Virgin takings down after rail crash

Virgin Trains: passenger numbers slumped after the Hatfield rail crash

Takings by Virgin Trains slumped by almost one-third after October's Hatfield rail crash, a statement has revealed.

But the operator, controlled by Richard Branson's Virgin group, expects Wednesday's accident in Yorkshire to have little impact on profits.

While the Hatfield disaster, caused by faulty track, prompted declines of up to 50% in the number of passengers on UK trains, Virgin has noticed little change in business following the Yorkshire disaster.

Wednesday's crash, which is being widely reported as a 'freak accident', followed the plunging of a Land Rover onto the East Coast mainline.

"The accident does not seem to have had any effect on our business so far," said Virgin spokesman Will Whitehorn.

Virgin Trains services were not involved in either incident.

Compensation claim

Virgin Rail Group (VRG) has opened a second round of talks with track and signal operator Railtrack over compensation for loss of earnings following the Hatfield accident, in which four people were killed.

Virgin's half price offer: part of a £10m campaign

VRG has blamed speed restrictions and engineering works initiated by Railtrack after the crash for causing a 32% slump in revenue between 15 October and the beginning of last month.

The operator also expects to spend £10m this year in a campaign, including the ongoing half-price ticket offer, to revive passenger numbers.

But while Mr Whitehorn said passenger numbers had now recovered to levels seen a year ago, transport firm Stagecoach, which owns 49% of VRG, expressed caution about prospects.

"It still remains too early to predict the longer term impact of the prolonged disruption on future passenger numbers and related revenues," Stagecoach said in a statement on Friday.

The firm, warning that profits would come in below forecasts, expects to take a £20-25m hit on its VRG stake, the briefing said.

Shares slide

The warning sent Stagecoach shares down by more than a quarter on Friday morning, wiping £200m off the firm's stock market value.

The shares recovered slightly in lunchtime trade to stand at 58p, 20% down on the day.

Friday's statement also revealed that, on Stagecoach's South West Trains operator, passenger numbers on off-peak services had yet to return to levels seen before the Hatfield crash.

Stagecoach also said that profits in its US bus division would be £5-10m below earlier forecasts.