express and default early, the political fall-out would be huge for First, and the losses aren't so big as to be unmanageable but they are hardly going to want to keep making them for longer than they have to. I would define the political fallout as only really affecting the Whitehall bubble living on borrowed time. Out in the real world the contracts for rail services have changed hands so much that people don't really care what colour a train is the next day so long as it leaves at the same time and the fares haven't altered.
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Post by holland1987 on Mar 16, 2011 22:08:52 GMT 1
On the topic of First Trains how are Transpennine coping ?
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Post by mollman on Mar 17, 2011 17:43:11 GMT 1
TransPennine are coping quite well due to still having high demand between the Northern Cities. Back to FGW, wonder who is brave enough / willing to bid for Great Western considering they're going to have IEP dumped on them and the stupid situation with Swansea.
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