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Full steam ahead: the success of Virgin Trains

  • July 2014
  • -
  • MarketLine
  • -
  • 20 pages

Introduction

In June 2014, Virgin Rail Group was directly awarded a franchise agreement to operate passenger services on the UK's West Coast Main Line (WCML). The company has successfully retained the franchise from its creation in 1997 and has become a prominent passenger transport brand. This case study examines how the company has achieved this success and the future prospects of the business.

Features and benefits

* Analyzes the financial performance of the Virgin Rail Group
* Assesses the business strategy of Virgin Rail Group.
* Examines the future prospects of Virgin Rail Group.

Highlights

Virgin Rail Group has successfully changed consumer purchasing behaviour for rail tickets from 'turn up and go' to advanced booking by implementing a variable fare pricing strategy.
Faster, more frequent journeys together with improved on board service have transformed the competitive position of long distance Virgin Trains services compared to other transport modes, particularly air travel.

Your key questions answered

* How has Virgin Rail Group established itself as a successful rail franchise operator in the UK?
* How has Virgin Rail Group grown revenues and net income in the long distance passenger rail sector?
* What innovations have Virgin Rail Group introduced?

Table Of Contents

Full steam ahead: the success of Virgin Trains
OVERVIEW
Catalyst
Summary
AN INNOVATIVE COMMERCIAL PARTNERSHIP
Virgin Rail Group partners transport expertise with a consumer brand
Virgin Trains route network is a key artery for UK passenger transport
Passenger numbers have significantly increased
Financial performance has steadily improved
SUCCESSFULLY CHANGING THE PERCEPTION OF TRAIN TRAVEL
Virgin Trains has innovated to change the service proposition
Branding has been a key aspect of Virgin Trains' approach
Innovative pricing has transformed long distance rail travel
Variable rail fares facilitate capacity management
Price discrimination is a key advantage of variable rail fares
Low headline fares provide an excellent marketing opportunity
New rolling stock has transformed the product proposition
Improved on time performance has steadily improved
Virgin Trains has benefited from substantial state investment in track modernization
THE FUTURE OF THE VIRGIN RAIL GROUP
The business is poised for further growth
Rail franchising is almost certain to continue in the UK
Passenger volumes are set to continue to rise
Addition of the East Coast Main Line franchise could diversify the business
Passenger opinion can is a useful asset to the business
International expansion is a possibility
CONCLUSIONS
Virgin Rail Group is on track to grow further
APPENDIX
Definitions
Sources
Further Reading
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