Concern over East Coast rail service as major losses loom

Question marks are once again hanging over the management of inter-city rail services from Aberdeen and Inverness to London after it emerged the current operator is involved in talks about its “contractual rights and obligations”.

Perth-based bus and train firm Stagecoach Group, which operates Virgin Trains East Coast jointly with Sir Richard Branson’s Virgin Group, said yesterday it made an £84.1million provision in its 2016-17 accounts for anticipated losses from the franchise over the next two years.

The company’s latest annual results were also hit by a £44.8million non-cash exceptional impairment for

“I am confident we can return the business to profitability”

the route, which has seen a string of operators struggling to make it profitable.

Stagecoach insisted it can make a return on the franchise by 2019 but called the current contract terms with the Department of Transport (DoT) “onerous”.

It said its talks with the DoT included the implications of Network Rail’s “reprioritised” infrastructure programme, which is aimed at meeting fastgrowing demand for rail services throughout the UK.

Pre-tax profits at Stagecoach plunged to £17.9million in the 12 months to Tesco is to axe 1,200 jobs at its head office as part of a major cost-cutting drive at the UK’s biggest retailer.

It informed affected staff yesterday about the cull, which amounts to a quarter of employees at offices in Welwyn Garden City and Hatfield. Jobs at a support centre in India will also be cut.