Small operators attack Virgin in rail price war

A PRICE war between Richard Branson's sprawling rail empire and a flock of smaller private train companies looks likely to erupt following the introduction of the new timetable later this month.

Virgin Trains' two huge lines - West Coast and Cross Country - dominate Britain's rail network. But rival operators aim to undercut Virgin fares to destinations in the North-west and Midlands. It will come as a shock to Branson's company, which has long prided itself on being the champion of consumer rights.

Birmingham, with its rail market worth pounds 50m, is likely to be a big battleground. Later this month Silverlink, which operates out of London Euston, plans to offer a pounds 14.90 cheap day return to Britain's second largest city. At present the cheapest walk-on fare is pounds 25.

North West Trains, which under British Rail was a sleepy commuter service centred around Manchester, has also won the right to run north to south services. It will offer a pounds 20 return ticket on its new service between London and Manchester, with no advance booking required.

Passengers travelling before 9am on Virgin from Manchester to London pay pounds 98 for a return ticket if they have not booked ahead. North West Trains - which is to be renamed Spirit of the North - admits its journeys take an hour longer but says by 2000 its new diesel trains will match Virgin's two-and-a-half-hour trip.

Both North West Trains and Silverlink have been able to act because Virgin's cheaper fares are only available to passengers who book in advance and specify the outbound and return legs.

"Our journey takes about 20 minutes longer but Virgin is restricted, not just by booking ahead. There are no seat quotas with us," says Mary Dixon, marketing director for Silverlink.

Silverlink, which runs from London to Birmingham via Milton Keynes, also hopes its punctual train service will win over prospective travellers. Virgin Trains have suffered from an unreliable service which has seen one in seven trains deemed "officially late". "We easily meet our punctuality requirements and we hope this will be an attraction," said Ms Dixon.

Virgin, however, is quietly confident that the newer, smaller companies will "only complement" its own services. "Book-ahead ticket sales have been a success," said Brian Barrett, chief executive of Virgin Trains. "It is what our customers want. When we took over they were only one per cent of our ticket sales - now they are nearly 20 per cent."

But more competition is looming. Another company, Chiltern, which runs services from London to Birmingham via Banbury, is also likely to steal traffic. It has recently re-opened 18 miles of railway line and is to introduce 20 new 100mph trains this summer. "We are looking to introduce a half-hourly service in the weekdays," said Adrian Shooter, managing director of Chiltern. "We have 20 per cent more passengers now and we aim to grow faster."

Not all experts welcomed the move. "Under BR these companies would have worked together to sort out who was best placed to carry leisure travellers and those who wanted to take peak traffic," said Barry Doe, a transport consultant. "Now they are all taking bites out of the same bit of cake."