The key issue is that on board catering doesnt cover its costs.  In particular the cost of buying and maintaining the space provided has not been matched by the revenue.  I speak with the benefit of having managed onboard catering and been responsible for the income on my trains.  The revenue covered the cost of goods sold and the staff but never the daily maintenance of ovens and other equipment and the substantial lease costs of the vehicles.

I love travelling in a train with white table cloths and silver service but I have come to realise that I cannot expect other passengers (or the taxpayer) to subsidise this activity.

He meant he will still make money from the branding fee!  (this is paid to a Virgin company with limited number of shareholders and a based offshore)

Please give your source for this "fact".  EC have claimed increased passenger numbers but I have not seen any evidence that they have increased revenue.  Remember they spent millions setting up the new system and now dont get any income from sales in First Class.


Edited to fix quote. bignosemac

This is one of the more interesting threads on the blog.

Many of those who speak of nationalisation seem to forget the many many failings of BR^▸ (British Rail(ways)).  I was a commuter in 1991 and recall the poor service, dirty trains and lack of attention to detail.  There was no incentive to get better apart from professional pride and no capital for modern trains or other improvements.

Although NSE^▸ (Network South East) had inspirational leadership by C Green Esq even he could not deliver the investment needed.  Although the trains are expensive we have probably the lowest average age train fleet in europe provided by private capital.  The infrastructure has been a mess but that goes back to Railtrack and PUG2 and instead of leaving the company to sort itself out HMG decided to step in when then sensed a political opportunity.  This caused years of chaos - if Railtrack had been left alone the system would have been sorted much more quickly.

Finally - I have just travelled to N America via Gatwick - Both outward and return journeys were fantastic.  Despite a wait to get on the stand our bags (including non standard items) were in the hall in a few mins and we were on the platform waiting for a train within 40 mins of leaving the plane.  The new managment at Gatwick has got a grip of what was a shoddy operation and the result is impressive.  This is very different from Heathrow where the new managment has failed to clear out the old BAA culture and we see the consequence.  This failure at LHR is one of the private sector but it is rooted in the former culture.  Now Gatwick is offering stiff competition and Stanstead is to be sold the Heathrow managment will have to shape up or be shipped out. 

I know there are many public servants and organisations which do a good job but in the end organisations tend to look after themselves unless they are shaken out of complacency.  I have worked in public and private organisations over 40 years and I know what works.

Works at Gatwick

If Virgin win then how can HMG conduct any procurement in future without someone going for judicial review?  MoD equipment springs to mind.

Interesting letter in the DTel yesterday - suggested existing site could be progressivly redeveloped to create three full size runways - it would cost a fortunue but could solve the problem without expanding the site.  I am sure those affected by noise would still object.

Indeed - I have to repeat - this proves you can fool some of the people all of the time!

What I would really like to know is how much Virgin has been paid over 15 years for the priviledge of using the brand - I suspect it is a number so big that even Labour MPs^▸ (Member of Parliament, or Mile Post - a method of measuring the railway in miles and chains from a starting point - usually London, depending on context) would complain!!

I agree - Support for Virgin shows you really can fool some of the people all of the time

However consider the annual cost of the rolling stock lease, maintenance, track access and then add the staff and other costs and the numbers dont stack up.  I have never seen evidence that the service adds enough additional passengers (who would travel by another mode) to make money.  With modern yeild managment the majority of fares are discounted and although this increases the total revenue it means that provision of other on-board services will not make money.  Four meals (avg of ^20?) - additional income ^80?  IF FGW are achieving 50% gross margin after cost of goods sold then they are taking ^40 to pay for the staff , the seat (if dining is provided in a dedicated separate area), the rolling stock etc etc.

The statement by East Coast is very disingenuous - They havnt said how much additional revneue they have gained from the offer.  I suspect that they are selling lots of cheap FCOP (First Class Off Peak) to fill the space but the total revenue is not covering the additional cost or paying for the massive investment (I hear they spent millions on catering depots). 

I have spent a lot of time over the last ten years dealing with the economics of on-board catering and I am not aware of any catering offer which makes money.  I love the idea of great train catering and have spent happy hours dining whist watching the view but members of this forum must recognise that this takes revenue away from the rest of the railway.

Remember the Virgin offer was introduced because the First Class customers were in uproar due to the abysmal service they were recieving pre Pendolino and PUG2.  Customers were driving to stations on the ECML^▸ (East Coast Main Line) and paying for their catering.

The history of the VT^▸ (Virgin Trains - former franchise (or, possibly, in a France context, Versement Transport - a payroll tax on employers to fund local transport) ) free offer is often forgotton.

Pre Pendelino and during WCRM the service had almost collapsed and First Class customers were in open revolt and many were driving to the ECML^▸ (East Coast Main Line) to use GNER^▸ (Great North Eastern Railways).  The staff were also not properly managed and there was no Electronic Point of Sale (EPOS^▸ (Electronic Point of Sale)) to reduce fraud.  As a way of compensating First Class customers and reducing the complexity of the offer (and removing the need to collect cash) VT introduced the "free offer" to justify the high fares.  It will be illuminating to see if any of those competing for the InterCity West Coast (ICWC^▸ (InterCity West Coast)) franchise have proposed to continue with the free offer.

Edit: VickiS - Clarifying Acronym

Sorry Btline - East Coast have said that passenger volumes in First are up but they have been careful not to discuss revenue.  I suspect that their yeild is down and they are not covering thier increased costs with the inclusive offer in First.  A colleague has bought a First Class ticket from Newcastle to Kings Cross for ^41 - amazing value but with the free food included not so good for the taxpayer (who own East Coast).

How can anyone prefer the bendy bus vs the 'new routemaster'?  The former caught fire and many didnt pay - the latter will be better value (as long as TfL^» (Transport for London - about) buy plenty)

East Coast used to have several (six from memory) 'Pullman' sets of Mk IV coaches which had 3 1/2 First Coaches - these were meant to run on the key bussiness trains from Leeds and Newcastle but set swaps meant they were often on the wrong diagram and this led to overcrowding in standard (which had one less coach).

When GNER^▸ (Great North Eastern Railways) did the 'Mallard' upgrade they took the chance to move to a standard formation with 3 First in every rake and turning the buffet gave a better area to serve passengers. 

Filling first class seats should not be a problem with proper yeild management -the FCOP ticket (booked in advance)