Virgin Trains Bid for West Coast Railway Return Hits Regulatory Buffer

The Office of Rail and Road has dealt a significant blow to Virgin Trains’ aspirations to re-enter the British railway market by rejecting its application to operate services on the west coast mainline from London Euston.

The regulatory body simultaneously declined proposals from FirstGroup and Alstom, citing insufficient line capacity and potential disruption to existing passenger and freight services. This decisive action follows mounting pressure from Transport Secretary Heidi Alexander to restrict ‘open access’ train services that might diminish revenue streams for the nationalised Great British Railway.

Virgin’s ambitious plans encompassed services to Glasgow, Manchester, and Liverpool. The company expressed strong disappointment, with a spokesperson highlighting the potential benefits of competition: “This decision undermines consumer choice. Virgin’s open access routes could have delivered the high-quality train services the British public deserve.”

FirstGroup, which currently operates profitable open access services including Lumo on the east coast route, sought to launch a budget-friendly Manchester service. The company has already secured licences for services between London Paddington and Carmarthen, and London Euston to Stirling.

The regulatory decision signals a potential shift in government railway policy, with implications for private sector participation in British rail transport. Industry analysts suggest this ruling might herald a broader clampdown on open access operations, despite their demonstrated success in driving innovation and competitive pricing on routes such as the London to Edinburgh corridor.

The financial context appears particularly relevant, with FirstGroup’s open access operations achieving remarkable profit margins of 32% on £106 million revenue, substantially outperforming their conventional franchised operations’ 3% margin on £3.5 billion revenue. These figures underscore the commercial viability of open access models, despite their limited network presence.