Virgin tries new train of thought

Virgin must be counting the days until its rail subsidiary takes delivery of a new generation of high-speed trains. At least the novelty will deflect public attention from its appalling track record.

But it’s easy to criticise; too easy. After all, the punctuality problem which has brought Virgin’s reputation to its knees is not for the most part of its own making. The causes lie as much as anything in the flawed nature of rail privatisation: for example, the fact that Virgin trains must run on outdated and poorly maintained Railtrack infrastructure over which the train operator has no control.

This, of course, is scant comfort for Virgin. It is disproportionately vulnerable, like any brand-led company when, whatever the mitigating circumstances, it fails to deliver. The fear is that, if Virgin Rail proves incapable of remedying the situation, the contagion of public disillusion might spread to other Virgin-branded products. What if, for example, consumers began to regard Virgin pensions in the same light as its current rail service?

Clearly some swift and decisive action is necessary. But of what kind? Virgin Rail has made a good start by bringing in Mark Furlong as commercial director. Furlong, a Virgin veteran who won his laurels as the launch marketing director of Eurostar, has set himself six months to improve the service on the two rail franchises – West Coast and Cross Country.

Prime among Furlong’s aims will be the overhaul of staff recruitment and training. We can expect new uniforms and a generally improved interior environment within the carriages. But this is largely cosmetic – a holding operation to buy time and a few favourable headlines until the new generation of trains arrive.

And even these, speedier and more comfortable though they may be, cannot solve the fundamental structural problem. Only the politicians can do that.

So, the longer term issue for Virgin is: should it stay in the train game, or quit once it’s marginally ahead? As usual the answer will rely upon the personal qualities of a single individual. He will require supreme patience if he is to see the present crisis out: turning round Virgin Rail’s reputation will probably take years. And the longer the turnaround takes, the more punitive the government financial levy on Virgin Rail becomes; and the more exposed other Branson enterprises will be to further Virgin Rail fall-out.

On the other hand, turning Virgin into a fully fledged travel operation seems to be one of Richard Branson’s core aims. And where these are concerned he is not a quitter. Look no further than his ballooning escapades. All we can do, like the rail passengers, is wait and see.

Cover Story, page 26

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