Branson gets £24m for running late trains
Sunday Times: December 23, 2007
SIR RICHARD BRANSON has pocketed a £24m payout from Virgin Rail as his passengers face fare rises of up to 9% and some of the worst punctuality rates in the country.
Branson and Virgin Rail’s other main shareholder, Stagecoach, are sharing a dividend of nearly £48m, more than double the firm’s profits.
Virgin Rail says the payout reflects its success in attracting more passengers. However, Branson has been accused of exploiting government handouts for the railways. “He is stripping the company of cash while saying at the same time I need more public subsidy,” said Richard Murphy, director of Tax Research, an independent consultancy.
Virgin insists the dividend – disclosed in the 2006-07 accounts published this week – is on profits accumulated over years. But it will anger customers who face average ticket price increases of 4.8% on Virgin Rail from January 6 – with first-class season ticket holders being hit by rises of about 9%.
When Branson took over the West Coast and Cross Country lines in 1997, it was hoped he would transform services and generate revenue for the public purse.
However, his trains have been some of the least reliable while his group has been paid more than £1 billion in subsidies over the past decade.
According to the most recent figures available, the West Coast and Cross Country lines have had some of the worst punctuality rates. Branson lost the Cross Country franchise earlier this year.
Virgin Rail says most of the delays on its West Coast line have been caused by engineering works. It invested in new Pendolino rolling stock for the line.
“After 10 years, it’s time for a reward after all the risk that has been taken,” a Virgin Rail spokesman said.
See also comments:
Virgin didn't 'invest' in Pendolinos, they leased them. There was no risk.
The trains themselves, though new, are dreadful to travel in, certainly in standard class. Virgin fares are the highest in the world if you have to make an immediate journey. and they've taken £billions from the taxpayer.
Michael Gerald Weinberg, Milton Keynes, UK
Why not plan a week of travel on Sir Richard as an xmas present.
If everyone refuses to pay are they really going to travel with an empty train!
Give the guy a break, It does cost a lot to keep the Virgin/Branson PR machine working correctly, Also it can't be cheap running a tropical island.
And the board of Northern Rock want to hand over the Company to him? Do you wonder why small shareholders are so averse to his 'bid'?
S. Barraclough, Huddersfield, W. Yorkshire
It appears the taxpayer have to pay Branson for his showmanship and PR like magician David Copperfield.
£24 million is nothing compared to the billions the taxpayer will have to pay Branson when he successfully takes over Northern Rock.
george, london, uk