Stagecoach on track for bigger profits

Should our tax money be spent on more railway track rather than a new airport runway?

Last Updated: 31 Aug 2010

On the day that BAA boss Colin Matthews reiterated his claim that Heathrow needs a third runway to stay competitive, the latest results from Stagecoach gave further encouragement to those who think our hard-earned taxes would be better spent on upgrading our creaking rail network. The rail and bus operator said today that there had been a ‘fundamental shift in attitudes’ towards rail travel, which is apparently enjoying a ‘renaissance’ in the UK.

Stagecoach, which runs the South Western and East Midlands Trains franchises and part-owns Virgin Rail, saw profits rise from £162m to £174m in the year to April, with sales up 16% to £1.76bn. And it’s apparently expecting more of the same in the coming months, despite consumers tightening their belts. Environmental concerns, more road congestion, and increasing air fares ‘will further boost demand for public transport,’ said chairman Robert Speirs, presumably looking rather pleased with himself.

Only yesterday, the Rail, Maritime and Transport trade union argued the case for investing in more high-speed rail links rather than paying for another Heathrow runway, on the grounds that it would be better for the environment and create more jobs. Admittedly their job is to look after railway-workers, so they would say that. But they did make a couple of interesting points, not least that our network is rubbish compared to the rest of Europe, where various governments (like Spain) are still pumping money into their railways.

But also, it argues that more than 20% of destinations served by flights from Heathrow are within easy reach of London by rail – assuming we had a service that didn’t fall over every 10 minutes. Apparently Paris is the most frequent destination from Heathrow, while as many flights go to Edinburgh as they do to New York. Then again, since these are two of the better train lines in the UK, it doesn’t exactly prove that we’re all itching to ditch our frequent flyer cards to take the train instead.

And looking at Stagecoach’s results statement today, it’s obvious why. It also warned that there’s a ‘significant risk’ that Network Rail, which is responsible for all the UK’s track, is not going to finish its line upgrades in time for the proposed timetable changes in December. No real surprise there, but it highlights the fundamental problem: even if we did pump more money into the rail network, upgrading the current infrastructure (while it's being used) is not an easy job. That's why Network Rail is currently looking into the idea of building brand new tracks alongside the existing ones instead.

But either way, on past form, it's a bit hard to imagine us ever having a world-class rail network...

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