Richard Branson’s hopes of returning Virgin trains to the west coast mainline have been dashed after the UK rail regulator rejected its application amid concerns over delays and cancelled journeys.
The Office of Rail and Road (ORR) has rebuffed three applications for new additional train services on Britain’s busiest line.
Virgin, along with First Group’s East Coast Trains, known as Lumo, and Wrexham, Shropshire & Midlands Railway (WSMR) all lost their bids.
The regulator said new services could not be introduced because of insufficient space on the west coast mainline (WCML), which would “likely detriment … train performance”.
Most intercity services on the line are operated by Avanti West Coast, which already shares some paths with West Midlands Trains and Transport for Wales, and freight. The government will renationalise passenger services on the route by October 2027.
The government has also said it will continue to allow private firms to run open access services, such as Lumo, Grand Central, and Hull Trains, despite the wider nationalisation of train operations. Officials and ministers have signalled increasing concern, however, that they will take revenue away from state-owned and subsidised services.
Stephanie Tobyn, the ORR’s director of strategy, policy and reform, said: “After thorough assessment of each application, it was clear that there was insufficient capacity to approve any of the services without a serious negative impact on the level of train performance that passengers experience on the west coast mainline.”
While the ORR recognised there was an advantage to adding competition on the route, Tobyn said the southern end of the route needed space in the timetable to ensure proper running of trains.
“Additional services within the current timetable structure and planned capacity use would further weaken punctuality and reliability, not just at the south end of the WCML but elsewhere as well,” he said.
Virgin has been vying for a return to Britain’s rails since being taken off the tracks by the Conservative government, which blocked the renewal of its west coast franchise in 2019. Virgin had previously operated services on the line since 1997.
The company had applied for three new services from London Euston, with contracts lasting 10 years until December 2035. They would include services to Rochdale and Bolton in Greater Manchester and the north-west, Liverpool Lime Street and Birmingham New Street.
In May, Network Rail refused to support the three companies’ applications to access the line, and Virgin appealed to the ORR. On Thursday, the regulator said it considered Virgin’s application in its own right but arrived at the same conclusion for each application.
Documents released alongside the notice showed the Department for Transport (DfT) said the line already operated at “close to capacity”, particularly in and out of London Euston and was concerned about conflicts with the HS2 and Avanti West Coast services.
The DfT said Virgin’s application would have an “unacceptable level of impact on taxpayers, given the greatly constrained overall position of rail finances”. It added that “the loss of revenue on such a significant scale would materially impact the funds available” to the government to invest in the railway.
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Virgin criticised ORR’s decision, saying it was a “blow for consumer choice and competition” and that the proposed service would have resulted in “5m additional seats every year from a trusted brand with a track record for delivering award-winning, reliable train services for its customers”.
It also criticised Labour’s nationalisation plans. “Anyone who remembers British Rail would rather forget it. Competition improves services, increases rail ridership, and drives better results for everyone, including the taxpayer,” Virgin said.
Virgin still has hopes of a return to the UK railway as a competitor to Eurostar, which also now rests on a regulatory decision. The ORR has said there is depot space for one more operator – or an expanded Eurostar – to run cross-Channel trains and is expected to rule on who can proceed in the autumn.
A spokesperson for WSMR said it was “extremely disappointed” with the ORR’s decision, noting it was the only application to receive support from the DfT.
“We have spent the past two years demonstrating that capacity and performance concerns can and would be negated by the industry working together to deliver a better railway for passengers … We will now urgently seek to reengage with the ORR and determine our next steps regarding the future of this vital passenger service,” the spokesperson added.
East Coast Trains was contacted for comment. Its bid for a new Glasgow service has been rejected, but the ORR approved plans last year for Lumo trains between London and Stirling service, adding to its current operation between London and Edinburgh.